Yep. If you want to outcompete Ticketmaster you have to increase your revenue by jacking up the ticket prices even more (so your real customers get more money).
What if a startup worked with upcoming artists to book venues that aren't your typical music venues? The venue gets traffic it wouldn't have otherwise gotten, the artist keeps ticket prices lower (which promotes more exposure with their fans, and increases the profitability of touring).
Not a lot of venues that "aren't your typical music venues" have the kind of infrastructure (including but not limited to security procedures and PA) necessary for the kinds of bands LiveNation is signing.