Ticketmaster is the largest primary ticket outlet in the U.S., but they do not actually set ticket prices. Ticket prices are set by the artist, team, or event organizer. However, Ticketmaster does add significant fees onto the base ticket price that can often make up a large percentage of the final ticket cost paid by consumers.
Who sets the base ticket price?
The base ticket price is set by the artist, team, promoter, or venue hosting the event. This is the starting price before any fees are added on. Some factors that determine base ticket pricing include:
- The popularity and demand for the event/performer
- The size and prestige of the venue
- The production costs involved
- Comparable pricing for similar acts/events
The event organizer takes all these factors into account when setting the initial ticket price. This starting price is provided to Ticketmaster when the tickets go on sale.
What fees and charges does Ticketmaster add?
While Ticketmaster does not set the initial ticket price, they do add on a variety of fees that can add significantly to the final cost. Ticketmaster’s fees include:
- Service fees – This can range from 10-25% of the base ticket price as Ticketmaster’s charge for providing ticketing services.
- Order processing fees – A flat per-ticket fee that covers the processing costs of the order.
- Facility fees – A fee determined by the venue to cover their operating costs.
- Convenience fees – Added for using Ticketmaster’s phone or online ticketing services vs. buying in person.
In some cases, these fees can add upwards of 30% or more to the initial ticket price, generating significant revenue for Ticketmaster.
Are Ticketmaster’s fees too high?
Ticketmaster’s fees are controversial and often criticized by consumers as being excessive. Some of the major complaints include:
- Fees are not transparent – The full fees are only revealed at the end of the ticket buying process.
- Captive audience – As the largest ticketing provider, many fans have little choice but to pay Ticketmaster’s fees if they want tickets.
- Processing fees seem excessive – Fees like order processing can be $10+ per ticket even though digital ticketing has gotten cheaper.
- Venues inflate facility fees – Venues can generate added revenue by raising facility fees since Ticketmaster takes the blame.
The lack of competition in the ticketing industry means venues, teams, and event organizers continue to work with Ticketmaster and pass high fees onto fans. The company generated over $1.6 billion in revenue from fees in 2021.
Does Ticketmaster benefit from high secondary market prices?
In addition to its primary ticket sales, Ticketmaster also owns one of the largest ticket resale exchanges, Ticketmaster Resale. On this secondary market, tickets often sell for well above face value.
While Ticketmaster does not directly set resale prices either, the company does benefit from high resale ticket prices in the following ways:
- They collect a percentage fee on every ticket resold through their exchange.
- High resale prices demonstrate high demand for events, encouraging more events to use Ticketmaster for their primary sales.
- They can use resale data to recommend higher initial ticket prices to teams, venues, and event organizers.
By owning both primary and secondary ticketing platforms, Ticketmaster generates revenue across the entire live event ecosystem.
Does dynamic pricing impact costs?
In recent years, Ticketmaster has begun using dynamic pricing on tickets for very high demand events. This means ticket prices can fluctuate over time based on projected demand. Fans see prices go up in real time as tickets sell.
While dynamic pricing is meant to reflect true market value, it has also led to situations where prices skyrocket to extremes due to frenzied demand. For example, Ticketmaster used dynamic pricing for Taylor Swift’s The Eras tour presales, with some ticket prices exceeding $3,000 each.
The upside for Ticketmaster is dynamic pricing allows the capture of maximum revenue during peak demand. The downside for fans is it can make popular event tickets prohibitively expensive.
Conclusion
In summary, while Ticketmaster does not directly set initial ticket prices, the company does add significant fees that can drive up the total ticket cost by 25-50%. As the dominant primary ticketing provider, Ticketmaster can charge high fees given the lack of consumer choice. The company also benefits indirectly from high ticket resale prices through their secondary exchange. Dynamic pricing further allows Ticketmaster to maximize profits, sometimes at the expense of ordinary fans. So while they don’t set the base price, Ticketmaster’s fees and policies have an enormous influence on the total amount fans pay.