theater in London for an experiment. Armed with five iPhones and customized barcode-scanning software, they spent two hours selling admission to nearly 3,000 fans who had learned of a surprise concert through word of mouth or email. The Pixies created the system with Topspin Media, a company that helps artists like Eminem, Metric, and OK Go market their music and wares directly to fans. “There was no surcharge, no booking fee,” says Richard Jones, the Pixies’ manager. “Thirty pounds is thirty pounds.”

Almost anyone who goes to concerts understands why this is significant. No service charge. Zero. The Pixies and Topspin had sidestepped the seemingly inevitable fees tacked onto any ticket. They had, in other words, sidestepped Ticketmaster, the juggernaut that sells more than 130 million tickets a year for everything from Lady Gaga shows to monster-truck rallies.

Started as an experiment, Ticketmaster has since developed a near lock on the multibillion-dollar ticketing industry. And the company is only getting bigger. Last winter it merged with Live Nation, the largest concert promoter in the country, which means that in effect Ticketmaster now also controls access to acts like U2 and Jay-Z and owns many of the amphitheaters in the US, including the Irvine Meadows/Verizon Amphitheater in California and the Nikon at Jones Beach Theater in Wantagh, New York.

Among fans and artists, of course, Ticketmaster is widely despised. It extracts high service fees (known commonly as “those goddamned Ticketmaster service fees”) but has offered very little innovation in ticketing over the past 30 years. The Pixies, for example, added thousands of names, complete with contact info, to their marketing database thanks to the Troxy gig—something they can’t generally get when they sell tickets through Ticketmaster. And now, in the wake of the Live Nation merger, many in the concert industry are worried that Ticketmaster might be more interested in promoting its own artists and venues than in selling tickets for rival acts.

This has unleashed a new scramble for alternatives. In offices around the US, startups staffed with veteran ticketing executives and backed with millions of dollars in venture capital are working to find new ways to sell seats to fans. Among them is Veritix, which runs Flash Seats—a paperless system for music and sports events; Ticketfly, a company that recently received $3 million in venture capital and, in addition to ticket sales, helps clients market events on Twitter and Facebook; and In Ticketing, which handles Burning Man and hundreds of other events. Many in the music business hope that, with lower fees and more ingenuity, some of these companies might be able to pry business away from the behemoth. “It would be great if a more nimble, more technologically savvy company could come along and figure out how to make money with much lower service fees,” says Tom Windish, agent for such cutting-edge acts as Hot Chip, the xx, and Yeasayer.

But Ticketmaster didn’t come to rule an industry by suffering interlopers. Over the past 30 years, the company has killed or eaten nearly every competitor: Ticketron, TicketWeb, TicketsNow, Paciolan, and Musictoday. And a potent combination of top artists, venues, and long-term ticketing deals makes Ticketmaster one Goliath well positioned to crush a whole army of Davids.

Peter Gadwa was an IT staffer at Arizona State University when he teamed up with Albert Leffler—then working at ASU’s performing arts center—to create Ticketmaster in 1976. The duo originally set out to design a ticket-selling program that would outperform a small, regional company called Select-A-Seat, which served the university’s theater. They succeeded—so much so that the pair soon took aim at a loftier competitor: Ticketron, then the dominant ticket seller in the concert business.

The ASU team members were using modest Digital Equipment computers while Ticketron had hyper-expensive Control Data mainframes. So Gadwa and Leffler simply out-programmed Ticketron, creating software that would allow their limited computers to behave like the more expensive systems, letting 500 operators log in to the system at the same time.

It took more than smart code, however, to turn Ticketmaster into one of the world’s most powerful entertainment companies. It took the arrival in 1982 of a new leader—Fred Rosen, a fast-talking lawyer and amateur comedian who had a profound realization: Ticketing isn’t about the bands or the fans. It’s about the venues.

Shortly after he was hired, Rosen systematically contacted the biggest concert halls and arenas in the country and made them all the same spectacular offer: Where Ticketron charged venues for its service (adding a minimal fee for customers—$1 per ticket), Rosen offered to actually pay the venues. He would increase service fees and split the money with whoever housed a concert or sporting event. Everybody signed up and Ticketron was quickly decimated. In 1991, it surrendered. “When Ticketron came to an end,” Gadwa says, “I felt more like we had stumbled upon a beached whale that had already died than defeated a fierce enemy in battle.”

This system continued for three decades. The underlying technology barely changed, however, even when it expanded in the 1990s to accommodate the Internet. Few computer systems can handle the strain of 500,000 Madonna fans all attempting to buy tickets seconds after the seats hit the market—not to mention withstand repeated attacks by bots trying to scoop up tickets for resale. But despite being the product of what even Ticketmaster executives acknowledge is 30 years of patches and workarounds, the company’s system is almost supernaturally reliable.

Then, in 2007, Live Nation president and CEO Michael Rapino, a former Canadian-beer executive married to onetime Star Trek: Enterprise Vulcan Jolene Blalock, decided that his promotion company owned so many venues that it should sell tickets itself. Rapino enlisted the help of an experienced German ticket specialist called CTS Eventim to build a new system, but the plan crumbled almost immediately. When a Phish reunion tour went on sale in January 2009, the new Live Nation Ticketing couldn’t manage 10 million Phishheads simultaneously vying for 250,000 tickets. The resulting press was horrible. Even worse, though, Live Nation discovered that concert fans were trained to buy tickets at ticketmaster.com—and nowhere else. Concert attendance dropped almost as soon as Ticketmaster’s site stopped serving Live Nation.

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Authors: Steve Knopper

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