Live Music Sector Calls for Change to Combat Unfair Practices

A recent parliamentary inquiry into the challenges facing Australia’s live music sector has put forth a series of recommendations aimed at ensuring fair practices within the industry. The inquiry specifically urges the Australian Competition and Consumer Commission (ACCC) to actively monitor the sector for any instances of anti-competitive behavior, with a particular focus on the controversial practice of extreme dynamic pricing.

The inquiry's final report, titled Am I Ever Gonna See You Live Again, highlights the pressing need to amend consumer laws to enhance transparency regarding fees and charges associated with concert tickets. It stresses the importance of eliminating practices that may distort consumer choices, even if they do not necessarily appear misleading or deceptive. Such practices include those that create an unnecessary sense of urgency or scarcity among consumers.

Over the course of the nearly year-long inquiry, many witnesses voiced concerns that the decline of the live music sector can be linked to a lack of competitive forces within the industry. One contributing factor is vertical integration, whereby a single parent company manages various aspects of concert production, including venues, ticketing, and resale.

According to findings from the inquiry, major players in the market such as TEG Live, Live Nation (owner of Ticketmaster), and AEG Frontier are controlling approximately 90% of the major concert market in Australia.

Independent concert promoter Supersonic Australasia provided evidence illustrating that the fees associated with ticket sales on platforms like Ticketek and Ticketmaster are typically double those charged by smaller independent companies, such as Oztix.

Live Nation defended its structure by asserting that its Ticketmaster and Live Nation segments operate as entirely independent entities. They argued that the decision regarding which ticketing company to utilize rests with venues rather than promoters.

TEG Live noted that many of the larger venues in Australia are owned by state governments, which frequently carry significant financial risks while receiving only a small percentage of the profits, generally ranging from 10 to 15%.

The impacts of the COVID-19 pandemic have been severe for the live music sector, with approximately 1,300 venues disappearing and nightclub attendance nearly halving compared to pre-pandemic levels. The inquiry found that only half of the festivals held in the post-COVID environment managed to turn a profit, with a median profit of $731,579, while approximately 35% reported losses averaging $470,000.

This sector is an essential component of Australia’s cultural and creative industries, contributing around $21.8 billion to the national GDP. Various factors like rising insurance premiums, unpredictable weather, fluctuating ticket sales, and new technologies – including algorithms from streaming platforms like Spotify – have all posed challenges.

For instance, one venue reported that its public liability insurance jumped from $10,000 to $60,000 in just one year. The Laneway festival shared its experience that cancellation insurance has seen a 280% increase in costs over four years.

Costs related to policing have also become a significant burden for music festivals in certain regions. A festival in Melbourne might incur police fees between $10,000 and $15,000, while the same festival in Brisbane could cost up to $60,000, with fees in Sydney reaching approximately $150,000.

In light of these findings, the report suggests that state and territory governments consider reducing or potentially eliminating user-pays policing charges at music festivals. Among its 20 recommendations, the report also suggests that Treasury look into providing a tax offset for the live music industry, akin to the incentives used in the film industry. Additionally, it proposes the introduction of rebates or voucher schemes to encourage younger audiences to attend live events, as well as a modest levy added to ticket prices of larger events to support smaller venues and grassroots live music initiatives.

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