The bosses of Live Nation and Ticketmaster were questioned by the snappily titled US Senate Judiciary's Subcommittee On Antitrust, Competition Policy And Consumer Rights yesterday with regards their proposal that the two live entertainment firms merge.
The Subcommittee concerned itself with the impact the merger may have on ticket prices and on new players entering the ticketing market, and on the possibility of Live Nation having access to sensitive data regarding how well events promoted by its rivals are selling, because they sell tickets via Ticketmaster (the merging firms deny Live Nation promoters would have access to such data).
As well as Live Nation topman Michael Rapino and Ticketmaster chief Irving Azoff, the heads of a number of smaller US tour promotion firms, including JAM Productions and IMP Productions, were also there to say what a bad idea they thought the merger proposal was.
According to Billboard, JAM Chairman Jerry Mickelson told the hearing: "This is vertical integration on steroids. If this merger is allowed to proceed, the combined entity will have the ability to suppress or eliminate competition in many segments of the music industry, including rival concert promoters, primary and secondary ticketing companies, artist management firms, talent agencies, venue management companies, record companies, artist merchandise, music apparel and licensing companies, and sponsorship companies".
But Azoff countered that the merger proposals were a response to changes in the music industry, and that they would allow artists to maximise non-traditional revenue streams, and in doing so help them pass on savings to consumers on things like recordings and tickets. He told the hearing: "Artists don't sit around and say, 'Let's raise prices'. If we're successful in doing this, I for sure think we'll be able to show that ticket prices will go down, because it will create a bigger pot of money for artists from other avenues in their careers".
Other experts were less convinced that the merger would result in cheaper ticket prices, arguing that only commercial competition would force prices down, and there'd be less of that around if Live Nation and Ticketmaster merged. But Azoff countered that he expected some of Ticketmaster's bigger clients - ie the bigger tour promoters - to look elsewhere once his company was merged with their rival Live Nation, and that that provided opportunities for the company's competitors, and would motivate the merged Live Master to be more competitive.
One of the senators on the subcommittee also questioned Azoff about his company's secondary ticketing firm TicketsNow, referencing recent concerns that Ticketmaster was redirecting customers to from its primary tickets service to its resale site without properly communicating the implications of buying tickets from the latter - ie that they are sold by unofficial touts, and often at marked up prices.
Ticketmaster has already promised to review the promotion of TicketsNows via its primary site, but the committee wanted to know if Azoff was considering selling the resale service on if the merger went through. Azoff responded that he "wouldn't have bought it" if he'd been planning to just sell it on, though added: "If you'd like to make an offer, senator, we'd love to hear it".