Why is there no compeition to Ticketmaster? They don't seem to have a natural monopoly, do they?
Everyone complains about Ticketmaster, so it seems that competitors should arise to compete with them.
Answer:
There are a couple of competitors, such as Stub Hub, but for the most part, there isn't much need for it. The vast majority of the ticket price goes to the artist and venue where they perform, Ticketmaster only gets it's "service charge".
There is some implicit competition between Ticketmaster and the venues themselves. All Ticketmaster offers is an alternate way of getting your tickets. If the service charges went too high, the consumers would go directly to the venues themselves and buy their tickets there.
One way in which Ticketmaster has sought to reduce competition from other services is by locking the venues up in exclusive deals where only Ticketmaster sells their tickets outside of the venues themselves.
People complain about Ticketmaster, but with the exclusive deals they have with popular venues (where they make the real money) the attraction for other potential competitors to enter the industry is limited.
I think what people complain about are the ticket prices themselves, and services such as Ticketmaster are just one facet of this. Even without service charges, many of the tickets are double or triple what they were a few years ago.
Eventually some competitors will arise and start bringing the service charges down, but Ticketmaster has "first mover advantage", and it will be difficult for other services to catch up. And don't expect to see a dramatic drop in the cost for a event, because artists and venues have figured out how much the public is willing to pay, and if Ticketmaster drops their prices, I expect the artists and venues will increase theirs to take more of the pie.
I'm guessing, but my guess is that they've contracted with artists and/or venues to be the only ticketing agency, like Coke or Pepsi contracts with restaurants--you sell our product, you can't sell our competitor's. If you sell our competitor's, our contract is voided and we will not sell tickets for you.
So far as I know, no company exists that can step into the void that would be left if Ticketmaster dropped out of a major band's or venue's business.
They managed to amass a lot of power--and make bundles of money from every transaction. When I can, I'd rather drive to the box office and buy tickets, but often, that's not possible. You can *only* buy through Ticketmaster.
I would agree with you, but in order to start that type of business requires capital and the knowledge of where to acquire all those tickets. Ticketmaster doesn't have a total monopoly because every individual location that holds an event also sells the tickets to those events. The advantage to Ticketmaster is the fact that one can buy tickets for any event anywhere at anytime.
While Ticketmaster may be the main provider and venue through which people buy tickets, the tickets are still competively priced because people don't have to go to concerts, etc. They are selling a form of entertainment and if the price is higher than people are willing to pay, the consumer will engage in some other form of entertainment. So, Ticketmaster does has some incentive to keep prices relatively affordable. This is why you will pay a different price to sit in the exact same seat in the same stadium to see a superstar than you would to see a rising star.
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Answer:
There are a couple of competitors, such as Stub Hub, but for the most part, there isn't much need for it. The vast majority of the ticket price goes to the artist and venue where they perform, Ticketmaster only gets it's "service charge".
There is some implicit competition between Ticketmaster and the venues themselves. All Ticketmaster offers is an alternate way of getting your tickets. If the service charges went too high, the consumers would go directly to the venues themselves and buy their tickets there.
One way in which Ticketmaster has sought to reduce competition from other services is by locking the venues up in exclusive deals where only Ticketmaster sells their tickets outside of the venues themselves.
People complain about Ticketmaster, but with the exclusive deals they have with popular venues (where they make the real money) the attraction for other potential competitors to enter the industry is limited.
I think what people complain about are the ticket prices themselves, and services such as Ticketmaster are just one facet of this. Even without service charges, many of the tickets are double or triple what they were a few years ago.
Eventually some competitors will arise and start bringing the service charges down, but Ticketmaster has "first mover advantage", and it will be difficult for other services to catch up. And don't expect to see a dramatic drop in the cost for a event, because artists and venues have figured out how much the public is willing to pay, and if Ticketmaster drops their prices, I expect the artists and venues will increase theirs to take more of the pie.
I'm guessing, but my guess is that they've contracted with artists and/or venues to be the only ticketing agency, like Coke or Pepsi contracts with restaurants--you sell our product, you can't sell our competitor's. If you sell our competitor's, our contract is voided and we will not sell tickets for you.
So far as I know, no company exists that can step into the void that would be left if Ticketmaster dropped out of a major band's or venue's business.
They managed to amass a lot of power--and make bundles of money from every transaction. When I can, I'd rather drive to the box office and buy tickets, but often, that's not possible. You can *only* buy through Ticketmaster.
I would agree with you, but in order to start that type of business requires capital and the knowledge of where to acquire all those tickets. Ticketmaster doesn't have a total monopoly because every individual location that holds an event also sells the tickets to those events. The advantage to Ticketmaster is the fact that one can buy tickets for any event anywhere at anytime.
While Ticketmaster may be the main provider and venue through which people buy tickets, the tickets are still competively priced because people don't have to go to concerts, etc. They are selling a form of entertainment and if the price is higher than people are willing to pay, the consumer will engage in some other form of entertainment. So, Ticketmaster does has some incentive to keep prices relatively affordable. This is why you will pay a different price to sit in the exact same seat in the same stadium to see a superstar than you would to see a rising star.
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