Ticketmaster is the largest ticket sales and distribution company in the United States. They sell tickets for concert, sports, and theater events on behalf of venues and event promoters. There is a lot of confusion around how Ticketmaster’s business model works and whether artists actually make money from Ticketmaster ticket sales. In the opening paragraphs, we’ll provide quick answers to some common questions about Ticketmaster and artist revenue.
Quick Answers
– Ticketmaster acts as a distribution platform on behalf of venues and promoters. They do not retain the full ticket price.
– Ticketmaster collects service fees and other charges on top of the ticket’s face value. This is their main revenue source.
– The amount artists receive per ticket varies greatly depending on the artist’s deals and contracts. On average, artists may earn around 50-90% of the ticket’s face value.
– Secondary market sales, like scalped tickets, do not provide any revenue share for artists or promoters. Only the reseller profits.
– Ticketmaster does pay some artists an upfront guarantee regardless of sales. This insulates artists from poor ticket sales.
– High service fees often place blame on Ticketmaster, but venues/promoters determine part of these fees too.
How Does Ticketmaster Work?
Ticketmaster serves as an intermediary between venues/event promoters and ticket buyers. Here is how it works:
- A venue or event promoter contracts Ticketmaster to sell tickets and distribute them to buyers on their behalf.
- Tickets go on sale for the public through Ticketmaster at both the initial on-sale and any presales.
- Ticketmaster collects the revenue from ticket sales.
- After the event occurs, Ticketmaster will distribute the gross ticket revenue as follows:
- Service fee – This is Ticketmaster’s fee for providing the platform and ticket distribution/sale services. This is their main revenue source. Service fees are typically around 25-30% of the ticket’s face value.
- Facility fee – This goes back to the venue to cover their overhead costs of hosting the event. This is around 5-15% of the ticket price.
- Promoter fee – This goes to the event promoter to cover their costs of marketing, production, and paying the artist. The promoter fee makes up roughly 50-90% of the ticket’s face value.
- From the promoter fee, the artist is paid according to their contracted terms with the promoter. The artist does not receive any direct payment from Ticketmaster.
In essence, Ticketmaster acts as a service provider for venues and promoters to outsource their ticket sales. They do not directly pay artists anything from their own service fees. The artist is paid by the promoter, who takes a cut of the ticket’s face value.
How Much Are Service Fees?
Ticketmaster service fees are commonly 10-25% of a ticket’s face value price. However, they can sometimes be as high as 50% or more of the ticket’s base cost. What makes up these fees?
Fee Name | Description |
---|---|
Service Fee | This covers Ticketmaster’s costs for providing ticketing services and platform access. It makes up the bulk of their revenue. |
Facility Charge | This goes to the venue hosting the event to cover their overhead costs. |
Order Processing Fee | A fee Ticketmaster charges per ticket order to process the transaction. |
Delivery Fee | Covers the costs of delivering tickets to buyers, either electronically or by mail. |
Venues and event promoters also have some control over service fee amounts for their events. The fees are not determined solely by Ticketmaster. However, Ticketmaster collects and retains all the service fee revenue, which forms the bulk of their business income.
Do Artists Get Any of the Service Fees?
Artists do not directly receive any share of Ticketmaster’s various service fees and charges. As an intermediary ticket seller, Ticketmaster acts independently from the artists and their agreements with promoters/venues. Here are some key points:
- Service fees go entirely to Ticketmaster as their revenue for providing ticketing services.
- The artist’s share of the ticket face value is decided in their contract with the promoter/venue.
- On average, around 50-90% of the base ticket price goes to the promoter. This promoter fee is used to pay the artist according to their contracted terms.
- Ticketmaster has no direct financial obligation to share fees with an artist just because they are performing.
- The only exception is if an artist has a unique partnership or revenue share agreement with Ticketmaster, which is rare.
That said, high Ticketmaster fees often place blame and frustration on the artist, even if they are not directly profiting from them. This causes some artists to speak out against Ticketmaster’s practices. But ultimately, the service fees do not directly line the artist’s pockets.
How Much Do Artists Make Per Ticket?
The amount an artist makes from each ticket sale varies widely depending on the artist’s contracted terms. There are no set figures, and the revenue share agreements are usually private.
According to industry estimates, the typical range artists may earn per ticket is:
- Major touring artists – 60-90% of the ticket’s face value
- Mid-level artists – 50-75% of the face value
- Smaller/local acts – 30-50% of the face value
This varies greatly depending on the artist’s management team and leverage in negotiations. Some major legacy acts like The Rolling Stones may receive 90% or more of the ticket face value after the promoters take their cut.
Many artists also have a sliding scale for their revenue share. For example, they may take a smaller cut of the cheap seats in the nosebleeds but a larger share of VIP packages and front row seats. This allows them to maximize revenue from the most expensive ticket packages.
Guarantees Provide Consistent Pay
In addition to a per-ticket revenue share, many artists work under a guarantee model for stability. This provides a fixed upfront payment from the promoter that acts as a minimum level of compensation. It helps insulate artists from poor ticket sales or low revenue splits.
For example, a promoter may guarantee an artist $500,000 for a tour. The artist then receives that guarantee upfront before any tickets are sold. If the artist’s overall tour revenue share exceeds $500,000, then they also collect that additional money based on the contracted ticket revenue percentages.
Guarantees provide a way for artists to mitigate risk and lock in substantial payments even if ticket sales are weak. It shifts some financial risk onto the promoter rather than the artist bearing it alone.
Do Artists Profit from Secondary Ticket Sales?
When tickets are resold on secondary markets like StubHub, VividSeats, or even Craigslist, the artist does not receive any additional money. All profits from secondary sales go to the reseller. The artist’s revenue share is determined solely by primary sales through Ticketmaster or the box office.
For high demand shows where tickets often sell above face value, artists do not gain any monetary advantage no matter how expensive the secondary market tickets become. These inflated secondary prices are pocketed by scalpers and resellers, not the artists.
Similarly, if primary market tickets are sold below face value at a discount, the artist still receives their full original revenue share. They are generally insulated from fluctuations in secondary ticket prices.
Do Venues and Promoters Benefit from High Ticketmaster Fees?
It’s a common misperception that venues and promoters directly profit from Ticketmaster’s high fees. In reality, most of these charges go directly back to Ticketmaster itself.
Remember, Ticketmaster acts as a third-party distributor on behalf of promoters and venues. While venues determine their own facility fees that Ticketmaster collects, all the other charges like order processing and service fees are Ticketmaster’s revenue alone.
That said, there is an indirect benefit. By outsourcing to Ticketmaster, venues and promoters are able to effectively pass on the costs and risks of ticketing operations. Outsourcing ticketing results in significant overhead savings for venues and promoters. It also removes the need to build their own ticketing infrastructure.
Overall, Ticketmaster’s fees improve profitability for venues/promoters by allowing them to offload ticketing costs. But they are not directly pocketing the fees themselves.
Do Artists Accept High Ticket Fees?
Most artists are understandably frustrated by the high cost of fees added to tickets. However, the direct power to reduce service fees lies with the venues, promoters, and Ticketmaster itself – not artists.
There are some ways artists provide pushback:
- Renegotiating promoter contracts to take a larger revenue share percentage.
- Demanding lower/capped service fees for their shows.
- Publicly criticizing Ticketmaster’s practices to pressure change.
- Refusing to use Ticketmaster by playing only smaller venues.
- Requiring tickets be sold exclusively through fan clubs or box office with no fees.
But these tactics have their own drawbacks and limitations. Avoiding Ticketmaster reduces reach and availability. Taking a stand against fees can paint an artist as greedy if they demand a bigger cut. And promoters need sufficient revenue as well, limiting how much artists can demand.
Given Ticketmaster’s dominant market position, most artists reluctantly accept the current fee structures, even if it means a portion of their fans pay more and revenues are diluted. The alternative could mean turning down significant income by boycotting major venues and promoters. But acceptance does not equal enthusiasm or support.Should Fees Be Made More Transparent?
Many critics argue that Ticketmaster should be more transparent about exactly how much of the fees go to the artist vs. other parties. This could help reduce resentment directed toward artists and provide clarity on precisely who profits from controversial fees.
However, Ticketmaster resists calls for increased transparency. As a public company, they are under pressure to maximize revenues and margins. Itemizing out the fee distributions could expose areas vulnerable to consumer pushback and demand for lower costs. It removes their flexibility in adjusting charges.
Conclusion
Artists rightly want to make ticketing affordable for fans. But the popular narrative of artists and promoters getting rich off fees is misleading. In reality, Ticketmaster service charges provide minimal direct financial benefit to artists and promoters.
No doubt, Ticketmaster’s dominant market power and controversial practices deserve scrutiny. However, for sustainable change, the focus and pressure should be directed at the company itself, the venues, and promoters. Vilifying artists overcharges they don’t control is often misplaced.Fundamentally, the live music business involves many competing interests. Artists want fair compensation and affordable access for fans. Promoters want profits and guaranteed revenue. Venues need funding for operations and overhead. And Ticketmaster seeks to maximize its own transactional and service-based income. Reconciling these interests in a way that leads to meaningful reform of ticketing practices remains an elusive balancing act.