On Tuesday, executives from Ticketmaster
Along with vulnerability to bot attacks, the Senators also discussed Ticketmaster's high fees, scalpers, and the company's 2010 merger with concert promotion company Live Nation. Senators on both sides of the aisle discussed potential actions to take to combat the problems, including requiring more transparency on fees, making tickets non-transferable, and breaking up Live Nation and Ticketmaster.
"The fact of the matter is, Live Nation/Ticketmaster is the 800-pound gorilla here," said Connecticut Democrat Richard Blumenthal. "This whole concert ticket system is a mess, a monopolistic mess."
Ticketmaster is the largest ticket seller in the world, operating in more than 30 countries and selling 500 million tickets every year.
During the presale for the Taylor Swift concert, Ticketmaster's site was overwhelmed by a combination of fans and bots acting on behalf of scalpers, resulting in thousands of fans losing their tickets after queueing online for hours.
Live Nation's President and CFO, Joe Berchtold apologized for the incident and pledged that the company would do better, noting that Ticketmaster has spent $1 billion on improved security and stopping bots over the past ten years. Still, the committee members pressed Ticketmaster on how such a large company is vulnerable to bots when other companies regularly deal with them.
"They have figured it out but you guys haven't? This is unbelievable," Republican Senator for Tennessee, Marsha Blackburn, said. "We've got a lot of people who are very unhappy with the way this has been approached."
Meanwhile, fans who do manage to get tickets are facing increasingly high fees. According to Democratic Senator Amy Klobuchar from Minnesota, fees on tickets can now reach as high as 75% of the cost of the ticket with the average fee coming in at 27%. Ticketmaster executives argued that ticket sellers don't set fees or ticket rates, venues do, but industry insiders say it's not so simple.
Part of the reason behind those high fees is reportedly Ticketmaster's partnership with Live Nation: Live Nation only owns 5% of all U.S. concert venues, but it signs multi-year contracts with other venues to provide ticketing services and set up musical acts. Jack Groetzinger, CEO at Ticketmaster's competitor SeatGeek, says that Live Nation can prevent venues from using ticketing services other than Ticketmaster by withholding acts.
"The only way to restore competition is to break up Ticketmaster and Live Nation," said Groetzinger.
Berchtold agreed with lawmakers that the company needs to be more transparent about its fees, but he said the industry would prefer action to combat scalping and fraud, including resellers offering tickets that aren't yet for sale from official sources. Ticketmaster does practice reselling, but Berchtold said it would support making tickets non-transferable.
As a part of the companies' 2010 merger, Live Nation had to agree to wait ten years before it could retaliate against concert venues for using Ticketmaster competitors. During the hearing, Utah Republican Mike Lee questioned whether the deal should have been allowed in the first place.
"It's very important that we maintain fair, free, open and even fierce competition," said Lee. "It increases quality and it reduces price. We want those things to happen."