If you want to go to a rock concert, the Fourth of July fireworks show, a sports event or even your kid's annual dance recital at the local performing arts center, you'll more than likely get your tickets through Ticketmaster Inc.

The West Hollywood company, a division of Barry Diller's IAC/InterActiveCorp is still the heavyweight champion of seating in the entertainment industry. But it's facing challenges on several fronts.

Discounters such as Goldstar Events Inc. are popping up. Organizations such as Major League Baseball are setting up their own online ticketing. And it is facing the loss of its contract with Beverly Hills-based event producer Live Nation Inc. its largest client.

"We are seeing, for the first time over the past couple of years, hints at an attack on Ticketmaster's economic model," said Sumit Desai, an analyst who covers IAC for Morningstar Inc. "They have been pretty much the default for promoters and venues, but we're slowly seeing attacks on that StubHub, RazorGator and now other sites."

Ticketmaster has long been a star for IAC. The conglomerate owns about 65 brands including HSN, Match.com and LendingTree. In 2006, Ticketmaster did $1.1 billion in revenue, of which $835 million was domestic business. The total represents about 19 percent of IAC's $5.9 billion revenue last year.

Ticketmaster's second-quarter results were cause for concern. Operating income fell 22 percent to $59 million from $76 million for the same quarter the previous year, while revenue was slightly higher than the same quarter in 2006.

"While we expected this quarter to be difficult, we did not anticipate the softness in domestic ticketing volumes which impacted Ticketmaster," Diller said in a statement after the earnings were released. "We are not satisfied with these results whether driven by market conditions or our own hand and are taking every appropriate action."

Among the actions: expansion in the international market, including moves into China and Eastern Europe.

Ticketmaster built its stranglehold on major concerts and other live events by locking up exclusive rights with venues and promoters to sell tickets. Its partners got a percentage of its often hefty ticketing fees, and it established a huge network of retail points of sale and phone banks nearly 3,500 retail outlets and about 20 call centers.

Tough act

A recent low point for the company was the memo in which Ticketmaster disclosed it was unlikely to negotiate a new long-term agreement with Live Nation, which, with its House of Blues subsidiary, generated close to 20 percent of Ticketmaster's sales last year.


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