Ticket prices on Ticketmaster are set by the party that owns the tickets, which is usually the artist, team, or venue. Ticketmaster acts as an intermediary between the ticket owner and the customer. While Ticketmaster facilitates the sale and sets the fees charged to customers, they do not actually set the base ticket price.
How does Ticketmaster set their fees and charges?
Ticketmaster sets their own service fees and charges on top of the base ticket price. These fees help Ticketmaster cover the costs of operating their platform and services. Some common Ticketmaster fees include:
- Convenience fees – Charged for the ease of purchasing tickets online or over the phone
- Order processing fees – For the processing of ticket orders
- Delivery fees – For delivery of printed tickets to customers
- Facility fees – Costs associated with the venue/event
The exact amounts of these fees can vary based on the event, ticket value, and delivery method. Ticketmaster has faced scrutiny in the past for exceptionally high fees in some cases.
What factors impact the base ticket price set by sellers?
Some key factors that influence the base ticket price include:
- Demand – More popular artists, teams, and events command higher ticket prices due to high demand.
- Venue Size – Larger venues typically have higher ticket prices.
- Production Costs – Bigger shows require more expensive production.
- Location – Prices are adjusted based on the city/market.
- Day and Time – Weekend and evening events often cost more.
Sellers will typically price tickets as high as the market will bear based on these factors to maximize revenue. Pre-sales and tiered pricing levels are some pricing tactics used.
How does dynamic pricing impact costs?
Many Ticketmaster sellers now utilize dynamic pricing, which means ticket prices can fluctuate over time based on demand. As an event gains popularity or inventory decreases, dynamic pricing enables sellers to raise prices to take advantage of higher demand.
This can lead to situations where customers buying tickets late end up paying much higher prices than early-bird purchasers. Dynamic pricing helps maximize seller revenue but can anger some customers who feel it is unfair.
What percentage/fees does Ticketmaster take from each ticket sale?
Ticketmaster does not disclose the exact fees or percentages they collect, but estimates typically range from 10-20% of the base ticket price. Some key points:
- Fees are negotiated independently with each venue and event owner.
- Higher profile events likely pay lower percentages (closer to 10%).
- Smaller venues likely pay higher percentages (up to 20%).
- In many cases, Ticketmaster may collect between $5-$20 per ticket sold.
In addition to percentages, venues pay Ticketmaster setup fees to have their ticketing services installed. Ticketmaster is quite profitable, generating over $10 billion in revenue in 2021.
Does Ticketmaster receive a percentage of secondary resales?
Yes, Ticketmaster also collects fees when tickets are resold through their ticket exchange platform. Sellers are charged a fee for listing their tickets, and buyers pay an additional 10% of the resale price.
Why are Ticketmaster fees so high when buying tickets?
There are several reasons why Ticketmaster’s fees are generally very high when customers purchase tickets:
- Operation costs – The platform handles billions of ticket transactions yearly. High technology and staffing costs.
- Partner payouts – Ticketmaster must pay out venues, teams, etc. for their ticket inventory.
- Captured audience – As one of the largest ticketing companies, they have leverage to charge higher fees.
- Dynamic pricing – Fees can increase along with ticket demand due to dynamic pricing models.
- Processing fees – Charges like payment processing fees get passed directly to the consumer.
- No competition – Lack of consumer choice due to exclusive ticketing deals limits downward fee pressure.
While customers are often annoyed by the high fees, Ticketmaster remains profitable and continues to operate this way. Some artists like Bruce Springsteen have publicly criticized their fee structure.
What is Ticketmaster’s justification for their high fees?
Ticketmaster argues their fees are justified for the following reasons:
- Anti-botting technology – Prevents bots from unfairly monopolizing tickets.
- Sales platform – Provides a massive platform for ticket sales online, phone, box office.
- TicketExchance – Provides a safe, guaranteed resale marketplace.
- Fan support – Customer service for ticket issues and questions.
- Marketing – Promotion of events helps drive more ticket sales.
They position their fees as providing valuable services to both venues and fans. However, many feel their dominant position allows them to overcharge.
Does Ticketmaster have competitors? Who are they?
Yes, Ticketmaster does have some major competitors in the event ticketing industry:
| Competitor | Description |
|---|---|
| AXS | Owned by AEG, one of the largest event promoters. Significant market share. |
| Universe | Touts no add-on fees. Part of Ticketmaster antitrust settlement. |
| SeatGeek | Ticket search engine that offers primary ticket sales. |
| Eventbrite | Specializes in smaller music, community, and hobbyist events. |
| eTix | Provides ticketing services for sports teams and venues. |
However, Ticketmaster maintains around 70% market share of primary event ticketing due to their longstanding dominance in the industry.
How does Ticketmaster maintain their competitive position?
Ticketmaster uses some key strategies to maintain their leading industry position:
- Exclusive deals – Long-term exclusive deals with major venues and promoters to be their ticketing provider.
- Vertical integration – Owning secondary resale market like TicketExchange lets them profit from resales.
- Consumer inertia – Many customers default to Ticketmaster out of habit.
- Delivered audiences – Massive existing customer and email lists provide ready event audiences.
- Brand recognition – High brand awareness makes them the default ticketing option.
Their market position also creates major barriers to entry for competitors. However, their tactics have led to anti-trust scrutiny over the years.
Conclusion
In summary, Ticketmaster does not directly set ticket prices for events. The event owner determines base ticket costs based on factors like demand, venue, and production costs. As the dominant primary ticketing provider, Ticketmaster then charges service fees on top of the base price.
While these fees can be very high, Ticketmaster maintains the fees help cover their operating costs and services like anti-botting technology. Their position as an entrenched industry giant leaves consumers with little option but to pay the fees if they want tickets.
Some competitors are trying to break into the market by offering lower fees. However, Ticketmaster’s exclusive deals, vertical integration, and brand recognition provide them a durable competitive advantage in the ticketing industry.
