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Who Is Making Money on Your Concert Ticket?

EconEye Admin

The Justice Department alleges that Live Nation suffocates competition in ticket promotion and venues, which drives up Ticketmaster prices.—ft.com, May 23, 2024

A $100 ticket is split between the artist $90 and the promotor $10.
The $25 ticket is split between Ticketmaster $5 and the Venue $20

Answer the following questions to check your understanding of the story.

In 2023, 88,405 Concert & Event Promotion businesses operated in the United States. In what type of market are concert tickets sold?

The market in which concert tickets are sold looks like it is __________.

Wrong! - The market is competitive, but each seller has a different range of tickets. The market has too many firms competing to be oligopoly or monopoly.

Correct! - With 88,405 Concert & Event Promotion businesses in the United States, each sells a range of concert tickets, so this market looks like monopolist competition.

In 2023, Ticketmaster sold close to 70 percent of U.S concert tickets while 8 or 9 other firms shared 30 percent. Why does the Justice Department allege that Live Nation suffocates competition?

Wrong! - Live Nation sells more tickets, fans want to buy more tickets than Ticketmaster makes available, and Ticketmaster is willing to resell fans’ tickets but what else does the Justice Department think Live Nation dominates?

Correct! - Live Nation dominates ticket sales, concert promotion, and venues.

Concert prices have increased approximately 34% since 2018, so why does Live Nation claim it is not suffocating competition?

Wrong! - The demand for live concerts has increased and Live Nation has responded with more concerts, more tickets but ticket prices and tickets sold have both increased.

Well Done! - Since covid, the demand for concert tickets has increased, and both ticket prices and the quantity sold have increased.

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