Music Merger: The Sound of Monopoly

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Ticketmaster and Live Nation, the largest ticket broker and the largest concert promoter, respectively, intend to merge, according to The New York Times. Barring anti-trust regulation, the merger would create the largest concert conglomerate worldwide.
However, “barring anti-trust regulation,” is a big “if” in regards to the merger. With a new administration in office, people can only speculate as to what stance the government will take toward such a proposition. On the one hand, recent liberal administrations tend to favor consumer-oriented, hard-line anti-trust regulation — see the initial holding in the United States vs. Microsoft. However, President Barack Obama’s tenure at the University of Chicago could imply an allegiance to the Chicago School of Economic Policy that favors a more libertarian, free-market approach over government intervention.
Either way, the attempt at a merger is indicative of the direction the music business is heading toward. Favoritism toward large commercial acts, big venues and lowest common denominator promotion is nothing new, but it still doesn’t bode well for smaller, independent acts and niche venues, like jazz clubs. They have never needed large promotions, and won’t in the future; wishful thinking for a small-act oriented for a subsidiary is just that in the face of a large conglomerate.
A Ticketmaster-Live Nation merger would be a natural extension of the horrid direction the music industry is heading toward. Do you really need a more concentrated cradle-to-grave solution to shove advertising for a Rhianna concert down your throat? Do you need even more saturation than the Internet ads, TV ads, radio ads, movie theater ads, e-mail spam, text spam, billboards and digital billboards they already exhibit?
On a personal level, hugely saturated advertising schemes for big-ticket acts are turn-offs. Unless I really have a desire to see someone, I shut the advertising out. And if I want to see someone, chances are I already keep up with their tour schedule online. I don’t think that this insulation is unique to my circle. However, a few thousand 20-somethings who are pissed off at their advertising won’t stop all of their parents from going to see The Eagles, put on by the very same company. Advertising, much like everything nowadays, isn’t the same as it was 10 years ago, and while Ticketmaster-Live Nation should understand that, it doesn’t need to.
Also expected with the merger are higher ticket prices. A $75 ticket with a $15 service charge will transform into a $90 ticket before any other incidentals. And, as a conglomerate, who’s to stop them? This would also have a ripple effect in the ticket resale market, as Ticketmaster-Live Nation ticket prices could hit a sweet spot where they are just expensive enough for the consumer to be able to afford them, but too expensive for a reseller to make any profit off of them (or enough to stay in business). It is arguable that Ticketmaster-LiveNation could, conceivably, destroy the ticket scalping industry.
Finally, the merger could end up creating superstars that the country doesn’t need. We’ve already established that a Ticketmaster-Live Nation merger could act without regard for their actions, because they would be the solitary big fish in the figurative pond of ticket brokers. This could mean that if they don’t want to split profits with Disney over Miley Cyrus/Hannah Montana, the Live-Nation arm could essentially create their own superstar property and push them in a national concert market with Ticketmaster — like American Idol without the show, essentially.
For the sake of the music industry and corporate regulation, we can only hope that the Obama administration takes a firm stance out of the gate for anti-trust regulation, and against base commercialism (even if his daughters Malia and Sasha like Hannah Montana.)

Michael Boileau is a third-year business economics major. He can be reached at mboileau@uci.edu.

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