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Touring
What Will The Live Nation Antitrust Verdict Mean For Canadian Live Music and Ticketing?
Last week, Live Nation and Ticketmaster were found guilty of violating federal and state antitrust laws. Could this prompt similar action in Canada?
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In the week since Live Nation lost its blockbuster antitrust trial, many in the music industry have been wondering what’s next — not just in the U.S., but in Canada too.
Though the verdict applies solely to the U.S., where the Department of Justice and a coalition of states held the trial, its consequences could spread north of the border.
In its verdict, the jury found that Live Nation was acting as an illegal monopoly, controlling the market for ticketing services, concert ticketing and the use of amphitheatres, and that it illegally tied the use of its venues to its concert promotion services.
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“The jury’s verdict is not the last word on this matter," Live Nation said in a response to the verdict. "Pending motions will determine whether the liability and damages rulings stand. Of course, Live Nation can and will appeal any unfavorable rulings on these motions.”
The outcome is still to be determined, but could possibly force the sale of Ticketmaster in the U.S.
“A ruling like this is monumental,” says Lucas McCarthy, the founder and CEO of Showpass, one of Canada’s biggest independent ticketing companies.
In either country, government entities rarely intervene to rule on anti-competitive business behaviours, he says, and when they do it’s usually for cases involving staples like the Loblaw bread-fixing scandal.
“This is a sign of the times that ticketing and live events are as important to people as core basket items like food and shelter,” McCarthy tells Billboard Canada. “It’s a good indicator that society holds live entertainment at the very forefront.”
In Canada, as in the U.S., Live Nation and Ticketmaster control a vast majority of market share in the live sector.
Showpass has built a viable model headquartered in Calgary by aiming at different kinds of markets like theme parks, aquariums, museums, zoos, fairs, holiday markets and other “experiences” in addition to live entertainment and music. By sheer volume, not price, he says, Showpass might arguably be the biggest ticketer in Canada.
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“As a competitor, I think this [verdict] is a step in a good direction, even if it’s not immediately reflected in Canada,” he says.
Tixr is another significant independent player in the ticketing industry. Though it was founded in the U.S., the company has a sizeable presence in Canada with operations headed by Stéphane McGarry.
A "Blueprint" for Canada?
In an interview alongside CEO and co-founder Robert Davari, McGarry says he is also optimistic the verdict could lead to similar scrutiny in Canada.
“I do think there’s an opportunity for Canada to follow suit,” he tells Billboard Canada. “The U.S. is a very tough market to prove monopolistic behaviour, and it has now been proven in court. So now if Canada’s Competition Bureau were to have a look at this, which we’re hoping they do, they have a blueprint for how to think about it.”
A spokesperson from the Bureau says they are monitoring the impact of the trial.
"We are aware of the recent verdict in the Live Nation case in the United States," the spokesperson says in a statement to Billboard Canada. "We continue to monitor the work of our international counterparts, while recognizing that each jurisdiction operates within its own legal framework."
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In January, the Consumers Council of Canada filed an application for permission to sue Live Nation and Ticketmaster before the Canadian Competition Tribunal. During that process, the Bureau confirmed it was not already conducting an inquiry.
However, a previous investigation in 2019 found that Ticketmaster's advertised ticket prices were misleading due to mandatory fees added later in the purchasing process. The company was charged a $4 million penalty and $500,000 for costs incurred by the Competition Bureau during its investigation.
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The amount of power Live Nation holds in Canada is similar to the U.S., though, McGarry argues, and it operates in similar ways.
One of the central figures in the court case, Live Nation president and CEO Michael Rapino, is even Canadian himself and cut his teeth promoting shows in the country.
Davari was also listed as a witness in the DOJ trial, but didn’t have a chance to testify before a closed-door settlement that was later tossed out.
The Tixr co-founder says he had prepared specific examples to show how Live Nation and Ticketmaster’s vertically integrated model blocks companies like his from competing in a free market, whether due to direct influence, through acquisitions, or indirect pressure.
A New Era For Independents?
Davari says in the 13 years since his company launched, Live Nation has acquired several different venues Tixr had ticketing deals with, and subsequently lost the contracts to Ticketmaster for all of them. In Canada, McGarry says he has also had similar experiences throughout his career with festivals and venues in Toronto, Vancouver, Ottawa and Montreal. Live Nation has purchased a number of venues and promoters in many of those cities in recent years.
“In most industries, the best service and the best product win,” Davari says. “And the reality is, because of one dominant entity, this is an industry where that is not the case.”
Tixr’s very existence is a counter-argument to Live Nation’s claim that its success is due solely to merit and not external pressures, he argues.
“We built this company to be a modern, more efficient, more capable alternative to Ticketmaster,” he says. “But our addressable market has been compressed so dramatically because of the vertical integration of their promotions arm, their management arm and their ticketing arm. It creates a broader sphere or influence that transcends the ability for people to make a product-first decision.”
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While Showpass built its company by focusing on markets where they could compete beyond arena-level concerts, this verdict could create a more open marketplace where innovation can thrive at every level, argues McCarthy. He points out that some other “legacy” ticketing companies do billions of dollars in business but still lack basic consumer functionality like Apple Pay or the ability to select assigned seats on mobile devices. Now, he says, more companies might be willing to build alternatives without being discouraged by inability to compete. And that could be passed down to the fans.
“This might create a new category of businesses that are more inspired and willing to participate,” he says. “I think we’ll see significantly more innovation.”
Both Showpass and Tixr operate with different business models than Ticketmaster.
In addition to building an edge in different types of live experiences, the company also works with independent promoters to use sophisticated data tools — like listenership, streaming and social interactions — to predict up-and-coming artists to book for shows. It has also created a platform to help coordinate independent organizations to buy talent collectively across Canada, making it more economical for artists and venues than buying a single stop on a single tour.
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“We’ve put a ton of tech into one box to give independents the ability to compete at the level of a multinational conglomerate without the same overhead,” McCarthy says.
McCarthy boasts that Showpass has put $3 million into the Canadian economy in the past 30 days by investing in independent events like the self-produced SUMO Fest.
Tixr touts what it calls a “pro-fan, pro-promoter” model that empowers businesses they work with by providing full control of key assets, such as owning their data, and providing tools for managing the resale market and offering upgrades to fans. Tixr provides tools to sell merchandise, food and beverages using the platform alongside tickets.
Despite their optimism around the DOJ trial, neither considers itself an adversary to Live Nation, but rather a peer that they’re hoping they can share the market with.
Tixr says its sophisticated tech can even help Live Nation, and is happy to work with them as with other companies. The live entertainment sector continues to grow, so this is happening at an opportune moment. As soon as the market opens up, McGarry says they’re ready to work with everyone in Canada, including “the big boys.”
Now, McGarry is hopeful the Competition Bureau will conduct a new inquiry, and is open to the possibility of putting together a group of companies to lobby.
“If you know Canada, you know it might be a slow burn,” he says. “But at the end, [if things change], it’s the fan that’s going to be much happier.”
Live Nation Canada declined to comment for this story.
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