Ticketmaster is known for tacking on extremely high fees when customers purchase tickets for concerts, sporting events, and other live entertainment through their website. These fees, referred to as “service fees” or “convenience fees” by Ticketmaster, often add 20-30% extra to the base ticket price. Many customers find themselves frustrated and wondering why Ticketmaster’s fees are so expensive.
What is Ticketmaster’s service fee?
Ticketmaster’s service fee is an added charge levied on top of the base price of the ticket for an event. It is intended to cover the costs incurred by Ticketmaster to operate its platform and process ticket orders. The fee amount varies based on the event, section, quantity of tickets, and other factors. Generally speaking, the more expensive the ticket, the higher the service fee amount.
Service fees on Ticketmaster typically range from 10-25% of the ticket price. For very high demand events like certain concert tours or playoff games, the fees can exceed 30% of the ticket cost. For a $100 ticket, you could expect to pay a service fee of $15-$30 on top of the ticket price.
Why are Ticketmaster’s service fees so high?
There are several reasons why Ticketmaster tacks on such high fees compared to other ticket retailers:
1. Operating costs
Ticketmaster incurs significant operating costs to run its platform and process ticket transactions. These include:
- Technology costs to develop and maintain website/apps
- Customer service staffing to respond to buyer and seller inquiries
- Payment processing fees to handle credit card transactions
- Sales and marketing expenses to promote Ticketmaster’s services
The service fee helps Ticketmaster cover these operating expenses and still turn a profit on ticket sales.
2. Captive audience
For many major concerts and sporting events, Ticketmaster has exclusive ticketing rights. This means they are the only authorized seller of tickets, giving customers no alternative option. With a captive audience, Ticketmaster has more power to tack on high fees and get away with it.
3. High market demand
Fans are often willing to pay almost anything to see their favorite artists or teams play live. The incredible demand allows Ticketmaster to charge higher fees, because customers will grudgingly pay them to secure tickets.
Some examples of high market demand events where service fees are exceptionally high:
- Major rock/pop concerts like The Rolling Stones or Taylor Swift
- NBA playoffs and finals games
- NFL playoff and Super Bowl games
- NCAA Final Four tournament
4. Processing fees
Ticketmaster pays credit card processing fees on every ticket transaction. These fees, which can be 2-4% of transaction amounts, contribute to Ticketmaster’s costs and drive up the service fees they charge.
Does Ticketmaster have monopolistic control?
Many consumers accuse Ticketmaster of monopolistic practices in the live event ticketing industry. Ticketmaster does have exclusive ticket sales rights with many major venues, teams, and artists. However, they technically do not have an absolute legal monopoly.
In 2010, Ticketmaster and concert promoter Live Nation merged into a new entity called Live Nation Entertainment. Prior to the merger, the U.S. Department of Justice conducted an in-depth investigation into potential antitrust issues. They ultimately approved the merger, on the condition that Ticketmaster license its software to two competitors, Anschutz Entertainment Group (AEG) and Comcast-Spectacor.
The licensing deal enabled AEG and Comcast to launch competing ticketing platforms, AXS and Paciolan. So today, Ticketmaster does have some direct competitors in the primary ticket sales market. However, Ticketmaster still sells over 80% of primary tickets to high-profile live entertainment events.
Is Ticketmaster running a monopoly or duopoly with Live Nation?
Many industry experts argue that allowing the Ticketmaster-Live Nation merger created a dangerous duopoly in live entertainment ticketing and promotions. A duopoly is when two companies dominate a market.
After the merger, Live Nation Entertainment became the world’s largest promoter of live concerts and events. Ticketmaster sells tickets to the majority of Live Nation events. Critics argue this vertical integration reduced competition and gave Live Nation Entertainment too much control.
However, the Department of Justice believed their conditions on the merger would maintain competition in ticketing. The Ticketmaster licensing deal allowed competitors like AXS and Paciolan to grow their market share. DoJ lawyers decided this would provide sufficient consumer choice to avoid a monopoly.
Does Ticketmaster have competitors?
Yes, Ticketmaster does have some competitors in the primary event ticketing industry. However, Ticketmaster still maintains a dominant market share.
Major Ticketmaster competitors include:
- AXS – Owned by AEG, sells primary tickets for concerts/events at AEG venues
- Paciolan – Owned by Comcast, sells primary tickets for university sports, minor league teams, theaters, etc.
- SeatGeek – An independent ticketing platform used by some NFL and NBA teams
- VividSeats – Focuses on the secondary ticket resale market
- StubHub – Also focuses on secondary ticket resale market
However, Ticketmaster still controls around 80% market share in primary ticket sales. They are the exclusive ticketing vendor for many major venues, artists, sports leagues, college teams, and events.
Does Ticketmaster face any antitrust scrutiny?
In recent years, Ticketmaster has come under growing criticism and antitrust scrutiny from lawmakers and consumer advocates. Common complaints about Ticketmaster’s practices include:
- Excessively high fees that dramatically increase costs for fans
- Loss of competition after the Ticketmaster-Live Nation merger
- Rules and contracts that stifle competitors
- Predatory practices that exploit locked-in customers
Some specific anti-competitive behaviors Ticketmaster has been accused of:
- Requiring venues to use Ticketmaster exclusively or threatening loss of shows
- Contracting with artists so Ticketmaster has exclusive rights to their tour tickets
- Retaliating against venues that use other ticketing companies by cancelling shows
- Using technical tricks to divert customers from competitors’ sites back to Ticketmaster
In early 2022, the U.S. Department of Justice opened a new antitrust investigation into Live Nation Entertainment’s practices. They are looking into abuse of power in live music promotion and ticketing. Possible outcomes of the DOJ investigation include:
- Forcing Live Nation to divest all or part of its Ticketmaster business
- Prohibiting anti-competitive exclusive deals and coercion of venues
- Demanding fair licensing of ticketing software to competitors
- Breaking up the Live Nation-Ticketmaster merger completely
If the DOJ finds sufficient evidence of monopolistic practices, it could lead to major structural changes or even a full breakup of Live Nation Entertainment’s ticketing and promotions arms.
Does Ticketmaster ever lower or waive fees?
Ticketmaster does occasionally run special promotions where they temporarily waive or lower service fees:
- New venue openings – When a new stadium or theater venue opens, Ticketmaster will sometimes offer first events with no fees to drive customer awareness.
- Slow ticket sales – Unpopular events that are struggling to sell tickets may offer fans discounted fees to boost demand.
- Special occasions – Fees are sometimes waived for charity events, community occasions, or grand openings.
- Season ticket holders – Sports teams with Ticketmaster ticketing contracts will sometimes negotiate fee-free transactions for season ticket holders as a benefit.
However, these cases of reduced fees are rare exceptions. The vast majority of the time, Ticketmaster’s standard high service fees still apply.
Tips for avoiding high Ticketmaster fees
Savvy fans use various strategies to minimize Ticketmaster fees and dodge their pricing power. Some suggestions include:
- Purchase early during presales when fees are lower
- Buy season ticket packages for sports when available
- Look for fee waiver promotions, if any exist
- Buy group tickets – fees don’t increase much for extra tickets
- Buy directly from the box office to avoid online fees
- Purchase resale tickets on secondary market sites like StubHub
Unfortunately, customers are ultimately at the mercy of Ticketmaster. For very popular events where demand outpaces supply, Ticketmaster knows they can charge high fees and still sell out tickets.
Is Ticketmaster going to lower service fees?
It is unlikely that Ticketmaster will voluntarily reduce their service fees unless consumer pressure and competitive forces require them to. Ticketmaster appears to be maximizing fees as high as the market will bear.
In recent years, Ticketmaster fees have continued to rise, not decline. For example, average fees for NFL games increased 10% from 2018 to 2019. The Live Nation CEO has cited service fees as a key revenue growth driver.
While fans and politicians calling for lower Ticketmaster fees seems reasonable, the company has little incentive to cut into its own profits. It seems improbable fees will drop unless:
- Legislation caps Ticketmaster’s allowable fees
- DOJ antitrust actions increase competition
- Fan boycotts actually impact Ticketmaster’s ticket sales
Without major external intervention, Ticketmaster’s high fees are likely here to stay.
Could Ticketmaster’s fees be made illegal?
Lawmakers at both state and federal levels have explored ways to curb Ticketmaster’s expensive fees. Some possible legislative actions include:
- Capping service fees at a maximum percentage (ex. 15%) of the ticket face value
- Requiring Service fees to be clearly disclosed upfront in ticket listings
- Stopping Ticketmaster from restricting venues from using other ticketing companies
- Adjusting antitrust regulations to break up Ticketmaster’s market dominance
- Nullifying exclusivity deals between Ticketmaster and major venues/artists/teams
However, legislating lower Ticketmaster fees faces challenges. Ticketmaster defends fees as necessary to cover operating costs. They also make major political donations and have strong industry lobbying power.
New York State has passed a law capping Ticketmaster’s resale fees at 20% over face value. But efforts to limit original sale fees have stalled so far. If the DOJ probe proves major antitrust violations, potential remedies could include fee caps.
How does Ticketmaster justify high fees?
Ticketmaster uses a variety of explanations to defend the company’s high service fees, including:
- Covering our costs – Fees pay for their technical infrastructure, staffing, marketing and other overhead.
- Artist/team demands – Big stars and sports leagues demand huge contracts, which drives up fees.
- Market-based pricing – Similar to surge pricing for Uber rides, they claim fees match demand.
- Convenience – Fees provide customer service and instant digital ticket access.
- Exclusive deals – Access to top acts and venues requires expensive contracts.
Critics argue these rationales don’t fully explain the exorbitantly high fee amounts charged by Ticketmaster relative to costs. However, fans have limited leverage unless they completely boycott buying tickets.
Does Ticketmaster have political influence?
Yes, Ticketmaster and its parent company Live Nation Entertainment spend millions on lobbying and political donations to advance their interests. Some examples of their political activity:
- Live Nation has spent over $9 million on federal lobbying since 2009. They lobby heavily on antitrust issues.
- The Live Nation PAC donates over $1 million per election cycle to various political candidates.
- Executives like Live Nation CEO Michael Rapino make large personal political contributions.
- Ticketmaster lawyers and lobbyists fight anti-trust regulation efforts in states like New York.
This political spending helps Ticketmaster maintain its dominant market position and resist fee regulation attempts. Their size and power makes it difficult for lawmakers to challenge their practices.
Could fees actually be lowered?
Though it seems unlikely Ticketmaster would voluntarily reduce fees, there are certain scenarios where regulatory or competitive factors could force them to cut fees:
- Federal fee cap legislation passed by Congress
- Court rulings finding their fees constitute price gouging
- DOJ antitrust action breaks up their ticketing monopoly
- Competitors like AXS and SeatGeek gain significant market share
- Primary ticket sales shift to NFT blockchain platforms
- Fan boycotts actually dent Ticketmaster’s sales and profits
Strong external pressure from government, courts, competitors or consumers could potentially compel Ticketmaster to lower fees. But without an impact to their bottom line, they have little financial incentive to voluntarily reduce service fees.
In summary, Ticketmaster’s extraordinarily high service fees are driven by their market dominance, exclusive deals, high demand events, and political leverage. Fees have steadily increased over time as Ticketmaster pursues profit growth. Without major government antitrust action or massive fan disruption, Ticketmaster will likely continue charging some of the highest fees in the live entertainment industry for the foreseeable future.