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by hfhdjdks
967 days ago
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Sounds like a two-sided market, where a company gets their value from being able to connect one side (the artists) with the other one (the venues). What I find strange is that people aren't usually reluctant to sign exclusivity agreements because it's very limiting. How did ticketmaster get so big to begin with to force / convince people of signing exclusivity clauses? |
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By dangling more money.
In the 1980s, Ticketmaster beat the competitors (e.g. Ticketron) by offering the venues a better financial deal.
Ticketron charged the venues a service fee. Venues pay Ticketron.
Ticketmaster flipped that around and made a clever proposal: instead of charging the venue, we'll charge the concertgoing fans extra service fee(s) and we'll give the venue a percentage of the fees collected. To sweeten the deal, we'll even pay the venue _upfront_ money as part of signing an exclusive deal.
https://thehustle.co/the-sneaky-economics-of-ticketmaster/
That's why most ideas about creating a new ticketing startup to "disrupt Ticketmaster" are naive about how the underlying business deals actually work. E.g. if the well-meaning programmers have idealistic motivations to create a new "fair ticketing" system that doesn't charge outrageous fees, the venues will not sign up with you which means you have no tickets to sell at the "cheaper & fair price".
Why would the venues use your new "fair ticketing" system if it means they get less money?!? That's the financial puzzle a viable Ticketmaster competitor has to solve.