For those of you who have been following Ticketmaster's attempt to join forces with Live Nation (and even those who haven't), today has brought some major developments.
On Monday, January 25, the Department of Justice (DOJ) announced that it has placed some restrictions on Ticketmaster's proposed merger with Live Nation. Although it's too early to predict final outcomes, it's possible these conditions will have an impact on the entire live music ecosystem, from ticket sellers to venues to artists to concertgoers.
Back when we first told you about the merger, principal players Irving Azoff (Ticketmaster/Front Line Management) and Michael Rapino (Live Nation) were talking about how fusing the two companies would result in greater efficiencies and innovations that would ultimately benefit the consumer. But those who oppose the merger warned that by combining the biggest ticketing company around (Ticketmaster, which had already merged with Front Line Management, which represents some of the most powerful bands in the biz) with a promotions company that owns venues and had recently gotten into the ticketing game itself (Live Nation), we'd end up with a huge monopoly with power over almost every part of the concert industry. FMC provided a forum for those for and against the merger to air their views; check it out here.
Now on to today's developments. Here's a breakdown of the DOJ-issued conditions placed upon the Ticketmaster/Live Nation merger.
First, Ticketmaster must give AEG (a major concert presenter that also owns big venues and sports teams) access to its ticketing software. According to the DOJ, this would create conditions for a possible competitor to arise — whether it's a spinoff/subsidiary of AEG, or another company purchasing infrastructure originally hatched at Ticketmaster (but potentially tweaked and/or improved).
Second, Ticketmaster will be forced to relinquish control of Paciolan, a multi-service ticketing company it currently owns. The DOJ said that this condition was put in place to offset the competition that will be lost in the marketplace due to the proposed merger. From what we gather, this provision might make a difference in how much you shell out for those Lady Gaga tickets. (C'mon, you can admit that you like the Lady.) Paciolan apparently offers its clients a degree of flexibility in lowering service charges, so the theory is that if the company is "spun off," Ticketmaster will have more incentive to lower its own prices to compete in the marketplace.
Third, the Ticketmaster/Live Nation conglomeration will have an "anti-retaliation" provision placed upon it, preventing the merged firm "from retaliating against any venue owner that chooses to use another company's ticketing services or another company's promotional services, including restrictions on anticompetitive bundling." Clients who no longer want to do business with the merged company would be free to take their own copy of sales-related ticketing data with them.
Finally, the proposed settlement would establish firewalls to protect confidential data and prevent Live Nation/Ticketmaster from using information acquired through its day-to-day ticketing operations within its promotions or artist management arms.
If you're wondering what sort of long-term impact these conditions will have, the answer is — it's hard to know. According to the DOJ, "these remedies will preserve the competition that Ticketmaster faced from Live Nation." But at the end of the day, it might be a while before the effects of the merger (and its restrictions) play out in the marketplace, and on musicians. We'll definitely be watching developments.