Concert tickets have become increasingly expensive over the past few decades. From massive world tours of top pop stars to more intimate club shows by indie bands, fans are often shocked when they go to purchase tickets and see the high costs. This leads many to wonder – what is the average markup on concert tickets? How much profit are promoters and ticket sellers making off of live music events? Let’s take a closer look at the economics behind concert ticketing.
The Basics of Concert Ticket Pricing
When a concert is first announced, the artist and promoter will work together to set the initial face value ticket prices. This is based on a number of factors:
- The overall budget for the tour, including production costs like staging, lighting, sound equipment, transportation, and more.
- The size/capacity of the venues booked.
- The artist’s status and popularity. More established acts can command higher prices.
- Local market factors like average income and competition from other events.
The initial ticket price is often just the starting point though. As tickets go on sale, the laws of supply and demand take over. Hot shows will sell out quickly and tickets end up being resold on secondary markets for much higher prices. Promoters may also increase prices dynamically for seats that are in high demand.
So when we talk about markup, there are two components at play – the markup that is built into the initial face value price, and the additional markup that comes from the secondary market:
- Face value markup – The difference between the base cost of the event and the initial ticket prices set by the artist/promoter.
- Secondary market markup – The additional price increase when tickets are resold through 3rd party exchanges and brokers.
Factors That Drive Markups
Why have promoters and secondary sellers been able to mark up ticket prices so much in recent years? There are a few key factors at play:
Increased Touring Costs
Putting on large concert tours has become significantly more expensive. Production budgets now routinely run into the millions for top artists. They bring massive stages, custom video walls and lighting rigs, and pyrotechnics that give fans a true arena-style experience even in smaller venues. All this equipment requires more trucks to transport and crew members to operate. Artist rider costs like private jets, lavish hotel rooms, and catering have also gone up.
Higher Artist Guarantees
With touring becoming more lucrative, artists have been demanding higher guarantees from promoters to go on the road. Promoters bid against each other to lock down exclusivity with the top acts. To recoup these costs, they have to set ticket prices high enough to meet the guarantees after covering all the tour overhead expenses.
Limited Venue Capacities
Despite surging demand for concert tickets, seating capacities at most venues have remained static over time. The supply of tickets is limited, which enables markups. At larger arenas, promoters will typically sell seats in the rear sections and then gradually open more rows and sections as shows sell out to maximize their profits.
Advances in Dynamic Pricing
Sophisticated pricing software enables promoters to adjust ticket prices in real-time based on demand signals. Hot shows may see prices hiked while lukewarm events are discounted to fill more seats. Duplicate orders and early bot traffic provide insight on initial demand levels. Promoters can capture more profit by dynamically reducing discounts and increasing premiums.
Lack of Transparency in Ticketing Industry
Much of the ticketing industry still operates as a black box without transparency. Ticketmaster and AEG are the giants with outsized power. Artists, venues, and fans often have little visibility into ticketing practices like pre-sale holds, platinum tickets, or service fees. This allows promoters to obscure the true markup amounts.
Growth of the Secondary Market
Resale sites like StubHub have enabled a thriving secondary market with tickets sold for multiples above face value. Brokers use sophisticated software to buy up inventory and resell at huge profits. Some also speculate that promoters purposefully underprice tickets initially to drive buzz and rapid sell-outs, allowing more profit through secondary sales.
Average Ticket Markups by Genre
The total markup on concert tickets can vary substantially depending on the genre and the act. Here are some averages based on leading tours over the past several years:
| Genre | Average Ticket Markup % |
|---|---|
| Pop / Rock | 43% |
| Hip Hop / R&B | 62% |
| Country | 32% |
| EDM / Dance | 55% |
| Classic Rock | 36% |
| Heavy Metal | 29% |
| Indie | 18% |
A few things stand out from these numbers:
- Hip Hop and EDM shows have the highest markups on average, driven by the youth demographic’s willingness to pay higher prices for hot acts.
- Legacy classic rock acts command higher prices than newer indie bands, but lower than contemporary pop stars.
- Country and metal shows tend to have lower markups, as fans of those genres tend to be more price sensitive.
Within each genre there is also substantial variability depending on the act’s popularity. For example, platinum-selling pop stars like Taylor Swift or Adele can easily double or triple face value ticket prices in resale, while smaller acts may only see modest markups.
Factors Impacting an Artist’s Ability to Mark Up Tickets
Not all artists have equal power to markup ticket prices for their tours and concerts. A few key factors impact how much markup an act can command:
Career Trajectory
Newer acts trying to build a fanbase often have to keep prices affordable to drive attendance. Established mid-tier acts with a strong regional following can start testing higher price points. Top stars with an international fanbase can charge premium pricing globally.
Music Sales & Chart Success
Artists with hot albums and singles dominating the charts almost always see this momentum carry over to higher ticket demand. Fans want to see the hits performed live. Acts with lukewarm releases may struggle to sell tickets.
Social Media Followers
Having a huge social media fanbase is a key indicator of pricing power. Artists like Beyonce, Justin Bieber and Ariana Grande can charge more because of their 100+ million Instagram followers. Niche acts will have less flexibility even with a devoted fanbase.
Scarcity of Touring
When top artists tour rarely, demand grows between cycles. Acts like Adele, Rihanna, or Guns N’ Roses can markup tickets more after long breaks between tours. For artists on perpetual tours, pricing power diminishes over time.
Production Scale
Massive tours with huge stages, custom effects, and background dancers require high ticket prices just to break even. Intimate club tours or acoustic shows have lower overhead costs. This puts a ceiling on potential markup levels.
Impact of Dynamic Pricing on Markups
As mentioned earlier, variable or dynamic pricing has become pervasive in the concert business. Promoters now actively monitor demand metrics and adjust pricing continuously for remaining unsold tickets.
Some examples of how dynamic pricing drives markups higher:
- Prices for the best seats are increased when early sales are exceptionally strong.
- Sellouts at one show trigger system-wide price increases for remaining dates.
- Last minute discounts are reduced to maximize profit on late demand.
- Platinum tickets are added with 2-5x markup over base prices.
Savvy fans have learned to play the dynamic pricing game as well. Many wait to see if prices drop as show dates approach before buying. However, this can backfire if enough others have the same patience and promoters simply reduce discounts near the end.
Service and Processing Fees Drive Markups Higher
The advertised ticket price is almost never the true final price fans pay. On top of the marked up ticket face values, there are invariably an array of service fees and order processing charges added:
- Convenience fees per ticket (Ticketmaster, AXS, etc)
- Order processing fees per order
- Facility fees or venue premiums
- Taxes and government levies
These extra fees can add 25% or more to the final checkout cost. Some of the most egregious examples include:
- Ticketmaster charging fees as high as 50% of the base price.
- Facility fees that are simply another way to hide the real ticket markup.
- Processing fees on top of per ticket “convenience” fees.
Watch out for these costly add-ons that inflate the true markup even higher. Read all disclaimers carefully when purchasing tickets to avoid surprise fees.
Top Tips for Avoiding High Markups
Fans are not powerless in the battle against exorbitant concert ticket markups. Here are some tips for scoring deals:
Buy During Presales
Getting access to presales through fan clubs or credit card promotions is the best way to buy before markups occur. Sign up for artist fan clubs and follow tour announcements closely.
Avoid Resale Sites
Once tickets hit secondary markets, huge markups are common. Buying from the primary seller cuts out the possibility of resale hype inflation.
Compare Across Retailers
Some artists sell tickets across multiple retail platforms like Ticketmaster, AXS, and fan clubs. Compare final prices across sellers as fees vary.
Buy Early and Save Tickets
Prices tend to start lower and increase over time (dynamic pricing). Buy early even if saving tickets in your account to lock in lower prices.
Buy Floor or General Admission
The most in-demand reserved seats get marked up aggressively. Floor and GA typically have lower inflations.
Join Fan Clubs
Artist fan clubs provide access to limited allocation presales. These are hugely valuable for popular tours before sellouts.
The Future of Concert Ticket Pricing
Despite growing backlash from fans, markups on live event tickets are likely here to stay. As long as there is more demand than supply, promoters will continue to charge what the market can bear. Certain artists with immense loyalty and popularity will always be able to double or triple face value prices.
However, there are a few trends providing a glimmer of hope:
- Some artists like Taylor Swift and Bruce Springsteen are starting to push back against egregious fees and platinum tickets, demanding fairer pricing for fans.
- Upstarts like DICE are offering no-fee ticketing, putting pressure on the establishment players.
- Blockchain startups like Yellowheart are trying to take resales on-chain to reduce 100X inflation.
- Fans are getting organized through groups like the Fan Freedom Project to lobby for reform.
Markups may start trending downward if enough voices call for change. But for now, expect to keep paying big premiums for the hottest tours. The joy of seeing your favorite artists often makes the prices temporarily painless.
Conclusion
In conclusion, concert tickets carry hefty markups from initial pricing through resale that help drive up costs for fans. Top artists can double or triple face values, while fees and processing add 25% or more on top. By buying early through presales, joining fan clubs, and avoiding resale sites, you can try to score fair pricing before the frenzy hits. With markups averaging from 20-60% based on genre, concert economics will continue to be a hot debate between artists, promoters, and audiences looking for the perfect balance.
