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Concert Tickets: Service Fees, Face Value and Where Your Money Really Goes

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As the summer concert season is well underway, perhaps you’ve had to forgo a few other concerts you wanted to attend in order to afford a bigger show. The problem of high ticket costs has been a heated topic for a while now, but is it getting any better? With 53% of fans hearing about a show via online sites or email blasts, there is clearly greater access to tickets now more than ever, so why does it cost so much? Where does your money even go when you buy a ticket? And what are artists doing to combat high scalper prices? The answers are multi-faceted, as a few different factors have led to the general increase in ticket prices over the years.

So, let’s talk numbers. If you’re worried that your favorite artist isn’t seeing proper compensation from ticket sales, don’t be alarmed: about 65% to 90% of the face value of a ticket goes to the artist, which is reassuring considering the hit most have taken from decreased profits on album sales. Touring is by far the best way for artists to make a profit off their profession. Show costs account for 20% to 30% of the ticket’s face value, and city, state, and local taxes account for approximately 5% of the ticket’s face value. So why do ticket costs still seem so high? Maybe you’ve noticed that you have a $35 ticket in your online shopping cart, but upon checkout, the price doubled. You can thank service fees for that.

Alarmingly, service fees can add 30% to 40% more to an order cost. Service fees vary with the cost of each ticket, but they can be equal to the face value price of the ticket! In some cases, service fees can even cost more than the ticket itself. So what are service fees? Typically, they include a facility fee, convenience fee, and order processing. A facility charge is how the venue makes their profit from the show. In general, the venue sees 100% of the facility fee, which makes sense. This is how they pay the bills, after all. Convenience fees, however, are the main source of revenue for sites like Ticketmaster. It covers the costs they incur to provide their service, and returns them with a hefty profit for doing so. As far as order processing is concerned, Ticketmaster used to charge consumers $2.50 to print their own tickets at home, yet they would deliver tickets for free— somewhat of a backwards logic. Now, they’ve done away with the print at home charge, but it will cost you a pretty penny to have your tickets shipped or overnighted.

How have artists been responding to the industry-wide increase of ticket costs? In 1994, Pink Floyd became to the first band to begin charging higher prices for better quality seats, and they had the right idea— some seats are clearly worth more than others. 1999 saw an 18% increase in average ticket prices, and every year since has followed suit. Now, this kind of tiered pricing has become the norm in the concert industry, as average ticket prices steadily rise. Successful artists realized they could begin charging more since fans were willing to pay more: it’s a basic instance of the music industry meeting market demand for tickets. Gary Bongiovanni, editor-in-chief of Pollstar (a trade publication for the concert industry), says, “The really hot acts will be able to command pretty much what they want. The problem is the acts that are not on somebody’s must-see list. Even if you’re a real big fan, you’ve got to make your choices.” Big acts know they can demand big bucks in larger cities and for premium seating. According to Pollstar, Taylor Swift’s average ticket price is $115.89. Britney Spears’ is $146.26, The Eagles’ is $134.94, and Katy Perry’s is $100.89. Tom Petty brings in about $89.14 on average per ticket, while Dave Matthews Band gets $59.99, and Neil Diamond brings in about $109.84. Not all big name artists are deciding to charge this kind of rate, though. Bruce Springsteen and Pearl Jam are known for charging lower tiered rates that are below market value. They figure if they charge less for a ticket, the potential to make more inside the venue is greater, with fans being more likely to spend money on beer and merchandise. With big acts, promoters, and ticketing agents raking in plenty of dough from ticket sales, what are emerging, lesser-known artists doing to combat sky-high costs?

In 2012, the String Cheese Incident, a jam band from Colorado, decided they had enough of websites like Ticketmaster demanding outrageous ticket service fees from fans. So, they sent fifty friends and fans out to the Greek Theater in LA with $20,000 in cash— enough for each person to purchase eight tickets at $49.95 per ticket. All 400 tickets purchased were then brought back to the band’s headquarters and sold through their official site for $49.95. In essence, the band scalped their own tickets without charging fans a service fee. While this is a more drastic measure to combat LiveNation (i.e. Ticketmaster, House of Blues, TicketWeb, and TicketsNow) and their added fees, charging less for tickets doesn’t actually seem to protect the fan, as it rather increases the odds of scalping since scalpers know people will pay more than this lowered asking price.

As scalping laws vary state by state, it is hard to regulate the secondary ticket sales market. Legal ticket re-sale websites like StubHub are an industry worth an estimated $4.5 billion. Legitimate re-sale sites also face the problem of competing with illegal scalper bots. Essentially, bots are computer programs that bully real people (i.e. the fans) during online ticket selling. They skip the line, put a hold on tickets, and later resell them at a higher value, preventing your average Joe from getting his shot at tickets. Bots once accounted for 90% of traffic on Ticketmaster, an appallingly high number that sites have tried to combat with software to differentiate bots from humans (hence why you have to manually input odd security codes when ordering online). Arthur Fogel, head of global touring for Live Nation and U2’s longtime tour promoter, asserts that, “When you are an artist charging $200, and you see that those tickets are getting sold for $400, and $200 is evaporating into an economy that you have no piece of, I don’t think that’s fundamentally fair. But it’s a reality we live with, no different than people illegally downloading music.”

So with bots, scalpers, ticket re-sale sites, and high service fees, is it expected that we give up our first-born child or a limb in order to see our favorite acts? A few money-saving tips to take into consideration include buying directly from the venue’s box office. Typically, box offices avoid service fees, giving you a better chance at a more reasonably priced ticket. If getting to the venue isn’t feasible, try buying from the artist’s website directly. Fan clubs often offer pre-sale opportunities or member discounts. Ordering as far in advance as possible is another way to save, given that you’ll avoid rush delivery charges. Lastly, sites like TiqIQ help you determine if you’re getting a good deal or not by allowing you to submit a bid for a particular event. After you’ve selected your event, you determine your seating zone and ideal price point, and the site shops it around to ticket resellers, much like the platform Kayak uses with airline prices. After TiqIQ combines deals from these secondary ticket resellers, it delivers this pricing info to you all in one place. While you can take a few preventative measures to avoid getting ripped off, it seems that the question has now become: what are you truly willing to pay to see your favorite band?

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