Ticketmaster is the dominant ticketing service for major concerts and events in the United States and beyond. However, Ticketmaster is also notorious for tacking on high service fees and other charges to every ticket purchase that significantly inflate costs for consumers. These fees have long drawn the ire of customers, leading many to wonder – why does Ticketmaster charge such high fees in the first place?
There are a few key factors that contribute to Ticketmaster’s high fees:
Market Dominance
As the primary ticketing provider for most major venues and artists, Ticketmaster essentially holds a monopoly in the ticketing industry. According to a Billboard analysis, Ticketmaster sells primary tickets for more than 80 of the top 100 arenas in the country and works with major promotion companies like Live Nation and AEG to sell tickets for the vast majority of major tours and concerts.
This lack of competition gives Ticketmaster little incentive to keep fees low. Since they are the only official ticketing option for most big events, customers have no choice but to pay Ticketmaster’s fees if they want legitimate tickets.
High Operating Costs
In addition to market power, Ticketmaster also justifies its fees by pointing to the high costs of running its ticketing infrastructure. As one of the largest primary ticket outlets in the world, Ticketmaster handles incredibly high demand, traffic and ticket volume for the most in-demand events.
To handle this demand and offer features like interactive seat maps and fast online ticket processing, Ticketmaster invests heavily in technology and incurs high operating expenses. Their fees help fund these investments and costs of doing business.
Venue and Promoter Revenue Shares
Ticketmaster is more than just a ticket retailer – they are a technology and services provider for venues and event promoters. As such, a portion of Ticketmaster’s fees go back to the promoters, venues, sports teams and organizers of the events you are purchasing tickets for.
Venue fees, promoter fees, royalty charges and more are deducted from each ticket purchase as part of Ticketmaster’s revenue sharing agreements. These hidden costs are part of what inflates the fees consumers pay.
Breakdown of Ticketmaster Fees
Just how much do all these fees add up to? An analysis of a sample Ticketmaster transaction helps break down exactly what customers are paying:
| Fee Type | Fee Amount |
|---|---|
| Ticket Price (base price set by venue/performer) | $50.00 |
| Service Fee (Ticketmaster’s processing fee) | $12.75 |
| Order Processing Fee (per ticket fee) | $5.95 |
| Delivery Fee (electronic ticket delivery) | $2.50 |
| Total Fees | $21.20 |
| Total Ticket Cost | $71.20 |
As you can see, the various Ticketmaster fees can add over 40% to the base ticket price. For hot shows where tickets already start at $100 or more, these fees can tack on $30-$40 per ticket – or more.
Fee Breakdown
Looking closer at each fee:
– Service Fee – This is Ticketmaster’s main processing fee, covering their technology and operating costs. It is typically 15-20% of the base ticket price.
– Order Processing Fee – This fixed per-ticket fee covers the cost of processing each ticket order.
– Delivery Fee – The fee for electronic ticket delivery via email or mobile device. Print-at-home ticket delivery carries an additional fee.
Other fees like facility fees, service charges, etc. can also appear and are revenue shares going back to venues and promoters.
Is Ticketmaster Running Afoul of Anti-Trust Laws?
The sheer amount and opacity of Ticketmaster’s fees raises concerns that they are abusing their market position at the expense of consumers. Under US anti-trust laws, it is illegal for dominant companies to use their market power to engage in abusive practices. In theory, Ticketmaster could face antitrust action forcing them to reduce fees.
In recent years, Ticketmaster has faced multiple lawsuits over its fees. A 2018 class action lawsuit alleged the company conspired with promoters like LiveNation to “establish minimum price floors” on ticket resale prices. However, Ticketmaster has managed to get most of these suits dismissed or dropped.
Proving definitively that Ticketmaster’s fees violate antitrust statutes is challenging. Ticketmaster can reasonably claim:
– Its fees are justified by real technology/operational costs
– Fees are clearly disclosed (even if complex and confusing)
– Fees help subsidize access to tickets for lower-income fans
– They lack monopoly power since venues/promoters choose Ticktemaster willingly
Despite outrage over fees, Ticketmaster has avoided major legal or regulatory action. Consumers frustrated by fees often have little choice but to pay up or not attend events.
Could Fees and Prices Be Lower?
Given their position of power and lack of serious competition, Ticketmaster has little incentive to lower or simplify fees unless forced to by legal action or consumer pressure. However, analysts argue that Ticketmaster could make some changes to improve transparency and cost-efficiency for consumers:
– Simplify fees – Consolidate the myriad fees into a single, straight-forward “service fee” clearly linked to operating costs.
– Cap fees – Institute a cap that fees cannot exceed a certain percentage (say 25%) of the base ticket price.
– Cut avoidable fees – Eliminate tacked-on fees like print-at-home delivery charges that add cost with little benefit.
– Increase base price transparency – Display the event/venue’s base ticket price more prominently, separate from Ticketmaster’s fees.
– Add tiers – Provide a basic ticketing option with lower fees for cost-conscious fans willing to forgo some convenience services.
– Open up ticketing – Advocate that venues/promoters also sell a portion of tickets directly or via alternative ticketing companies to increase competition.
However, Ticketmaster currently has little incentive to take any actions that could reduce its strong revenues from fees. Without external pressure, major changes seem unlikely.
What Can Consumers Do?
Given Ticketmaster’s entrenched position in ticketing, options are limited for consumers looking to avoid high fees:
– **Avoid resale** – Fees are typically highest when buying tickets secondhand. Use official Ticketmaster sales when possible.
– **Buy direct** – For some smaller events, venues sell directly without Ticketmaster. This can offer significant savings.
– **Go mobile** – Many mobile tickets have lower delivery fees than print tickets. Also buying mobile (not print) avoids extra fees.
– **Beware pre-sales** – Pre-sales promoted by fan clubs and sponsors can come with higher processing fees.
– **Use seat selection strategically** – Fees are higher for more coveted seat selections closer to stage. Less desirable seats in the back have lower fees.
– **Buy season tickets or bundles** – Per-ticket fees are lower when bundling multiple tickets into packages.
– **Compare with competitors** – If an event is available on multiple ticketing sites, check if others have lower fees.
Unfortunately, these tricks only provide modest savings at best. The most impactful solution would be increased government regulation forcing Ticketmaster to constrain its fees. But until then, consumers will remain subject to some of the highest transaction fees found for any consumer service.
Conclusion
Ticketmaster’s service and order processing fees consistently account for 25-40% of total ticket prices due to the company’s market dominance, operating expenses, and revenue sharing deals. With little competition in event ticketing, consumers have limited ability to avoid these pernicious fees outside of not attending events.
While critics claim Ticketmaster’s fees are unreasonable and abusive, the company has avoided major legal actions under anti-trust laws. Market power grants Ticketmaster leeway to charge high fees to underwrite its substantial technology investments and share revenues with partners.
Despite outrage, Ticketmaster seems unlikely to voluntarily lower or restrain fees given the profits they generate. It will likely require external pressure – whether from consumers, artists, venues or regulators – to force material changes in Ticketmaster’s pricing model and make events more affordable. Until then, high fees are the price fans pay for seeing their favorite live entertainment and sporting events.
