Ticketmaster is the largest primary ticket outlet and ticket resale marketplace in the United States. As the dominant player in the ticketing industry, Ticketmaster has come under scrutiny for the fees it charges customers on ticket purchases and resales. One area that draws particular criticism is Ticketmaster’s practice of collecting fees on ticket resales through its Ticketmaster Resale (or TM+) platform.
What are Ticketmaster’s resale fees?
Tickets sold through Ticketmaster Resale are priced dynamically, with sellers setting the ticket price. On each resale ticket bought through Ticketmaster, the company collects:
– A percentage of the ticket price as a commission fee from the seller. This ranges from 10-20% of the ticket price.
– A “Service Fee” from the buyer that ranges from 10-25% of the ticket price.
So for any given resale ticket bought on Ticketmaster, the company takes around 20-45% of the entire ticket price in fees.
To illustrate, suppose a seller lists a ticket with a face value of $100 for resale on Ticketmaster at $200. Here’s a breakdown of the fees:
– Seller Service Fee: Ticketmaster charges the seller a 15% commission on the sale price ($200 * 15% = $30).
– Buyer Service Fee: Ticketmaster charges the buyer a 15% service fee on the sale price ($200 * 15% = $30).
In total, Ticketmaster made $60 on this $200 resale ticket, or 30% of the overall ticket price. The higher the resale ticket price, the more fees Ticketmaster collects.
How much does Ticketmaster make in resale fees?
In 2020, Ticketmaster reported $700 million in revenue from secondary market service fees. This refers to all the buyer and seller service fees from resale tickets bought on their platform.
$700 million was a 27% increase from the year before, when Ticketmaster took $550 million in resale service fees. For reference, Ticketmaster reported $10.3 billion in total fee revenue in 2020. So resale fees made up around 7% of their overall fees business.
Some key stats on Ticketmaster’s resale fees:
– In 2019, Ticketmaster collected $549 million in resale service fees. This grew to $700 million in 2020 (a 27% increase).
– Resale fees were 6% of Ticketmaster’s total fee revenue in 2019. In 2020 it was 7%.
– From 2018 to 2020, Ticketmaster’s resale revenue grew from $375 million to $700 million. Nearly doubling over 3 years.
The rapid growth shows that Ticketmaster’s resale business is booming. As the ticket resale market expands, Ticketmaster is collecting a bigger piece of the pie in fees.
Ticketmaster’s market position in ticket resales
Ticketmaster Resale is the largest ticket resale marketplace in the United States.
Some key facts about Ticketmaster’s dominance of the ticket resale market:
– Ticketmaster Resale handles over 120 million resale ticket transactions per year.
– Over 90% of high-profile event tickets are listed on Ticketmaster Resale.
– Ticketmaster has partnered with the NFL, NBA, NHL and other leagues and teams to be their official resale ticket marketplace.
– Ticketmaster uses technical measures like “ticket locks” to ensure all season ticket holders sell their unused tickets through Ticketmaster Resale. Teams get a royalty on each resale.
– Ticketmaster Resale offers over 48 million tickets for sale at any given time, across concerts, sports and theater events.
Thanks to its massive inventory and exclusive deals with major event organizations and teams, Ticketmaster Resale has a majority share of the secondary ticket market in the US.
This dominant position allows Ticketmaster to impose higher fees, generating hundreds of millions in revenue from buyers and sellers who have little alternative but to pay up.
Criticisms of Ticketmaster’s resale model
Ticketmaster faces backlash for the high fees it charges on ticket resales through its platform:
– Consumer rights groups argue Ticketmaster double dips by collecting fees from both the buyer and seller. They claim Ticketmaster provides minimal value to justify taking 20-45% in fees on each resale transaction.
– Some argue Ticketmaster undermines ticket price caps that teams/venues try to impose to make tickets affordable. It enables sellers to set huge markups on the secondary market.
– Critics claim Ticketmaster’s exclusive deals and technical locks limit options for buyers and sellers. They say Ticketmaster abuses its dominant market position.
– Class action lawsuits have accused Ticketmaster Resale of colluding with scalpers who scoop up tickets and resell them at inflated prices.
Despite the criticisms, Ticketmaster generates immense revenue from its secondary ticketing fees. And it continues to grow its resale marketplace’s share of the ticket aftermarket.
Does Ticketmaster have competitors in ticket resales?
While Ticketmaster has a commanding market share, it does face some smaller competitors in the ticket resale marketplace. Key players include:
– StubHub – Previously owned by eBay, now owned by VIAGOGO. StubHub is likely the second largest ticket resale marketplace after Ticketmaster. Offers broad ticket inventory.
– Vivid Seats – Major resale site known for its loyalty rewards program and buying tools. Has inventory across sports, concerts, theater, and other events.
– SeatGeek – Rising competitor focused on mobile-first ticket resales. Cleaner fee structure than Ticketmaster but less inventory.
– Gametime – Specializes in last-minute app-based ticket resales. No listings fees for sellers. Lower buyer fees.
– TicketNetwork – Resale marketplace with listings from many individual ticket brokers and resellers.
However, these secondary marketplaces still do a fraction of the volume that flows through Ticketmaster Resale. None have the breadth of team/league partnerships and exclusive ticket arrangements that Ticketmaster leverages to dominate market share.
Some event organizers like AEG also operate their own resale sites as an alternative to Ticketmaster Resale. But they have yet to make a major dent.
So while Ticketmaster faces competition, it still has a strong grip as the primary resale destination for tickets to top live events. Enabling it to generate hundreds of millions annually in fees from buyers and sellers.
How does Ticketmaster Resale compare to NFL Ticket Exchange?
The NFL Ticket Exchange is the official ticket resale marketplace of the National Football League. It was launched in 2008 as “The Official Fan-to-Fan Ticket Marketplace of the NFL.”
Here is how the NFL Ticket Exchange compares to Ticketmaster Resale:
– Inventory: Ticketmaster has 5-10x more NFL regular season and playoff tickets listed than NFL Ticket Exchange. Ticketmaster is the exclusive secondary ticket partner for 28 of the 32 NFL teams.
– Buyer fees: NFL Ticket Exchange charges 15% fees on ticket purchases. Ticketmaster charges 10-25% in fees.
– Seller fees: NFL Ticket Exchange charges a 15% seller commission. Ticketmaster charges a 10-20% seller commission.
– Pricing: Ticketmaster offers demand-based dynamic pricing. NFL Ticket Exchange sellers set a fixed price.
– Volume: Ticketmaster handles over 5 million NFL ticket resales per year. NFL Ticket Exchange does a fraction of that volume.
– Mobile experience: Ticketmaster has dedicated mobile apps. NFL Ticket Exchange must be accessed via a mobile browser.
While NFL Ticket Exchange is the official NFL resale site, Ticketmaster maintains a dominant position as the platform where most NFL tickets are resold each year. Its broader team partnerships and sophisticated marketplace features give it an edge over the simpler NFL Ticket Exchange.
Conclusion
Ticketmaster Resale is a major source of revenue for the company, generating over $700 million in fees annually. As the largest ticket resale marketplace, Ticketmaster leverages its market position to charge sellers fees of 10-20% and buyers fees of 10-25% on each resale transaction. This earns them roughly 20-45% of every resale ticket’s final price.
Despite facing some criticism for high fees and restrictive terms, Ticketmaster’s dominance of primary ticketing allows them to maintain their leadership of the resale market as well. While competitors like StubHub exist, none come close to Ticketmaster’s inventory breadth, event partnerships, and resale volume. The resale fees Ticketmaster earns demonstrate the power of its platform to connect live event buyers and sellers.