Ticketmaster, the largest primary ticket outlet in the United States, has faced criticism over the years for the various fees it charges on top of the base ticket price. These fees, which can add more than 30% to the final cost, are often frustrating and confusing for customers. So why does Ticketmaster continue getting away with these controversial charges?
The fees
There are several types of fees that Ticketmaster may tack on to a ticket purchase:
- Service fee – This fee goes to Ticketmaster for providing its platform and ticket sales services. It is typically around 15-20% of the base ticket price.
- Facility charge – This charge goes back to the venue to cover their costs of hosting the event. It varies by venue.
- Order processing fee – A fee for processing the ticket order, usually around $5-$10 per ticket.
There may also be other variable fees based on the event like charity donations or taxes. In the end, a $100 ticket could easily cost $130-$150 after all the fees are added.
The rationale
Ticketmaster justifies these fees by saying they help cover all the costs involved in operating its platform and selling tickets. These include:
- Technology infrastructure – Hosting its website and mobile apps, along with all the servers and software needed to power real-time ticket sales and distribution across thousands of events and venues.
- Customer support – Staffing call centers to handle customer inquiries and issues before, during, and after ticket sales.
- Sales and distribution – Paying employees who facilitate ticket sales and manage the distribution process.
- Marketing and advertising – Promoting events and ticket sales through ads and partnerships.
- Administrative costs – Corporate functions like legal, human resources, accounting, and more.
Ticketmaster claims these operational expenses would make it impossible to only charge the nominal ticket price. So the fees help cover those costs and still make the business profitable.
The monopoly factor
In many ways, Ticketmaster operates as a monopoly in the primary event ticketing market. It sells tickets on behalf of over 80% of major concerts and shows in the US. It also has exclusive ticketing deals with most major venues and promoters.
This lack of competition means customers have little choice but to pay Ticketmaster’s fees if they want to buy tickets to marquee events. Ticketmaster faces no pressure to lower fees to compete for business. Consumers are a captive market.
Government oversight
While fans may complain about fees, Ticketmaster has not faced much regulatory intervention over them. The fees are disclosed (albeit in small print) before purchase, so they do not violate any consumer protection laws.
A notable exception was in the mid-1990s when Ticketmaster’s exclusive deals were investigated by the Department of Justice for being anticompetitive. But after a 3 year investigation, the DOJ approved Ticketmaster’s merger with LiveNation in 2010, creating an even bigger vertical monopoly.
As long as Ticketmaster does not egregiously overcharge relative to the value provided, regulators have bigger antitrust priorities to focus on.
Attempts at alternatives
Over the years, many companies have tried to compete with Ticketmaster by offering lower fees. But most have struggled for two reasons:
- They cannot get access to the same number of exclusive ticketing contracts with venues, promoters, and artists.
- They struggle to replicate Ticketmaster’s technology and achieve the same scale and efficiency.
For example, tickets.com and TicketsNow each had some success in the 2000s but ended up getting acquired and absorbed by Ticketmaster. Upstarts like SeatGeek and AXS have gained some traction but are still far behind Ticketmaster’s dominance.
Is there a solution?
Short of regulators stepping in more aggressively, there are few levers to pull to reduce Ticketmaster’s fees currently. Possible consumer-driven solutions include:
- Avoiding dynmaic pricing – Ticketmaster applies “dynamic pricing” algorithms that frequently adjust prices based on demand. Opting for standard fixed price tickets avoids some major fees.
- Buying group tickets – Fees are often cheaper when split across larger group orders.
- Buying directly – In some cases, fans can avoid fees by buying directly from the venue box office.
- Fan presales – Special presales for fan club members sometimes have discounted fees before public sales open.
While helpful in some cases, these tactics cannot fully solve the problem given Ticketmaster’s strong grip on inventory. Ultimately, if fans want to see real change, it may take collective pressure and advocacy to push regulators and the industry to reform Ticketmaster’s fee practices.
Conclusion
Ticketmaster’s pervasive fees are frustrating for many consumers, yet endure due to the company’s dominant market position and the lack of regulatory intervention. While Ticketmaster claims the fees are necessary costs of doing business, critics view them as an abuse of Ticketmaster’s monopoly power. Until competitive dynamics shift in the ticketing industry, fees are likely to remain a vexing reality for concert and event goers using Ticketmaster’s platform.
