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How Ticketmaster ruined the concertgoing experience, and how it might be saved

OK Go at the 9:30 Club, which is not a fan of Ticketmaster. (Kyle Gustafson/FTWP)

Nathan Hubbard, the CEO of Ticketmaster since it merged with Live Nation in 2010, said all the things you'd want to hear from someone trying to reposition one of the most hated companies in America.

"Any artist who cares about this industry would die to be in my chair and try to make sweeping changes," Hubbard told Fast Company, at the outset of his tenure.  As a singer-songwriter himself, who' led the entertainment marketing service Musictoday before Live Nation bought it in 2006, he told audiences: "I set out to evolve this company into everything that I wanted it to be as a client and everything I was candidly afraid it might become when I was a competitor." And he did do some things: Integrated with Facebook, launched dynamic pricing, partnered with Walmart. For his work, Hubbard was given raises and bonuses, making millions of dollars a year.

But on Monday, the news broke: Hubbard was out. Live Nation had installed another executive, and was circulating an expanded version of his job description. What went wrong?

In this case, the consensus explanation works: Thirty-seven-year-old Ticketmaster is still a jankety beast that's hard to navigate online, and Live Nation wanted a bona fide internet wizard. It needs to be able to target customers by their likes and dislikes as well as any company in Silicon Valley--or as well as possible, given that the terms of the 2009 merger placed a data firewall between the promotions and ticketing sides of the enterprise--which the artist-minded Hubbard failed to deliver.

"It's dominant in its business, but has 28-plus-year old technology," says Maxim Group analyst John Tinker. "People are still faxing over seating schedules. Half the time at Ticketmaster, you can't even find out where you're sitting…It's not that [Hubbard] did a bad job. It's just that you've got eBay, you've got a bunch of other services that are technologically very proficient. Larry and Sergey are never going to work at Ticketmaster."

But Hubbard also faced another problem: Ticketmaster didn't achieve its 2010 high of 83 percent market share by being the most user-friendly interface, or even through the monopolistic lock-in effects of being part of the world's biggest concert promoter (though things like signing multi-year contracts with Madonna help). It got there by taking the brunt of fan hatred for finding ways to justify exorbitant fees on top of listed ticket prices, half of which would go back to the venues, which would in turn book through Ticketmaster again and again and again. You might feel like you're getting gouged, but you really want to see Lady Gaga, so you'd put up with Ticketmaster no matter how annoying it was.

"People get so used to one way of doing things," explains Casey Rae, deputy director of the Future of Music Coalition, which has a great primer on the Live Nation-Ticketmaster merger. "When companies control this much of the marketplace, they're able to manufacture consumer consent."

There are, however, limits to that business model. Industry revenue has been rising, but there are many new competitors (most notably StubHub, where people often resell tickets bought in bulk from Ticketmaster, and which recently did a deal with chief concert promotion rival AEG). Plus, the recession put a dent in peoples' willingness to pay top dollar for giant events.

"What you've got is a classic bubble, and I can pretty much guarantee that it will pop, the only question is when," says Rae. "I don't think you can run a live music economy on people going to shows once a year because they can't afford it. "

And the live music economy is changing. Few artists make much money selling tracks, and therefore have to go on tour--but can't book the kind of large venue that would be worth Ticketmaster's while. For those, there's Brown Paper Tickets, Ticketfly, Tickethorse, and Ticketleap,* all of which are steadily eating into Tickemaster's marketshare, and are poised to grab more should the giant stumble.

The two-year-old Tikly, run out of Des Moines, Iowa, is surely the most indie. They don't charge to use the service, and have a simple tiered pricing scheme. Instead of partnering with a live concert promotion business, they've buddied up with a Kickstarter-for-albums called Pledgemusic, in a pairing that more closely reflects how musicians support themselves in the digital age--without a major label or expensive touring contract. And it's the kind of thing that could scale quickly to cover emerging artists around the country, who might stick with them when they make it big.

"We're the ticketing company for the next Macklemore," says 23-year-old founder Emma Peterson, who started the company after searching in vain for a platform that would work well for a band she managed. She just passed $1 million in sales, and is in a much better position to match the new musical landscape without the legacy costs of a massive incumbent like Ticketmaster.

"Let's not pretend like it costs anybody two dollars for you to print your ticket at home," Peterson says. "I'm sure it's very difficult to wrap their minds around changing at all, with the amount of costs they have to cover. Am I in an enviable position because I'm a startup? Yeah."

With actual customer loyalty, she thinks, market domination isn't necessary.

"We could get out there and try to control the whole world," Peterson says. "Or we could try to make the seller-focused, buyer-friendly ticket company and challenge how the business has worked for so long, and say none of that matters, or is even necessary."

An earlier version of this article identified TicketWeb as a rival to Ticketmaster. In fact, it is owned by Ticketmaster.