Ticket resale has become a major part of the live event industry, allowing fans to buy and sell tickets on secondary marketplaces like Ticketmaster. This has led many to wonder if artists actually see any of the inflated profits when their tickets are resold at higher prices.
How ticket resale works
Ticket resale platforms like Ticketmaster allow people who can no longer attend an event to resell their tickets. The tickets are often resold at prices higher than face value due to demand exceeding supply.
Ticketmaster charges a fee to sellers who list their tickets on the resale platform. They also take a percentage of the final sale price as a commission. However, none of these fees or commissions go directly to the artist or event organizers.
The reason is that ticket resale happens in the secondary market, completely separate from the initial ticket sale. The artist and promoters are only involved in the original ticket sale through the box office or primary ticket seller. They receive no further compensation when a ticket changes hands in the secondary market.
Do artists get royalties from primary ticket sales?
When tickets are first sold through the box office or an official ticket seller, the artist does receive a portion of the revenue. The amount paid to the artist varies widely, but it’s generally based on their contracts with the promoter and venue.
Many artists get a percentage of the ticket face value and fees from the primary sale. This money comes from the event promoter as royalties, not directly from the ticket seller.
The exact royalty percentage depends on the artist’s notoriety, drawing power, and negotiations. Superstar performers playing big venues can sometimes negotiate royalties of 20% of the ticket revenue or more. Lesser-known acts may get no royalties at all, just a fixed performance fee.
Royalty calculation example
Suppose a venue has 10,000 seats that sell out at an average ticket price of $100 each, including fees. That’s $1 million in total ticket revenue. If the artist’s contract stipulates a 15% royalty rate, they would earn $150,000 from the show (15% of $1 million).
The remaining revenue covers the venue’s costs, promoter fees, and ticket seller commissions. But once those tickets hit the resale market, the artist won’t see any more money even if they resell for double or triple the face value.
Do artists get royalties from corporate ticket buys?
Another common concern around Ticketmaster and other primary ticket sellers is bulk sales to corporate resellers. Critics argue these large upfront block purchases divert too many tickets away from the general public.
However, the artist still gets their normal royalty percentage from the initial corporate sale. If a company buys 1,000 seats at a concert, the artist still gets their negotiated royalty on each ticket purchase even if it’s a single bulk transaction.
The downside for artists is that corporate bulk buyers are likely to resell those tickets at higher prices and keep those profits. But the tickets still count toward a sell-out from the artist’s perspective, helping them fulfill arena and stadium shows.
Do artists get a cut of Ticketmaster fees?
Fee Type | Amount | Beneficiary |
---|---|---|
Face Value | $100 | Venue, Promoter, Artist Royalties |
Service Fee | $25 | Ticketmaster |
Facility Fee | $15 | Venue |
Order Processing Fee | $5 | Ticketmaster |
Tickets sold through Ticketmaster incur various fees like order processing and services charges. None of these fees go to the artist or promoters.
As shown in the table, Ticketmaster collects the service fees and order processing fees. The venue receives facility fees or venue maintenance fees. The artist only earns their negotiated royalty percentage on the original base ticket price.
Can artists block ticket resales?
Some big-name performers have tried to combat secondary ticket markups by prohibiting resales. The most common method is requiring paperless tickets tied to the original purchaser’s name and identification.
However, enforcement is problematic and market demand inevitably pressures ticket holders to resell. Most states also have laws against unreasonable restrictions that block the transfer of legally obtained tickets.
Overall, outright ticket resale bans are difficult to impose and unlikely to withstand the forces of a free market. If fans are willing to pay well above face value, the tickets will usually find their way to resale markets through some channel.
Strategies artists use to capture resale revenue
While direct royalty percentages from secondary sales are elusive, artists do have some strategies to share in the upside of ticket resales:
Dynamic and market-based pricing
By using variable or “platinum” pricing models, artists can charge premium prices directly for seats that are likely to resell at higher amounts. Front rows, VIP packages, and other in-demand seats are priced dynamically to capture their true market value.
Official ticket exchanges and resales
Some artists partner with Ticketmaster or other authorized exchanges to make sure they get a percentage of any resold tickets. Fans are encouraged to resell through the official channel where the artist gets a royalty.
Bundling VIP packages and experiences
Offering exclusive meet-and-greet, merch bundles, or other VIP experiences allows artists to earn more per fan. These packages are less likely to be resold since they provide added value tied to the original ticket buyer.
Auctioning off premier seats
Select seats can be auctioned or sold via Fan Club presales at market-driven prices. These premium tickets directly bring artists higher revenue than standard face-value seats.
Should Ticketmaster share resale revenue with artists?
There are reasonable arguments on both sides of whether Ticketmaster should pay a percentage of resale profits to artists and event organizers.
On the one hand, Ticketmaster facilitates and profits from the secondary market without returning any upside to the talent and creators. Critics argue artists are being exploited while Ticketmaster cashes in.
On the other hand, Ticketmaster assumes all risk in providing the platform and payouts to artists are based on initial sale royalties. Forcing them to share secondary revenues could undermine their business model.
There are also concerns that paying artists a cut of resale profits could perversely incentivize high ticket markup. Dynamic and market-based pricing may offer a fairer compromise.
Conclusion
In summary, artists do not directly share in the inflated profits when their tickets are resold at marked up prices. However, the secondary market creates complex challenges with no easy solutions.
Banning resales would likely fail and could hurt artists by capping their upside revenue. On the other hand, paying artists a cut of secondary sales could strain the ticketing business model.
A balanced approach seems to be allowing variable and dynamic pricing, along with some controlled official resales and VIP experiences. This way artists can capture more value directly from their biggest fans. Controlled exchanges also limit unsanctioned resales and unfair scalpers profiting at the artist’s expense.