Ticketmaster is a dominant player in the event ticketing industry. The company sells tickets on behalf of event organizers through its website and mobile apps. Ticketmaster charges fees to ticket buyers on top of the base ticket price set by event organizers. These fees often add more than 25% to the base ticket price. Many consumers complain that Ticketmaster’s fees are too high. So how can Ticketmaster get away with charging so much in fees? There are several key factors that enable Ticketmaster’s high fees:
Ticketmaster Has a Near Monopoly in Primary Ticket Sales
Ticketmaster sells primary tickets, which are the original batch of tickets sold when an event first goes on sale. The company has contracts with most major entertainment venues and promoters to be their exclusive primary ticket seller. This means if you want to buy primary tickets to an event at major venues like Madison Square Garden or concerts promoted by Live Nation, you have to go through Ticketmaster.
According to a Billboard analysis, Ticketmaster sells primary tickets for over 70% of major concerts in the US. This lack of competition enables Ticketmaster to charge higher fees. Consumers seeking primary tickets for popular events like NBA games or Billie Eilish concerts have no alternative but to pay Ticketmaster’s fees.
Convenience and Integration Benefits
While alternatives exist in secondary ticket markets like StubHub, most consumers prefer the convenience and integration benefits of buying primary tickets directly from venues and promoters. Ticketmaster provides a one-stop shop to see what events are upcoming, choose seats, and immediately get official primary tickets.
Ticketmaster also provides benefits like integrated ticket transfer and resell options. As the exclusive primary ticket seller, Ticketmaster can charge higher convenience fees for these benefits.
Captive Audiences
Ticket buyers are a captive audience. Consumers develop an emotional attachment to seeing their favorite sports team or music artist live. This attachment reduces price sensitivity and willingness to search for alternatives. Fans want to ensure they get tickets, so they will pay the fees Ticketmaster charges.
The company leverages this captive audience behavior to charge high fees. Even a 25% fee is acceptable to many consumers if it means securing a ticket to an event they are dying to see live.
Ticketmaster’s Fees and Charges
Just how much are Ticketmaster’s fees? The company charges a range of different fees that quickly add up:
Convenience Charges
This is Ticketmaster’s primary fee to cover the costs of selling tickets online and processing orders. Convenience charge percentages vary by event but are often around 25% of the base ticket price.
Order Processing Fees
This fixed per-ticket fee covers the costs of processing each ticket order. It is typically $5-$15 per ticket.
Facility Charges
This fixed fee goes to the venue hosting the event to cover facility costs. The amount varies by venue but is often $3-$20 per ticket.
Service Fees
This vague fee allows Ticketmaster to tack on even more charges. It is usually around 10% of the convenience charge.
Delivery Fees
If you choose print-at-home tickets, Ticketmaster charges a delivery fee of around $2-$5 per ticket. Will call pickup also sometimes incurs a delivery fee.
| Fee Type | Amount |
|---|---|
| Convenience Charge | 25% of ticket price |
| Order Processing Fee | $10 per ticket |
| Facility Charge | $5 per ticket |
| Service Fee | 10% of convenience charge |
| Delivery Fee | $3 per ticket |
These fees can easily tack on an extra $25 or more onto a $100 base ticket price.
How Ticketmaster Justifies High Fees
Ticketmaster defends its high fees by claiming they provide important benefits:
Funding Ticket Sales Infrastructure
Ticketmaster claims fees fund its investments in primary ticket sales infrastructure and technology. The company spends over $1 billion annually improving its website, apps, data analytics, and ticket tracking systems. These deliver a convenient buying experience.
High fees allow Ticketmaster to recoup these infrastructure investments. Without high fees, the company claims it couldn’t afford to maintain its systems.
Anti-Botting Technology
Bots are computer programs that scalpers use to buy up thousands of tickets before fans can buy them. Ticketmaster uses anti-botting technology like CAPTCHA to reduce automated purchases.
They claim fees help fund advances in bot detection that make more tickets available to real fans. Ticketmaster has blocked billions of bot ticket requests.
Providing Customer Support
Ticketmaster also cites the costs of customer service as justification for high fees. The company handles over 320 million customer inquiries per year globally. Fees help fund 24/7 phone, chat, and email support.
Event Marketing & Promotion
As the exclusive ticket retailer for many events, Ticketmaster also claims that their technology and services help market events and promote ticket sales. Their fees help recoup the costs of advertising and promoting thousands of events each year.
Criticisms of Ticketmaster’s High Fees
While Ticketmaster defends its fees, many critics argue they are unjustified and harmful to consumers:
Fees Far Exceed Service Costs
Critics point out that Ticketmaster’s convenience and processing fees often exceed the actual costs of providing services. The company generates hundreds of millions in profit annually from fees. This suggests fees are inflated beyond what is necessary to fund operations.
Lack of Fee Transparency
Ticketmaster is also criticized for a lack of transparency around the specifics of its fees. The company does not provide itemized breakdowns of what each fee covers. This makes it difficult for consumers to assess if they are being charged a fair price.
Capturing Value from Artists and Venues
Some argue Ticketmaster’s fees extract value that should go to artists and venues. Lower fees would allow more revenue to be shared with event organizers rather than captured by Ticketmaster.
No Viable Alternatives
Critics say the lack of competitor options makes it difficult for consumers to avoid Ticketmaster’s high fees, even if they are perceived as unfair. Fans have little choice but to pay the fees if they want primary tickets.
Hurts Affordability of Events
Consumer advocates say Ticketmaster’s fees make attending events less affordable by adding up to 25% to the ticket price. This prices some fans out of seeing their favorite artists or teams.
Attempts to Regulate Ticketing Fees
There have been some attempts to regulate Ticketmaster’s fees over the years:
Class Action Lawsuits
Ticketmaster has faced several class action lawsuits alleging they engage in deceptive pricing practices by obscuring the full costs with excessive fees. However, these lawsuits typically settle out of court for small amounts relative to Ticketmaster’s profits.
New York’s BOTS Act
New York passed a law in 2016 banning Ticketmaster and other resellers from charging fees higher than the face value of tickets. However, Ticketmaster sued to block the law, saying it would “cripple” their business.
Federal BOSS Act
The Better Oversight of Secondary Sales and Accountability in Concert Ticketing (BOSS) Act was introduced in 2009. It would have required fee disclosures and capped processing fees at $25 per ticket. The bill never made it out of committee.
UK Fan Fair Alliance
In the UK, the Fan Fair Alliance advocacy group has persuaded many music artists to partner with ticket sellers that offer fairer fees. This consumer pressure has led to some shifts in the UK market.
However, legislative and legal efforts to regulate fees in the US have seen little success so far. Ticketmaster’s dominant size and aggressive legal strategy has helped the company avoid significant policy changes.
Will Ticketmaster’s Fees Decline? Unlikely Soon.
Despite complaints over fees, Ticketmaster is unlikely to proactively reduce them any time soon for several reasons:
Maximizing Profits
High transaction fees are extremely profitable for Ticketmaster. Regulation appears unlikely, so Ticketmaster will continue maximizing profits by charging high fees.
Dominant Market Position
As the dominant primary ticket seller, Ticketmaster does not face competitive pressures to lower fees to attract consumers. The company’s exclusive contracts with venues and promoters reinforce this market power.
High Consumer Demand
Consumers have shown they will pay Ticketmaster’s high fees for primary tickets to top events. As long as demand stays high, the company has little incentive to cut fees.
Sunken Investments
Ticketmaster has spent heavily on ticketing infrastructure it needs to recoup through fees. Dramatically cutting fees would threaten their ability to recover these sunk technology investments.
What Could Force Lower Fees?
While unlikely in the near future, a few potential developments could eventually pressure Ticketmaster to reevaluate its fees:
New Competitors
Emergence of major new primary ticket sellers could provide consumers alternative options and force Ticketmaster to compete more on fees. However, competitors face high barriers breaking Ticketmaster’s lock-in.
Fan Revolt
A large-scale fan revolt could pressure venues, promoters, and artists to break ties with Ticketmaster if they perceive fees as unfair. Social media could help spark and organize such a revolt.
Regulation Cracking Down on Fees
Though past attempts faltered, renewed and more aggressive regulatory action mandating fee caps or transparency could potentially alter the market.
Technology Disruption
A disruptive technology offering significant cost savings in ticketing infrastructure could potentially enable a competitor to undercut Ticketmaster’s fees.
Adaptation Needed by Consumers
Until competitive or regulatory developments emerge, consumers frustrated by Ticketmaster’s fees have little choice but to adapt:
– Budget extra for fees when buying tickets, so the total cost does not come as a surprise.
– Compare fees across events to identify lower-fee options. Fees vary, so some events will cost less.
– Join fan clubs, which sometimes offer pre-sales with lower or no fees.
– Buy group tickets, which can have smaller fees per person when divided across more tickets.
– Buy secondary market tickets, which, despite risks, can sometimes have lower all-in costs.
– Avoid print-at-home and delivery, which incur extra fees. Use mobile tickets instead.
– Write to lawmakers supporting live event fee regulation. Even if unlikely to pass soon, it builds pressure.
Conclusion
Ticketmaster’s dominant market position enables the company to charge exceptionally high fees that often add 25% or more to the base price of tickets. These fees provide massive profits for Ticketmaster while drawing consumer complaints. However, Ticketmaster defends the fees as necessary to fund its ticketing infrastructure, technology investments, and fan support. Attempts to legally regulate the company’s fees have found little success so far. Without meaningful competitive or regulatory pressure, Ticketmaster has little incentive to proactively reduce fees. Consumers frustrated by the fees have little choice but to budget for them or seek limited workarounds for now. Despite outcry over fees, Ticketmaster’s entrenched position in the primary ticket sales market appears secure for the foreseeable future.
