The CEO of Ticketmaster’s parent company, Live Nation, testified Tuesday before the US Senate Judiciary Committee, saying that a deluge of scalping bots was responsible for the mis-selling of tickets for Taylor Swift’s recent tour.
Live Nation merged with Ticketmaster in 2010, becoming the primary channel connecting artists and venues across the US. While the company has been criticized over the past decade for dominating the live events industry, it has come under new and intensified scrutiny after fans trying to get Swift tickets in November experienced outages and glitches in its ticketing service.
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In his opening address to the committee, Live Nation President and CFO Joe Berchtold said that the flood of scalping bots was causing the company to suffer from technical glitches, making it difficult for the company to get tickets for real fans.
Berchtold said there was “unprecedented demand for Swift tickets” when tickets for her Eras tour – her first headlining tour in five years – went on sale in November.
“We knew that bots would attack sales and we planned accordingly. We were then hit with three times more bot traffic than ever before, and for the first time ever, 400 Verified Fans came for our servers with the Verified Fans Access Code,” said Berchtold. “Although the bots failed to penetrate our system or get any tickets, the attack required us to slow down or even stop sales.”
“This is what led to a terrible consumer experience that we deeply regret,” he said.
Berchtold said “we could have done a few things better, including staggering sales over the longer term and doing a better job of setting fan expectations for getting tickets,” but urged senators to take seriously “industrial scalpers breaking the law, using bots and cyberattacks to dishonestly getting tickets.”
While Berchtold highlighted Ticketmaster’s problems with bots, senators in the committee highlighted Live Nation’s dominant behavior in the marketplace, questioning the power it has over competitors.
Amy Klobuchar, chair of the U.S. Senate antitrust subcommittee, said in Tuesday’s opening speech that Live Nation not only dominates ticket sales, but also owns seats and “lockouts”[s]other places in the exclusivity agreement.
Restaurants are “afraid to go to someone else because they’re afraid they won’t get what they want,” Klobuchar said. “This is the definition of a monopoly because Live Nation is so powerful that it doesn’t even need to exert pressure, it doesn’t need to threaten because people just line up.”
She said that “failure to deliver has several consequences.” Taylor Swift “is just one example. Whether it’s Bruce Springsteen, BTS, Bad Bunny, or in the past Pearl Jam or the Pixies, fans, artists and clubs face real problems with Live Nation.”
Klobuchar said the hearing was a “two-way endeavor” with both parties’ interest in the matter.
Senator Richard Blumenthal told Berchtold that Live Nation’s finger-pointing at scalping bots ignores the control the company has in the market. Blumenthal pointed out that Live Nation can prosecute scalpers by reporting them to officials.
“You have unlimited power to chase bots – you have the resources and knowledge to take effective action now,” Blumenthal said, referring to the Better Online Tickets (Bots) Act passed by Congress in 2016, which fines scalpers who use bots. “If you’re concerned about artists, consumers, venues and the public interest, you would take action under the law.”
Berchtold said Live Nation supports stronger bot enforcement, but “we have a limited level of authority over something that hasn’t been consistently enforced.”
“We absolutely agree that there are many issues in the industry and as a leading player, we have a responsibility to do better,” he said.
Jerry Mickelson, co-founder of Jam Productions, a promotion company, criticized Ticketmaster’s inability to support bots in his witness testimony.
“As a ticketing company, one of the things they should be doing is developing solutions for bots. And that a leading ticketing company is unable to deal with bots is a pretty unbelievable claim,” he said.
Mickelson pointed out that Ticketmaster makes more money by selling tickets to artists like Taylor Swift as tickets become more expensive with dynamic pricing.
Jack Groetzinger, CEO of Ticketmaster competitor SeatGeek, said in a witness statement that Live Nation enters into longer contracts – often 10 years instead of the standard five years – in order to weed out competitors. Venues are often afraid of losing gigs if they go with a Ticketmaster competitor.
“We want competition in this industry. It will be very difficult to change that now. Longer contracts make it more difficult, and that’s it [Live Nation] pressed recently.”
Millions of Taylor Swift fans battled to get tickets for her Eras tour after Ticketmaster pre-sale glitches. Although Ticketmaster used its Verified Fans program – designed to ensure tickets go to fans instead of being scalped by bots – tickets quickly began to resell online for as much as $22,700.
Ticketmaster eventually canceled the sale to the general public, citing exceptionally high demand. The company said it ultimately sold over 2 million tickets for the tour and was able to fill 900 stadiums with ticket demand.
In a statement, Swift slammed Ticketmaster saying it was “really hard for me to trust a third party with these relationships and allegiances, and it’s excruciating for me to see mistakes happen with no way back.
“I am not going to make excuses for anyone as we have asked them many times if they can handle this kind of request and we have been assured that they can. It’s really amazing that 2.4 million people got tickets, but it really pisses me off that a lot of them feel like they went through several bear attacks to get them.”