Ticketmaster is the largest ticket sales and distribution company in the United States. Founded in 1976, it sells tickets for concert, sports, and theater events on behalf of event organizers. Ticketmaster has a virtual monopoly on major event ticketing. According to a 2020 Government Accountability Office report, Ticketmaster sells 80-90% of primary event tickets in the US.
Despite its dominance in the industry, Ticketmaster is notorious for its high service and convenience fees that drastically increase the final cost of tickets. These fees have made Ticketmaster one of the most hated companies in America. A Consumer Reports survey found that 81% of Americans want more competition in the ticketing industry.
So why does Ticketmaster tack on so many additional fees to ticket prices? Ticketmaster defends its fees as normal business practices that allow it to provide the best service. However, critics argue the fees are exorbitant and point to the company’s monopoly power as the true reason it can charge so much.
The Types of Fees Ticketmaster Charges
Ticketmaster users are confronted with a myriad of fees every time they purchase tickets. Here are some of the most common fees and what Ticketmaster claims they are for:
Service Fees – This fee is extracted on every ticket sold and is Ticketmaster’s main source of profit. Ticketmaster claims service fees cover the costs of providing ticket sales infrastructure and services to clients.
Order Processing Fees – This fee covers the cost of processing orders across Ticketmaster sales channels.
Shipping Fees – For tangible tickets shipped to customers. Covers courier services.
Facility Fees – These location-specific fees imposed by concert venues help those venues cover overhead costs.
Convenience Fees – Added to tickets bought online and by phone. For providing the convenience of those purchase methods.
Taxes and Surcharges – These can include municipal venue taxes, federal taxes, sales tax, etc.
Other fees with murkier purposes may pop up as well, along with “Official Platinum” tickets that are dynamically priced higher based on demand.
How Much Do These Fees Add to Ticket Prices?
Ticketmaster claims its average fees per ticket are only around 25% of the ticket’s face value. However, many fans report total final checkout costs 50-100% higher than the initial advertised ticket price.
For example, a $100 ticket could easily incur a $25 service fee, a $7.50 order processing fee, a $15 convenience fee for online ordering, and $10 in other taxes and surcharges. That’s $57.50 in fees, making the total cost $157.50.
High demand events and concerts are especially prone to having astronomical fees. Some Harry Styles concert tickets originally listed for $500 ended up costing over $1000 at checkout from various platinum level and service fees. Fans only see the full costs at the very end when they are already invested in purchasing.
Breakdown of Sample $100 Ticket Fees
| Fee Type | Fee Amount |
|---|---|
| Advertised Ticket Price | $100 |
| Service Fee | $25 |
| Order Processing Fee | $7.50 |
| Convenience Fee | $15 |
| Taxes and Surcharges | $10 |
| Total Fees | $57.50 |
| Final Cost | $157.50 |
This table breaks down how $57.50 in fees can be tacked on to a $100 listed ticket price, drastically increasing the total cost by 57.5%. The biggest chunk comes from Ticketmaster’s own service fees.
Why Are Ticketmaster’s Fees So High?
Ticketmaster claims their fees are simply the normal costs of providing exceptional service in a competitive industry. However, most industry experts point to two real reasons fees have ballooned so much:
They Hold an Effective Monopoly
With 80-90% market share of primary event ticketing, Ticketmaster faces little competitive pressure to keep fees consumer-friendly. Primary competitors like AEG and eTix barely make a dent in Ticketmaster’s dominance. Fans are stuck buying from Ticketmaster for most major concerts and events if they want official tickets.
Venues Are Incentivized to Stick With Ticketmaster
Venues actually have a financial incentive to maintain their exclusive ticket sales deals with Ticketmaster. Under its operating model, Ticketmaster pays venues an upfront fee per ticket that mitigates their risk from unfilled seats. This means venues already made their money from Ticketmaster regardless of actual ticket sales.
Ticketmaster then offsets this advance fee by charging much higher backend service fees to ticket buyers. Even though these fees anger fans, venues have little reason to disrupt their lucrative Ticketmaster contracts.
Do These High Fees Benefit Artists and Venues?
Ticketmaster claims its fees provide essential services to venues and event organizers. However, some critics believe the fees do not proportionally benefit musicians and event venues:
Artists See Little Revenue from the Fees
Most ticket fees do not go to the artists or performers. Service fee revenue is extracted primarily by Ticketmaster. A 2010 investigation found Ticketmaster paid artists as little at 10% of the service fee amounts. The convenience, processing, and shipping fees also provide minimal benefit to performers.
Venues Receive Advance Payments
As described above, venues receive advance fee payments per ticket from Ticketmaster as an incentive to maintain exclusive ticketing partnerships. However, some critics argue these upfront venue payouts are not enough to justify the full extent of Ticketmaster’s fees.
Promoters Reap More Rewards
Music tour promoters often benefit more than artists and venues from Ticketmaster’s high fees. That’s because they have more negotiating leverage to claim a share of the total convenience fee and service fee revenue. Promoters like Live Nation enjoy substantial ticketing fee income.
Could the Government Regulate Ticketmaster’s Fees?
The exorbitant fees and Ticketmaster’s industry dominance have led some consumers to call for government regulation. However, Ticketmaster would fight any attempts at fee regulation vigorously.
Precedent of Deregulation
The US government has been reluctant to intervene in the ticketing industry. Ticket sales were deregulated in the 1990s, which allowed Ticketmaster to consolidate power and eliminate competitors. Since then, the government has been hesitant to introduce major regulations.
Lobbying Power of Ticketmaster
Ticketmaster along with parent company Live Nation Entertainment have significant lobbying resources they could leverage to combat regulation efforts. Live Nation spent $730,000 on federal lobbying in 2022. Ticketmaster could frame regulation as government overreach.
Difficulty Setting Fee Limits
It may prove challenging for regulators to determine fair fee rate limits given the opacity of Ticketmaster’s costs and operations. Complex commercial factors make fee caps tricky to implement effectively.
Could Competition Lower Ticketmaster’s Fees?
While government regulation faces challenges, experts believe introducing more competition to the ticket sales market could help lower fees. Here are some ways:
Eliminate Restrictive Exclusive Deals
Blocking venues from entering into exclusive ticketing deals with Ticketmaster could open the door for competitors. However, Ticketmaster will likely fight hard to preserve these exclusivities.
Nurture Rival Primary Ticketing Companies
Investment and consumer support for Ticketmaster alternatives like AXS, SeatGeek, Scorebig could help them grab market share and offer competitive fee structures. Thus far none have made major inroads.
Support Resale Marketplaces
Secondary ticket sales sites like StubHub enable ticket resale to fans at market-driven prices, reducing markups. Despite drawbacks, they represent competitive options to Ticketmaster’s primacy over initial sales.
Conclusion
Ticketmaster’s exorbitant fees are enabled by its effective monopoly over ticket sales for major concert and entertainment events in America. While the company claims the fees cover costs of operations and services, many believe the real driver is lack of competitive pressure.
It will likely take disruptive efforts like blocking exclusive venue contracts, growing rival ticketing companies, and nurturing the secondary ticket market to drive increased competition and potentially lower fees. Given Ticketmaster’s industry muscle, this will be very difficult to accomplish in the near future. For now, consumers will continue being hit hard by sizable convenience, processing and order fees with each Ticketmaster purchase.