Guest post by: Evgenia Kanellopoulou
Live Nation and Ticketmaster merged in 2010. This merger was greeted as the worst tsunami to hit the music world since Napster – with room for exaggeration.
The majority of the music lovers are either familiar with the events of the merger or at least remember the dismay with which it was met: internationally, artistically and industrially. Characterisations such as “Satan’s Box office” and “Microsoft of the Music World” were teamed up with accusations and dismay by artists, academics and professionals. 3 years later and as the dust settles, we are left with an arguably not so profitable “monster nation” and many unanswered questions on the very nature of the music industries: what did actually happen and after all… so what? What was the grand peril the merger between the two key players of the music industries would put “us” in and what did the relevant authorities do about it? Finally, what are we left with 3 years later and is the matter still relevant?
In order to answer, or at least elaborate on the previous questions, let’s take a step back in time when live music shows and touring was nothing more than a means of promoting a newly released record. A lot has changed since these days, as within the past fifteen years live music production is acquiring a standalone corporate presence: businesses involved in the production chain of live music started to merge both horizontally and vertically and a new record is not a prerequisite for a successful tour.
While there was great corporate interest and much commercial activity surrounding the live music sector (or industry), it might very well be the case that the relevant legal authorities were “caught off guard”. Indeed this becomes apparent when a closer look is taken at the Live Nation / Ticketmaster merger as dealt with in the UK and the US:
While there was public outcry at the potential for more expensive concert tickets this alone was not reason enough to block a merger. In order to legally assess its impact one key thing appeared to be missing: the relevant product market. Given the breadth and length of the Live Nation and Ticketmaster activities – ranging from Artists’ Manager, to booking agent, to promoter, to venue manager, to ticket agent – in what market exactly would their merger potentially harm competition? Both Live Nation and Ticketmaster were omnipresent in all stages of live music production prior to the merger, but was there a separate market for live music productions in a legal sense? In other words, is there a separate live music industry within the music industry?
Unfortunately this question has yet to be resolved: The nature of the live music business and its relation to the traditional music industry is a matter that still to this day is under investigation: It remains a blurry image to traditional black letter law authorities such as the US Department of Justice or the UK Competition Commission.
For the purposes of the law the merger was treated as a merger between ticket agents only. There was some justification for this approach: At the time of the merger it was true that Live Nation had started entering the ticketing market and had considered self- supply to cover its ticketing needs.As far as the UK was concerned therefore while the merger might have has an impact by inhibiting the German firm Eventim from entering the ticketing market it was on balance deemed acceptable.
The US resolution however leaves more room for interpretation. There the case had to be settled and a new competitor had to be created out of divested Live Nation assets (merger cleared with remedies). The Department of Justice recognised the complexity of the issue but by rushing down the settlement route it avoided the need to provide answers regarding the nature of the market or the possible implications on all levels of the supply chain for live music events.
As a result, the concerns of many academics and industry professionals were not addressed: is there a separate market for the live music industry and what does it consist of? Had the market been defined differently, would the merged have been blocked or at least treated differently? Unfortunately, the competition authorities did not cater for the needs of music industries aficionados. They did however add to our concerns and provided us with proof that there is a matter to be discussed and there is research to be done: the research on the music industries is relevant and might even be relevant on more levels than we might have imagined.
In the fast paced music industry business models and business trends, corporate stories and strategies, all evolve rapidly. This both creates conceptual obstacles for the legal authorities and vice versa: legal authorities are often called to evaluate and assess situations with which they are not always familiar. The research and the debate on alternative business models seems crucial in this scenario not only vis-a-vis the re-design of the music industries in their corporate form, but also because what the creator themselves now perceives as a viable business model has changed dramatically. New and upcoming artists and well established artists alike are aware that it’s not a matter of copyright assignment to a record company anymore. The multitude of emerging business models makes the definition of a “music product” hard to define and correspondingly the difficulty in defining a product makes competition laws hard to apply.
The bridging of the gap appears to be crucial not only for the rightful application of the law, but also for the uninhibited evolution of the industry as it reacts to potential threats and responds to its commercial and financial survival instincts. This subject matter is very much still relevant.
To be continued….