Ticketmaster and Live Nation

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This is Celia Hirschman with On the Beat on KCRW.

The music industry has been buzzing. Ticketmaster and Live Nation have just announced their plans to merge. The two live-show giants are each others’ main competition, so the merger needs to be approved by anti-trust regulators. It will be a tough fight.

Both companies have diversified in the last couple of years, which could make a merger more plausible. In addition to promoting concerts, Live Nation has begun signing artists to million-dollar recording contracts, competing with major labels for talent and profits. Meanwhile, though it may be hard to believe, Ticketmaster has diversified its business strategy by creating an up-sell ticket company. Ticketmaster recently opened their own second-tier service called TicketsNow, which sells tickets in the open market. (Think StubHub or CraigsList by Ticketmaster).

Just last week Bruce Springsteen witnessed first hand how unfair a secondary market can be. When the Springsteen tickets went on sale, Ticketmaster decided to move some of those sales over to TicketsNow, for a greater percentage of revenue. Springsteen retaliated by sending word to his fans about Ticketmasters’ conflict of interest, and Ticketmaster issued a public apology letter to The Boss.

Springsteen fans weren’t the only ones who felt cheated by Ticketmaster’s latest move. Henry Krajewski, a resident of Ontario, Canada attempted to buy Smashing Pumpkins concert tickets from the Ticketmaster site. When he couldn’t complete his purchase for a pair of tickets, face value $106, he was redirected to the TicketsNow site where he purchased the pair for $428.

The only problem is, Ontario, Canada has a law forbidding reselling tickets on the secondary market at more than their face value. Mr. Krajewski responded by filed a class action lawsuit suit against Ticketmaster for $410 million.

The idea that Ticketmaster can be the ticket manufacturer, the retailer and the scalper on the corner is scary. TicketsNow is a thinly veiled transgression so egregious, it’s mystifying how Ticketmaster could get away with it.

Add to that fact a merger between the two biggest concert promoters in America, and I can see the writing on the wall. This can only mean higher prices and less access to good seats. Because these companies have a lock on the venue market, artists will be forced to play in their venues, consumers will be forced to buy their tickets, and the unlucky will have to pay their ransom. The Justice Department is already receiving complaints about allowing the merger.

This is Celia Hirschman with On the Beat with KCRW.