Whether or not artists have control over ticket prices for their concerts and shows is a complex question with no simple answer. There are many factors that go into setting ticket prices, some within the artist’s control and others that are determined by the industry and market forces. Ultimately, most artists have some but limited influence over what their fans end up paying to see them perform live.
What determines ticket prices?
Some of the key factors that go into determining ticket prices for concerts include:
- The artist’s stature and draw – More popular artists who can sell out arenas and stadiums can demand higher ticket prices than less established acts.
- Production costs – Larger concert productions with elaborate lighting, sets, costumes etc. have higher overhead costs that drive up ticket prices.
- Venue size and location – Concerts held in large venues in major cities tend to have higher ticket prices.
- Promoter and ticketing service fees – A portion of every ticket often goes to the concert promoter and ticketing platforms, which is added onto the base ticket price.
- Market demand – Simple supply and demand economics also plays a role in determining what price fans are willing to pay.
While artists may have some control over their initial tour budget, venue selection, production design, and setting base ticket prices, there are many other players involved in ultimately determining the final ticket cost.
Who sets ticket prices?
The artist’s management and tour promoter typically work together to set ticket prices in consultation with the artist. Some of the parties who influence the final price include:
- Artist management – Aims to balance supply and demand while factoring in the artist’s wishes.
- Concert promoter – Estimates market demand to maximize revenue based on artist popularity and tour logistics.
- Venue – Has a vested interest in shows selling out and may dictate minimum ticket prices based on their overhead costs.
- Ticketing services – Platforms like Ticketmaster add on their own fees, driving up the final price.
While artists may be able to set price ranges and parameters, they rarely if ever have complete unilateral control over determining the exact ticket prices for their shows. The artist’s team has to work collaboratively with various stakeholders who also look after their own interests when pricing tickets.
Factors Limiting Artist Control Over Pricing
There are several key factors that limit musicians’ direct control over how much fans pay for concert tickets.
Independent concert promoters or promotion companies like Live Nation and AEG are often responsible for organizing tours and shows. They cover upfront tour costs and bear the financial risk in exchange for a cut of ticket revenue.
Promoters leverage market research, data analysis, and their experience to price tickets based on estimated demand. They aim to maximize profit and may push for higher prices than the artist prefers. Artists have negotiating power, but promoters ultimately decide if a tour is financially viable at certain ticket price levels.
Venues cover overhead costs out of ticket revenue, including:
Therefore, they often insist on minimum ticket prices and favor higher prices in general. Large venues also rake in money from premium seating, concessions, parking, and box office fees. Artists who want to play prestigious stadiums and arenas may have to agree to prices dictated by venue ownership.
Ticket Resale Market
Ticket resellers purchase tickets hoping to sell them at a profit on secondary markets. Artists do not see revenue from inflated resale prices. Fans are willing to pay more than face value for hot shows where demand exceeds supply. Resellers take advantage despite artists’ objections.
Anti-scalping measures like paperless ticketing are not foolproof. As long as a lucrative secondary market exists, artists have minimal control over what fans end up paying in total.
Pricing Strategies Used by Artists
Though limited in their pricing power, artists use certain strategies to make shows more affordable for their fans.
With dynamic pricing, ticket prices fluctuate based on market demand instead of being static. Prices start lower and increase as show dates get closer and remaining ticket inventory drops. Fans who purchase earlier pay less than last-minute buyers.
Artists like Eric Church and Kid Rock have employed demand-based pricing. It allows them to keep some tickets affordable for cost-conscious fans.
Many artists set aside tickets to sell at below market rates for select groups:
- Fan club members
These discounted sections improve access for lower-income groups. Setting caps on the number of discounted seats prevents dramatic losses in potential revenue.
Small Venue Shows
Megastars playing arenas can price out some listeners. Scheduling club gigs and theater shows in between increases affordability. Intimate venues have lower overhead and simpler production, leading to reduced ticket prices.
Bundling combines concert tickets with other perks as a single package. Potential perks include:
- Meet & greets
- Signed merch
- Limited edition items
- VIP amenities
Fans get more bang for their buck while artists earn more revenue from bundled extras. Creative bundling provides value beyond just show access.
Free concerts remove the ticket barrier altogether. Venues and festivals sometimes cover costs and pay artists a flat fee. Band members also do surprise pop-up gigs in public places for exposure. Free community shows build fan loyalty despite no direct earnings.
Do Artists Make Money from Ticket Sales?
On a typical tour, the artist makes money from ticket sales in the form of a guaranteed payment that promises them a minimum income. Their income is not determined by the base ticket price directly.
Promoters provide an upfront guaranteed payment to artists for each show on a tour. The guarantee ensures the band gets paid whether tickets sell out or not. Renegotiating guarantees can be used as leverage when artists want more control over pricing decisions.
Guarantees for superstar acts can be millions per show. Supporting acts receive smaller guarantees or play only for a percentage of ticket sales.
After covering production costs, the remaining revenue is split between the promoter and artist according to contract terms:
- 80/20 splits favoring the promoter are common for newer artists.
- 50/50 splits for established acts with negotiating power.
- 60/40 or 70/30 splits are also used.
Higher ticket prices can drive up revenue splits. But it is not a direct dollar-for-dollar gain for the artist based on the base ticket cost that fans pay at checkout. Promoters may adjust artist payments formulaically, but guarantees limit the impact of per-ticket price inflation.
Secondary Ticketing Market
The secondary market for tickets resold by third parties is largely out of the artist’s control in terms of pricing.
Supply and Demand
Hot shows with low ticket supply and high demand create a profitable environment for scalpers and resellers. They can buy up inventory and flip it on sites like StubHub at a premium. Limited supply causes prices to be bid up among competing buyers.
Promoters may place restrictions on ticket transfers to crack down on scalping. But apart from non-transferable paperless tickets, most traditional tickets can exchange hands multiple times at variable prices once purchased. Transferability enables the secondary market.
No Direct Revenue for Artists
When a scalper buys a ticket for $100 and sells it for $400, the artist does not receive any additional income. The inflated secondary price represents pure profit collected by resellers. The artist already got their revenue split from the original $100 ticket cost.
Ethical Concerns Around Pricing
There are ethical implications around concert pricing that challenge the notion of music as art versus music as commerce.
Accessibility to Fans
Pricing out large segments of their listener base through high ticket costs limits access. Concerts become unavailable to lower income fans and skews the audience towards the wealthy elite. Making shows affordable for the average fan is seen as a moral imperative by some artists.
Fair Compensation for Artists
Inflated secondary market prices show there is unmet demand not being properly captured as artist revenue. The artist creates the intrinsic value through their music. Ethically capturing that value could mean adjusting primary market prices rather than ceding profits to scalpers.
Artists intend for their music to be enjoyed by all. Outrageous secondary market prices contradict the spirit of community and sharing in music. However, operating tours at a loss is not sustainable for professional artists who aim to make a living through their craft. Balancing affordability and profitability becomes an ethical tightrope.
Trust and Transparency
Unexpected fees, dodgy ticket brokers, hidden costs, and scalpers betray the trust between artists and fans. Transparency around ticketing practices and pricing helps keep the relationship honest and centered on the music.
In summary, artists have some degree of influence but far from complete control over the ticket prices their fans pay to see them perform live. Market factors, middlemen stakeholders, and the unregulated secondary market introduce pricing distortions that dilute artist control.
Determining true market value is further complicated by concerts being part merchandise and part art form. Non-financial motivations around building community and spreading joy through music also shape artists’ pricing ethics.
Transparent communication and innovative distribution models can help restore balance to the artist-fan pricing relationship. But the multifaceted nature of live entertainment prevents artists from unilaterally dictating final ticket costs. The tug-of-war between supply and demand, profits and accessibility, continues as technology evolves the concert business.