Nikolas Sargeant
The concert industry is in crisis, and for certain parties, one of their own making. The biggest victims are the fans, who just want to see their favorite artists. While concert tickets are rarely “cheap”, the situation has reached a boiling point. A recent WSJ showed that “average resale price for a Taylor Swift concert ticket on SeatGeek in 2023 is $1,311.” The average price, not the top price.
Is this because artists have become incredibly greedy? Actually, not really. They don’t see the vast majority of these exorbitant prices. If you’ve followed this growing controversy for the past, say, 30 years, then you know that artists are stuck between a rock and a hard place as well. Famously, Pearl Jam, who in the early 1990’s was one of the biggest names in music, fought and lost against Ticketmaster.
So are there any solutions? Actually, there might be. With the advancements of blockchain-based KYC (know your customer) policies, and other security-based processes such as 2FA (two-factor authentication), the solution may be incredibly straightforward. However, the road to transforming the industry will take longer; but there is headway being made in this area as well. Let’s hone in on the core of this issue, identify the driving factors, and see how industry disruptors such as UTIX are working to champion the cause for live event fans across the globe.
The Core of The Issue
If you just scratch the surface of the issue, relying on what you see in the news, you might be led to believe that the cause of the issue is Ticketmaster. And in this case, you’d be right. But the reasons behind this are more sinister and unsatisfying in terms of systematic abuse, a record of mistreating fans, and putting in predatory practices that have violated antitrust agreements for 13 years. This isn’t an opinion; it’s a matter of public record.
When Ticketmaster merged with Live Nation in 2010, becoming Live Nation Entertainment (LNE), it did so with many different conditions to avoid antitrust violations. As it has now taken over 70% of the online ticketing market, and the average ticket price has risen over 400% in the last 20 years (outpacing inflation by 334%), these measures may not have been completely effective.
There are two core issues that have prevented artists and fans from being able to fight back, and have created the unnatural rise in pricing. First, LNE’s business model cleverly makes exclusive contracts not just with artists, but with countless major venues. Those artists who want to avoid LNE find themselves without a normal concert/event venue, and end up with smaller venues, fairgrounds (if they don’t have an agreement with LNE), or perhaps a large circus tent.
The second issue, and the key to the rising costs, is that of secondary markets. One report showed that over 90% of tickets are not released to the public. This is a staggering amount picked up by brokers, often using bots, then creating artificial scarcity in order to drive up costs. To make matters worse, LNE owns some of these secondary markets, meaning that they can deny access to competing brokers, and are highly incentivized to allow these bot-driven, predatory actions to take place. It’s hard to convince someone with exclusive rights to all tickets NOT to allow most of the tickets to incur double fees, especially when the secondary fees are a percentage of much higher prices.
Given this, it is no wonder that this situation has developed. LNE has created a monopoly with zero incentive to protect the concert goers, and all the incentive to let profits roll in. While the term “monopoly” has a specific definition and is illegal in the US, this behavior has been allowed to continue, even if some lawmakers are furious.
The New York Times, reporting on a January 2023 Senate hearing that stemmed from LNE’s disastrous handling of a 2022 Taylor Swift concert, captured several very telling quotes from lawmakers who identified the problem very succinctly.
“This is unbelievable,” stated Senator Marsha Blackburn, Republican of Tennessee. “Why is it that you have not developed an algorithm to sort out what is a bot and what is a consumer?”
Senator Amy Klobuchar, Democrat of Minnesota, identified a likely root cause for the behavior. “This is all the definition of monopoly. Live Nation is so powerful that it doesn’t even need to exert pressure. It doesn’t need to threaten. Because people just fall in line.”
A Simple Solution
Source: Depositphotos
The fact is, while those involved have said that preventing bots is very difficult, there are a few basic technologies that would effectively eliminate their ability to purchase vast amounts of tickets and resell them with high markups.
The first is a method that the banking industry uses, called Know Your Customer (KYC). While this can be a somewhat tedious process with banking, the blockchain industry has made the practice much simpler. Many different platforms make use of this either for regulatory reasons, or because they want to ensure their customers are real people who can be a valuable part of the community and not a bot with ill intent. Combined with this, many platforms now use two factor authentication (2FA) as a way to ensure a validated account holder is who they say they are. By combining KYC and 2FA, bots have no place in the process, and individuals can’t even manually create fake accounts. The scalability of the bots and brokers is disabled, effectively solving the problem.
However, to ensure that the problem stays solved, the platforms can also employ timed entry. This can be done in a number of ways, but the easiest is to wait until just before the event for those who have purchased tickets to be able to print or download them. This minimizes the time any scalpers can take advantage of secondary sales, limiting the ability for jacked up prices and creating more risk for scalpers to be able to sell their tickets.
New Blood In The Industry
While the solutions are incredibly effective and simple, the motivation for LNE to continue its monopolistic practices still remains. Further, the regulators whose sole mission is to protect citizens from this type of abuse, for whatever mysterious reasons, continue a firm policy of inaction.
It’s left to new players in the market to implement these solutions. Platforms like UTIX have made it their mission to bring fair ticket sales to events worldwide. Instead of focusing on how to use bots for more profit, UTIX is incorporating 2FA and timed entry, giving the fairest chance possible to event goers while still giving the artist and venue choices on how wide the secondary market should be. Because the bigger venues are locked in with LNE, UTIX’s strategy is to begin working with smaller, independent venues in order to prove out that ticket sales can indeed be fair for fans, artists, and venues. By securing a beachhead in this market, the clearly better model will begin growing as artists and fans see that after 30 years, there is finally a way to save the event industry. Time will tell if the newer players who are fiercely anti-bot, anti-monopoly, and pro-event can make a difference. Here’s hoping they succeed.
