The price of a concert ticket is determined by a number of different factors and involves several key players in the live entertainment industry. At a high level, the artist, the promoter, and the venue all have input on ticket pricing, but the final price also depends on market factors like demand and competition.
The artist themselves often has a big influence on how much concert tickets will cost. Well-established acts with lots of popular songs and album sales have more leverage to charge higher prices. The artist’s management team will analyze past tour grosses, venues booked, and fan willingness to pay to determine an appropriate price range for tickets.
Superstar artists like Taylor Swift, U2, or the Rolling Stones can charge hundreds of dollars for the best seats and still sell out huge stadiums. Lesser known emerging acts have less ability to demand high ticket prices, so they often price tickets more modestly to attract fans.
While the artist has input, it is the concert promoter that usually sets the final ticket prices in consultation with the artist’s team. Promoters like LiveNation and AEG are multibillion dollar corporations that research market demand when pricing tours. The promoter assumes the financial risk of the event by covering artist fees, marketing costs, and venue expenses before seeing any revenue from ticket sales.
Since the promoter has invested so much upfront, they analyze comparable artists in the market to pick a pricing scale. A 10,000 seat arena concert for an artist with a #1 album might have dynamic pricing tiers from $50 lawn seats up to $500 front row seats. Promoters use ticketing software to adjust prices dynamically based on sales, sometimes raising or lowering prices in sections to optimize revenue.
The specific concert venue also has a role in determining ticket prices. A huge stadium show with 50,000+ capacity will have lower average ticket prices than an intimate theater with only 1,000 seats. The overhead costs involved with putting on the show also factor in. A concert at a prestigious venue like Madison Square Garden or the Hollywood Bowl will be priced higher than a show at a local civic center.
Venues earn revenue primarily from food and beverage sales, so they negotiate a fee from the promoter for renting the space. The promoter then factors their venue costs into the ticketing pricing plan so that the concert is profitable overall.
Basic market factors like supply, demand, and competition also affect concert ticket pricing. A tour for an artist with a brand new album that is getting strong radio play and streaming numbers will often see very high demand. The promoter will price tickets higher to capture that demand. Likewise, if a major artist announces a show in a more remote city that does not get a lot of big tours, prices will typically go up due to limited supply.
If two big artists are touring at the same time in the same market, they may strategically price tickets lower to compete for fans’ limited entertainment budgets. Promoters use pricing tiers so they can adjust pricing downward if needed to drive volume and fill seats if competition is strong.
Ticketing Fees and Services
The advertised ticket price is just one component of the final cost fans pay. Ticketing services like Ticketmaster add additional fees on top of the base price to cover their ticketing software and distribution costs. Service fees, facility charges, and order processing fees can add 15-25% to the base price.
Fans are sometimes frustrated to see $20+ in fees added to a $50 listed ticket price. These fees go to the ticketing company, not the artist or promoter. Secondary market resellers like StubHub often add even higher fees when they allow fans to resell tickets.
Changes on the Horizon?
The advent of dynamic pricing and secondary markets has made concert ticket pricing somewhat controversial in recent years. Some artists like Taylor Swift have pushed back by using “Verified Fan” ticket sales to combat scalpers buying up seats. Additionally, consumer groups have challenged anticompetitive practices between promoters, venues, and ticketing companies.
New technology like mobile tickets and digital wallets may disrupt the traditional pricing model. Formats like livestreamed concerts also give fans pricing options. Despite industry changes, the artist, promoter, and venue remain the core decision-makers determining baseline concert ticket prices now and in the foreseeable future.
In summary, concert ticket pricing is a joint decision between artists, promoters, and venues based on market factors of supply and demand. Established artists can use their clout to charge higher prices, aided by promoters leveraging data and ticketing software to optimize pricing tiers. Venues earn additional revenue from fees and concessions. While fans may feel frustrated by opaque pricing, the artist, promoter, and venue stakeholders aim to balance maximizing revenue with keeping shows accessible for core fans.