Ticketmaster is the largest ticket sales and distribution company in the United States. Many people have accused Ticketmaster of dynamically adjusting ticket prices and fees based on demand, essentially raising prices for highly sought after events and concerts. But does Ticketmaster actually engage in dynamic pricing and are ticket prices really going up over time on their platform? Let’s take an in-depth look at Ticketmaster’s pricing models and find out.
How Ticketmaster’s Pricing Works
Ticketmaster uses a variable pricing model where the final price you pay includes the face value of the ticket set by the event organizer plus any applicable fees. The fees go to Ticketmaster for providing the ticket sales and distribution services. There are several different fees that can apply:
- Service fee – This covers the costs of Ticketmaster’s ticketing software and services. The amount varies based on the ticket price.
- Order processing fee – A fee applied per ticket order, not per ticket.
- Facility charge – This goes back to the venue to cover their costs.
- Convenience fees – For using services like printing tickets at home.
The controversy around Ticketmaster’s fees is that they are not transparent upfront and seem to be inconsistent, leading many to accuse Ticketmaster of engaging in dynamic pricing. Service fees in particular seem to spike for high demand events.
However, Ticketmaster maintains it does not do true dynamic pricing where tickets are repriced in real-time based on market demand. The fees are set ahead of time based on the expected demand for an event. Events expected to sell out quickly are assigned higher fees to deter scalpers and brokers from buying up all the tickets.
Evidence Ticket Prices Are Going Up
While Ticketmaster claims it does not engage in true dynamic pricing, there is plenty of evidence that over time, ticket prices including fees are increasing on Ticketmaster:
- Service fees have increased 86% between 2010 and 2018, far outpacing inflation.
- Order processing fees have gone up 33% in the same time period.
- A 2018 Canadian study found Ticketmaster events averaged a 61.3% total price increase when including fees.
- An American Antitrust Institute study found Ticketmaster fees had grown faster than technological costs to justify them.
While Ticketmaster claims fees are set based on demand forecasts, the fact remains that overall customers are paying significantly more in fees compared to a decade ago. Events do seem to have dynamic fees based on Howard Chang, a former Ticketmaster developer who said he helped build tools to adjust fees upwards for hot events up to 75%.
So in essence, Ticketmaster does appear to engage in a limited form of dynamic pricing by forecasting demand and adjusting fees accordingly. The end result is ticket buyers pay more fees for high demand events compared to lower demand events.
Factors Driving Increased Ticketmaster Fees
If Ticketmaster is raising fees on in-demand events over time, what factors are driving these increases? Here are some likely reasons:
- Operating costs – Ticketmaster has argued increases over time are to cover growing operating expenses like developing new ticketing software and services.
- Higher venue fees – As venues upgrade over time, they pass some costs back to Ticketmaster via higher facility fees.
- Artist fee demands – Top artists and promoters require larger cuts of the ticket prices.
- Market control – As the dominant player, Ticketmaster can impose higher fees simply due to lack of competition in the space.
- Boosting profits – While costs may be increasing to justify fee hikes, many suspect Ticketmaster is also inflating fees to increase profits.
The likely scenario is that it is a combination of increasing costs plus Ticketmaster leveraging its dominant position to layer on higher fees for hot events and boost overall profits. The lack of transparency around exactly how fees are calculated also allows Ticketmaster flexibility to adjust them upwards over time.
Other Ways Ticketmaster May Impact Price
In addition to fees, there are some other ways Ticketmaster’s practices can influence the prices paid by consumers:
- Ticket limits – Ticketmaster enforces ticket buying limits for popular shows, making more tickets available for more buyers vs. all selling out instantly to a few bulk buyers. This possibly keeps secondary market prices lower.
- Minimum prices – Ticketmaster now has the technology to enforce minimum ticket price limits, disallowing deep discounting that can anger partner venues. Minimum prices likely keep primary prices higher.
- Dynamic pricing partnerships – Ticketmaster partners with some teams, venues, and concert promoters to implement real dynamic pricing where primary ticket prices fluctuate based on demand.
So Ticketmaster facilitates ways for event organizers to potentially raise prices in the primary and secondary ticket market through limits, minimums, and dynamic pricing programs. However, these are implemented at the discretion of its partners, not Ticketmaster directly.
Ways Fans Can Get the Best Ticket Prices
Given the evidence that Ticketmaster does allow the overall cost of tickets to increase for hot events through fee inflation, here are some tips fans can use to get the best deal:
- Buy early – Tickets are almost always cheaper right when they first go on sale, before any scalping or hype raises secondary prices.
- Use presales – Take advantage of artist and venue presales before the general on-sale to score tickets before they sell out or surge in demand.
- Consider season tickets or subscriptions – For repeated events like sports seasons, bundled tickets packages often provide a discount over single-game prices.
- Buy group tickets – Buying in bulk often comes with group discounts.
- Buy from the box office – Skip the fees by buying at the venue box office directly.
- Go weekday or off-peak – Less in-demand weekday and daytime events often means lower prices.
While fans have little control over the fees, taking advantage of early sales, bulk discounts, and off-peak times are good ways to minimize the damage high demand does to Ticketmaster pricing. Being savvy about when you buy and how can maximize your ticket dollars.
Will Ticketmaster’s dominance continue?
Ticketmaster has maintained an over 80% market share of primary ticket sales for major concerts and events in the US and a similar dominance in other countries. This allows it great leeway to dictate fees and other pricing policies to consumers with little competitive pressure.
However, there are some signs that Ticketmaster’s dominance could slowly erode over time:
- Direct-to-fan platforms – Artists selling directly via their own websites cuts out Ticketmaster completely.
- Fan club presales – More artists using exclusive fan club ticket windows reduces inventory for Ticketmaster.
- Upstart competitors – Rival ticketing companies like Eventbrite, AXS, and SeatGeek are trying to break through, albeit with limited success so far.
- Legal challenges – Ongoing court cases around anti-competitive practices and fee abuses may reform Ticketmaster’s pricing if successful.
That said, Ticketmaster’s entrenched position with major venues, leagues, promoters and artist management built up over decades will make any erosion of market share a very slow process. Fans are unlikely to see meaningful relief from escalating Ticketmaster prices and fees any time soon. Absent major legal or regulatory intervention, the company will likely continue dictating increasingly higher prices to captive ticket buyers for the foreseeable future.
Conclusion
Ticketmaster does not engage in true dynamic pricing where ticket prices fluctuate in real-time based on demand. However, it is clear prices including fees are consistently going up over time, especially for high demand events. This is likely driven by a combination of Ticketmaster passing on increasing operating costs and leveraging its market dominance to inflate fees as well. For fans, the best ways to get affordable tickets are buying early, in bulk, and during off-peak times. Until meaningful competition emerges or legal action forces changes to pricing policies, fans will remain largely at the mercy of Ticketmaster fees for major concerts and events.