Ticketmaster, the largest ticket sales and distribution company in the United States, has come under scrutiny recently for their pricing and fees associated with ticket sales for Taylor Swift’s new Eras tour. As one of the most popular artists in the world right now, Taylor Swift tickets are in extremely high demand, which has led to sky-high prices on the resale market. This has prompted questions around just how much money Ticketmaster is bringing in from organic ticket sales and associated fees for a tour of this magnitude.
How Ticketmaster Makes Money
As an event ticketing service, Ticketmaster earns money in a few key ways:
- Service fees charged to ticket buyers
- Revenue share with the event organizer (in this case, Taylor Swift’s tour promoters)
- Revenue from operating ticketing platforms/services for venues
- Revenue from ticket resale services
For high-profile events like Taylor Swift’s Eras tour, Ticketmaster is able to charge higher service fees compared to more standard events. Service fees can range from 10% to up to 25% of the base ticket price. Ticketmaster also has deals with many venues, promoters and sports leagues to be an official ticketing partner, providing the digital ticket sales infrastructure in exchange for a percentage of revenue.
Key Stats on Taylor Swift’s Eras Tour
- 52 concerts announced globally
- 35 concerts in the United States
- Over 1.4 million tickets sold in presales
- Largest stadiums in each city hosting concerts (80,000+ capacity)
- $49 to $449 per ticket face value price range
With 1.4 million tickets already sold and more to be sold closer to the concert dates, this gives us a sense of the scale for the tour. Next we’ll look at estimated revenue calculations.
Estimating Ticketmaster’s Revenue from Taylor Swift’s Tour
It’s impossible to know exactly how much Ticketmaster will earn from the Eras tour without insider financial information, but we can develop reasonable estimates based on typical deals and publicly available information.
Estimate #1: Service Fee Revenue
- 1.4 million tickets sold at average of $250 per ticket = $350 million in gross ticket sales
- Average Ticketmaster service fee is 15% of ticket price
- Estimated service fee revenue = 15% of $350 million = $52.5 million
At a 15% average service fee, Ticketmaster would stand to make around $52.5 million on service fees alone based on the number of presales. This number could grow further as more tickets sell.
Estimate #2: Venue/Promoter Revenue Share
- Average revenue share = 5% of gross ticket sales
- Gross ticket sales = $350 million
- 5% of $350 million = $17.5 million
While individual deals vary greatly, a typical range for revenue share on gross ticket sales is 5-10%. If we assume the lower end at 5%, that’s an estimated $17.5 million for Ticketmaster.
Estimate #3: Resale Revenue
As the operators of one of the largest ticket resale platforms, Ticketmaster also makes money by re-selling tickets. Exact numbers are difficult to pin down, but we can make an educated guess:
- An estimated 10% of tickets are resold per tour on average
- Taylor Swift tour = 1.4 million tickets sold, 140,000 resold estimate
- Average resale price is 150% of face value, or $375
- Total resale market = 140,000 x $375 = $52.5 million
- Ticketmaster revenue = 15% of resale total = $7.875 million estimate
By taking a percentage of the resale market, Ticketmaster could earn an additional ~$8 million from Swift’s tour.
Total Estimate: $77.87 million
Based on our estimates, Ticketmaster could generate around $77.87 million or more from Taylor Swift’s The Eras Tour:
Keep in mind these numbers are estimates based on publicly available information, but provide a sense of Ticketmaster’s potential tour revenue. The actual total could be higher or lower based on the specific deals in place.
How Ticketmaster Responds to Criticism
Ticketmaster has received heavy criticism from Taylor Swift fans and the general public in recent months over the high ticket costs. Here are some of the explanations and responses they have provided:
Dynamic Pricing Model
Ticketmaster says it utilizes dynamic pricing, where ticket prices fluctuate based on demand in order to maximize revenue potential. Popular shows that sell out quickly call for prices to increase. This allows Ticketmaster to capture optimal revenue for the most in-demand events.
Fees Cover Costs
Ticketmaster claims that service fees cover its operating costs and have remained consistent over the years. Fees include the cost of running ticketing software, servers, customer support and other overhead required to handle massive fan demand.
Promoters Set Prices
Ticketmaster also states that event promoters and venues set the base ticket prices, not Ticketmaster itself. The company charges service fees on top of those prices. So for premium artists like Taylor Swift, promoters start the prices higher based on expected demand.
Focus On Combating Bots and Fraud
The company claims the bigger problem is the use of ticket bots and fraud to buy up tickets before real fans get access. Ticketmaster says it has invested heavily in ways to combat bots and fraudulent sales.
By all estimates, Ticketmaster stands to generate tens of millions in revenue from Taylor Swift’s record-breaking Eras tour from service fees, venue deals and the secondary market. Despite outrage from fans over sky-high costs, Ticketmaster defends its pricing and fees as being necessary to support the infrastructure required for in-demand artists at massive venues. While calls for more transparency and lower costs will likely continue, the company remains the primary ticketing outlet for major concerts and events.
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