Selling tickets to events can be a tricky business. Despite your best marketing efforts, sometimes not all the tickets for your event sell. This can happen for a variety of reasons – high ticket prices, weak promotions, too much competition, or even bad luck. If you are using Ticketmaster to sell tickets for your event, you may be wondering what happens if your tickets don’t sell out.
Tickets Remain for Sale Until Event Date
The first thing to understand is that with Ticketmaster, unsold tickets remain available for purchase right up until the day of the event. Ticketmaster will not close out your event and remove unsold tickets from sale unless you specifically request this. So even if sales are slower than you hoped in the weeks leading up to your event, there is still a possibility that tickets will sell at the last minute.
In most cases, it is best to leave unsold tickets open for sale as long as possible. You just never know when some last minute publicity or word-of-mouth might drive a flurry of ticket sales. Unless there is a specific reason you need to close out ticket sales early, it is usually best to leave open listing up on Ticketmaster until the day of the show.
You Still Owe the Face Value of Unsold Tickets
One important thing to understand is that even if not all tickets sell, you are still responsible for paying Ticketmaster the full face value price on any unsold tickets. Ticketmaster collects their fees and charges whether tickets are sold or not.
So if you have 500 tickets available at a face value of $50 each, you will owe Ticketmaster $25,000 (minus any seller fees and discounts) regardless of how many tickets actually sell. This means you take on the financial risk of unsold tickets. If only half your tickets sell, you still owe the full $25,000 to Ticketmaster. The only way to reduce your liability is to request that Ticketmaster close out sales earlier than the onsale date.
Ticketmaster Seller Fees
On top of the face value price per ticket, you also owe Ticketmaster their seller fees. This is usually a per-ticket service fee, typically around $2-$5 per ticket. There may also be a percentage commission collected on each ticket sold. Make sure you understand the full fee structure when listing tickets with Ticketmaster, as fees can really add up, especially if you are dealing with thousands of tickets.
Options for Unsold Tickets
Once it becomes clear that not all tickets for your event will sell, you have a few options:
Lower Prices
One option is to lower ticket prices, either across the board or on certain ticket categories and levels. Lower prices can sometimes spur sales for an event that is having trouble moving all its inventory. You will want to run any price changes by your Ticketmaster rep to make sure it is allowed within your existing seller agreement.
Giveaways and Comps
Another option is to give away unsold tickets to promotions, contests, or special groups. Getting some extra bodies in seats through comp tickets can help boost energy for the event. You can also sometimes trade tickets to media partners in exchange for additional publicity and promotion. Just make sure to coordinate any comps with Ticketmaster so the tickets are properly labeled as promotional giveaways.
Cancel and Refund Orders
As a last resort, you can request that Ticketmaster cancel and refund all remaining orders. This essentially closes out sales early and removes any remaining inventory from the system. Once this is done, no more tickets can be sold. You will still owe the face value of any tickets already sold, minus any refunds issued. But canceling remaining orders reduces your liability for unsold inventory. Just keep in mind there are usually no refunds or cancellations within 48 hours of an event.
Using Dynamic Pricing
One strategy to maximize sales and minimize unsold ticket liability is to use dynamic pricing on Ticketmaster. With dynamic pricing, ticket prices adjust over time according to demand:
- When demand is high, prices go up
- When demand is low, prices go down
As the event date approaches, Ticketmaster will automatically adjust prices based on sales momentum and other data points. This allows you to find the optimal market-clearing price for your event. Dynamic pricing helps sell more tickets and puts fewer seats at risk of going unsold. The tradeoff is that some fans may get frustrated if prices drop close to the event, after they already bought their tickets.
Enabling Dynamic Pricing
Dynamic pricing must be enabled when you first list the event with Ticketmaster. Discuss options with your Ticketmaster representative. You will need to allow Ticketmaster to adjust pricing within a set parameters and range. Ticketmaster handles all the pricing logic automatically based on their data algorithms – you just set the rules and limits upfront. With dynamic pricing, far fewer tickets are likely to go unsold.
Using Paperless Ticketing
Another ticketing option that can help sell more tickets is paperless ticketing through Ticketmaster. With paperless tickets, customers do not receive a printed ticket. Instead, the credit card they used to purchase tickets serves as their ticket into the event. Benefits of paperless ticketing include:
- Reduced risk of fake/copied tickets
- Easier to enforce ticket limits
- Less unused inventory from lost tickets
By utilizing paperless ticketing, venues essentially eliminate unused ticket inventory from lost or forgotten tickets. It also makes it harder for people to re-sell their tickets when paper tickets are not used. Both of these factors can help reduce unsold ticket liability and put more tickets directly in the hands of fans.
Enabling Paperless Tickets
Like dynamic pricing, paperless ticketing must be enabled when the event is first listed with Ticketmaster. You can choose to make some or all tickets paperless. Sections and ticket levels can be selectively configured for paperless entry. There may be some additional fees involved with using paperless ticketing, so discuss options fully with your Ticketmaster representative before enabling it.
Unsold Ticket Purchase Insurance
If you are very concerned about being stuck with high unsold ticket liability, many ticketing insurance policies are available. Often called event cancellation or non-appearance insurance, these policies will reimburse you for unsold ticket inventory in case of an event cancellation or low turnout. Policies are available to cover 100% of unsold ticket liability.
Keep in mind the premiums on these policies can be quite expensive. The level of coverage and policy costs are based on the assessed risk level of your event and its likelihood of cancellation/low attendance. Get quotes from multiple insurers before purchasing a policy. Policies must be in place well before the event occurs, often 60-90 days out at a minimum.
Claiming Reimbursement on Policies
If your event is canceled or turnout is low, you can file a claim with your insurance provider to receive reimbursement for unsold tickets. Make sure to document unsold inventory and lost revenue in detail. You will need to provide proof to the insurer backing up your claimed losses. This typically includes reports directly from the ticketing vendor (Ticketmaster) showing purchases and unsold tickets.
Reimbursement claims can take 4-8 weeks to process after filing the claim and providing documentation. Read your policy carefully to understand exactly what circumstances allow you to file a claim so there are no surprises later if you need to use the policy.
Other Ticketing Platform Options
While Ticketmaster is the biggest player, there are other ticketing platforms available as well. Many event venues have their own proprietary ticketing system they require promoters to use. But there are also other third-party ticketing vendors in the marketplace.
A few of the major Ticketmaster competitor platforms include:
- AXS
- Universe
- Eventbrite
- SeatGeek
- Etix
These all provide digital ticketing solutions with many similar features and options to Ticketmaster. Pricing and fee structures vary across platforms. Most competing platforms support features like dynamic pricing and paperless ticketing. Some newer platforms also offer more robust data analytics on ticket buyer demographics and behavior patterns.
If high unsold ticket liability is a major concern, it may be worth exploring some of these alternative vendors. Speak to their sales departments about options to minimize financial risks from unsold inventory. Just keep in mind you may lose some distribution reach by moving away from the Ticketmaster juggernaut.
Self-Ticketing Options
Rather than outsourcing to an external ticketing vendor, some event promoters choose to handle ticketing completely in-house. This is known as self-ticketing. Popular self-ticketing options include:
Custom Website Sales
Building your own website to handle ticket sales and distribution. This requires an investment in developing a custom platform for processing orders, generating barcodes, and controlling ticket distribution.
PDF Tickets
Selling tickets as PDF files that customers can print at home. The PDF ticket has a unique barcode for entry. All sales processing is handled independently.
Phone Orders
Taking all ticket orders over the phone. Tickets are then emailed or mailed based on the customer’s preference. No online sales are involved.
The major advantage of self-ticketing is avoiding all vendor fees, which can really improve the bottom line. However, you take on far more work and operations responsibility. There is also potential for lost sales without accessing the vendor’s marketing distribution channels. For very high-volume or high-risk events, most experts recommend outsourcing ticketing to an established third-party vendor.
Charity Ticket Donations
One unique option for offloading unsold ticket inventory is donating tickets to charity. Many non-profit organizations plan special outings for the populations they serve. Charity groups may be happy to take any unsold tickets off your hands.
All you need to do is connect with charities aligned with your event and offer them any inventory you have available free of charge. This allows you to recoup some goodwill for empty seats that would otherwise go to waste. Just make sure the charity groups properly commemorate your donation by recognizing your business.
Tax Deductions on Unsold Tickets
If you operate your event promotion business as a registered business entity, you may be able to take a tax deduction on unsold ticket inventory.
Any tickets you were not able to sell that were donated to charity may be deductible as a charitable contribution. Make sure to get proper receipts from the receiving organizations. These types of donations are capped based on your adjusted gross revenue, but can still provide some welcome tax relief.
You may also be able to deduct unsold tickets that went unused as a loss for your business. Talk to your tax professional about writing off unused ticket losses to help defray some of the financial blow.
Conclusion
Dealing with unsold ticket inventory is an unfortunate reality in the live events business. There are many options available to help minimize unused seats and lost revenue. Dynamic pricing, paperless ticketing, ticket insurance, and self-ticketing can all help reduce risk. If you do end up with empty seats, donating to charity or taking tax deductions can help soften the blow. While unsold tickets are never ideal, being prepared with contingencies can help you make the best out of an unwelcome situation.