Tuesday’s Senate hearing on the ticketing industry was memorable for any number of reasons, and not least because the witnesses and many (not all) of the senators were well-briefed on the issue, and made their cases powerfully.
A major reason for that is Senator Amy Klobuchar (D-Mn.), who not only led the hearing with fellow Senator Mike Lee (R-Ut.) but is chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights. The hearing, titled “That’s The Ticket: Promoting Competition and Protecting Consumers in Live Entertainment,” was at least partially inspired by the debacle around Taylor Swift’s tour on-sale in October — which left many fans waiting in virtual lines for hours — but focused on longstanding anti-trust claims against Ticketmaster, which is owned by Live Nation and controls an estimated 70% of the ticketing market.
However, it must be emphasized that it is not Congress that can break up alleged monopolies — that is the Department of Justice, which is currently looking into this matter.
Senator Klobuchar caught up with Variety on the hearing late Wednesday afternoon; our detailed recap of Tuesday’s hearing can be found here.
How do you think the hearing went?
I thought it went very well — nearly everyone was prepared, which helps, and I think that the witnesses made their cases strongly but not really rudely. They were aggressive a few times, but they weren’t trying to do a “gotcha” with the witnesses. I thought they were just really good and had thought through it and were they were really effective.
In your opinion, what is the main issue that makes Ticketmaster a monopoly? Is it the fact that it is owned by Live Nation? And if the two entities were split, would that solve the problem?
Well, it depends on how its structured, but they are a monopoly. First of all, in ticketing alone, they are a monopoly — it’s 70% [of the market]. But one of the reasons that status can’t change is because of the clout that they wield. Because Live Nation is also very much in the [event]-promotion business, and either partial venue ownership or a sort of metaphorical ownership when they get into 3, 5, 7-year contracts with venues, where virtually no other ticketing entity can compete during that time. So the fact that they can do both sides of the business enables them to get more of that ticketing and makes for less competition. So if you broke them up, it would most likely then be easier for people to get into either side.
Do you feel it would solve the problem if the two entities were separated? If Live Nation had to offload Ticketmaster?
I think it would be very helpful. But it would depend on how the whole thing is structured.
When a monopoly is broken up, does that necessarily make things better?
Yes, it would, because [competitors] would actually have a chance of surviving and expanding. A great example, although a long time ago, was the AT&T breakup. At first, it was, “It’s the only phone service, it’ll be a disaster if you break them up, it’s bad for national security,” those kinds of things. And they had a monopoly horizontally over different types of phone companies geographically in the country, and vertically over the hardware and things like that. But after they were broken up, even one of AT&T’s former chairman actually said it made them a stronger company — it forced them to compete. And what it did for consumers was vastly bring down the prices of long distance [phone service], and at the same time, it greatly built the cellphone industry, because then there was competition, other people were getting into it, and [the result was] what it is today, versus the cellphone the size of a brick in the movie “Wall Street.” So that’s the idea here — there are actually historical examples of how breaking up a company can actually lead to more competition. And if we believe in capitalism, you want to have competition otherwise, you don’t really have capitalism, you have a monopoly situation. So that’s where I think a lot of the senators are united, and they had clearly heard stories in their areas, either about concerts gone bad or ticketing gone bad, or arenas that were trying to compete against Ticketmaster owned arenas.
To be fair to Ticketmaster, a lot of the problems they have faced, from bots and on-sales that were coordinated with the artist, would be faced by anyone in that position, no?
I think we don’t know that because there’s no competitor. I have no doubt that a cyber attack [would come after] any company, but how would they deal with it? That’s why we want competition: We don’t know. But whether it’s a Bad Bunny concert or a Springsteen concert or you name it, when you have no real competition, prices or fees tend to go up.
How do you stop this issue from fading away? Because this has been going on for nearly 30 years.
First of all, that strong bipartisan support means something. There will be follow-up and further questions and evidence that will now go to the Justice Department. It has been reported many, many times here that there’s a Justice Department investigation going on [regarding Ticketmaster], and it’s up to them. I can’t intervene or know about it, but I believe that what we did will further that, because they’re going to have some incredible testimony and information to use in their investigation. And the Google case was announced right after our hearing yesterday.
One more crucially important question, especially after all the Taylor Swift lyric quotes in yesterday’s hearing: What is your favorite Taylor Swift song?
“I Knew You Were Trouble,” because that’s how I feel like when several of our committee members walk in the door. (Laughter)
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