Ticketmaster is the largest ticket sales and distribution company in the United States. When customers purchase tickets to concerts and live events through Ticketmaster, they are often surprised by the number of additional fees that are added to the base ticket price. These fees, which can add up to more than 25% of the total cost, are known as service fees and processing fees. This leads many customers to wonder – do these Ticketmaster fees go to the artist performing the show? The short answer is no, Ticketmaster fees do not go to the artists.
What are Ticketmaster Fees?
Ticketmaster fees are additional charges added when you purchase event tickets through Ticketmaster’s website, mobile app, by phone, or in person at a box office that uses Ticketmaster technology. There are a few different types of Ticketmaster fees:
Service Fees
This is a fee that Ticketmaster charges for using their platform to search for events, purchase tickets, and have them delivered. The service fee helps cover the costs of operating their website and mobile apps. This fee ranges between 10-25% of the ticket price.
Order Processing Fee
This fee covers the cost of processing ticket orders through Ticketmaster. Whether you purchase tickets online, through the app, by phone or in person, there are costs associated with safely handling financial transactions and coordinating ticket delivery. This fee is usually around $5-$10 per ticket order.
Facility Charge
Some venues charge an additional facility fee and Ticketmaster collects this on their behalf. This helps venues cover operational costs.
Delivery Fees
If you choose to have tickets mailed to you or select will call pickup, delivery fees help cover the logistics of getting the tickets into your hands securely. Fees vary based on delivery method.
So in summary, Ticketmaster fees cover the costs of running their massive ticketing platform, securely processing payments, and coordinating ticket delivery logistics.
Where Do Ticketmaster Fees Go?
As a ticket purchaser, it can be frustrating to see all the extra fees tacked on at checkout. Especially since the fees often feel excessive compared to the actual ticket prices. This confusion has led some customers to mistakenly assume the artist or concert promoter is taking a cut of the fees. However, Ticketmaster fees do not go to the performers, teams, or event organizers.
Here is a breakdown of where Ticketmaster fees actually go:
Operating Expenses
As a technology and logistics company, Ticketmaster incurs substantial operating costs to run their platforms and services globally. This includes website hosting, app development and maintenance, customer support, litigation expenses, and general overhead costs of a large corporation. Service fees help fund these ongoing operating expenses.
Paying Venues
Ticketmaster has contracts with venues and promoters to sell tickets through their platform. Part of the service fees collected from ticket sales are paid back to the venues and promoters for this right.
Event Producers
For some events like concerts and theatrical shows, part of the service fee may go back to the event producer putting on the performance.
Delivery Partners
When you select delivery options like electronic transfer or mailing tickets, Ticketmaster partners with third-party companies to handle fulfillment and has to share revenue to cover those costs.
Payment Processors
There are credit card processing fees associated with online and phone ticket purchases that Ticketmaster has to pay and builds into the order processing fees.
Profit
As a large public company, Ticketmaster is also beholden to shareholders and invests profits back into growing their business. Their profit margin on service fees is estimated to be about 25%.
So in summary, Ticketmaster fees help cover all the costs of facilitating ticket sales and generating revenue for their shareholders. The artists, teams, venues, and event organizers do not receive money from Ticketmaster fees – only from the initial ticket price.
Do Artists Get Paid for Tickets Sold on Ticketmaster?
Artists and performers do not receive any money from the various fees Ticketmaster charges. However, they are still paid when tickets sell on Ticketmaster. Here is how it works:
How Ticket Prices Are Determined
Well before tickets go on sale, the artist, their management team, and the concert promoter agree on how to price tickets for each venue on the tour. They take into account the venue size, production costs, artist fees, and market demand when setting prices. The initial ticket price is how the artist gets paid, not from any additional service fees.
Revenue Split with Promoter
Once the initial ticket price is set, the promoter assumes the financial risk of promoting and marketing the event. The artist will receive an agreed upon percentage of the ticket revenue from the promoter. This revenue split varies greatly, but could be 70% for the artist, 30% for the promoter, for example.
Contract with Ticketmaster
The promoter then contracts with Ticketmaster to handle ticket sales and distribution in return for a portion of the convenience service fees. The promoter and Ticketmaster may also share portions of order processing or delivery fees.
Artist Paid from Ticket Price
After the tickets sell, the venue provides the gross ticket revenue (minus taxes and their own facility fees in some cases) to the promoter. The promoter takes out their percentage share and production costs and pays the artist the remaining ticket revenue based on their contractual agreement.
So while the artist does not get paid directly from Ticketmaster fees, those service charges have no impact on how much money the performer earns from the initial ticket price. Those prices are determined upfront by the artist, management, and promoter well before Ticketmaster gets involved.
Does Ticketmaster Profit Unfairly from Extra Fees?
The sheer amount of fees added to event tickets these days understandably causes resentment among fans. Some see it as Ticketmaster unfairly profiting from these extra charges. Event tickets are often expensive enough already without the addition of sometimes exorbitant processing fees on top.
However, there are reasons why Ticketmaster’s fees are so high. Here are some factors that allow Ticketmaster to rake in big revenue from service fees:
Industry Dominance
Ticketmaster sells tickets for 70 of the top 100 arenas and stadiums in the United States. They also have exclusive partnerships with many major concert promoters like LiveNation. This vast market share in the industry allows Ticketmaster to charge higher fees.
High Operating Expenses
It takes a lot of technology, staffing, and overhead to run a system that sells 500 million tickets per year worldwide. Ticketmaster has to spend big to handle that massive volume which gets built into the fees.
dynamic pricing
Ticketmaster utilizes demand-based dynamic pricing for many events which increases fees for hot tickets. Fans dislike paying a premium for big games or popular concerts.
Lack of Competition
There are not many other major primary market ticketing platforms out there. StubHub focuses on secondary resale, not initial sales. This lack of competition allows Ticketmaster to charge higher fees.
While these factors allow Ticketmaster to profit heavily off fees, there are also benefits provided by their ticketing systems:
– Broad ticket availability for high-demand events
– Convenient purchasing across multiple devices
– Secure ticket transactions
– Wider event promotion and marketing
– Protections against counterfeit tickets
So there are legitimate justifications for why Ticketmaster charges the fees it does. However, the lack of viable competition in the industry also allows them to get away with higher fees that many see as price gouging. More competition could help drive down some of those exorbitant fees.
How Artists Can Avoid High Ticketmaster Fees
While Ticketmaster dominates ticketing, artists are not powerless when it comes to avoiding high fees for their shows. Here are some strategies performers can use:
Demand Lower Base Ticket Prices
Since artists are paid from the initial ticket price, lowering base prices reduces the proportional size of fees added on top. Negotiating lower face-value tickets leaves less room for fees.
Play Venues Not Tied to Ticketmaster
Some venues use their own ticketing system or work with other providers like AXS or eTix. Playing independent venues avoids Ticketmaster altogether.
Self-Promoted Shows
Bands can rent venues themselves and handle their own ticketing and promotion. Without a middleman promoter, they have more control over the process.
Sell Direct-to-Fan
Through their own website, bands can sell ticket packages directly to fans that may come with perks like VIP access. No middleman fees involved.
Dynamic Pricing
Artists can implement demand-based dynamic pricing on their own. So instead of Ticketmaster hiking up fees on the secondary market, bands can adjust prices to what the demand will pay.
Negotiate a Fee Cap
Big-name artists with leverage can negotiate a cap on the total amount of service fees added to their tickets. U2 reportedly did this on their Joshua Tree Tour in 2017.
While Ticketmaster still dominates the industry, artists do have ways to provide cheaper tickets for dedicated fans if they are creative.
Will Ticketmaster Fees Keep Increasing?
Considering how consistently Ticketmaster has raised fees over the years, it looks likely that charges will continue going up. Some contributing factors:
Higher Operating Costs
As technology improves and more sales shift online, Ticketmaster has to keep investing in website and app upgrades to handle the volume. Their operating expenses will continue rising.
Dynamic Pricing Demand
Ticketmaster makes a lot of money from surge pricing fees based on demand for hot events. As dynamic pricing gets more sophisticated, expect more instances of crazy fees.
Expansion into New Markets
As Ticketmaster expands their services into new countries and markets, their overhead will continue expanding leading to higher fees.
Exclusive Promoter Deals
Locking down exclusive partnerships with promoters like LiveNation reduces competition further and enables higher fees systemwide.
Cost of Inflation
Like all companies, Ticketmaster has to deal with the costs of inflation and passing those expenses to consumers through higher fees.
Premium Products
New premium services like VIP packages provide more opportunities to tack on additional fees for exclusive experiences.
While no one can predict the future, Ticketmaster’s past actions and current advantages in the industry point towards continuing fee hikes – much to the chagrin of ticket buyers everywhere.
How Can Event-Goers Avoid High Fees?
Fans dismayed by ever-increasing ticket processing fees do have some options to avoid getting ripped off. Here are some suggestions:
Buy Direct from the Venue Box Office
Skip the online fees and purchase tickets at the venue box office in person. Some may still have a facility fee, but you can avoid the bulk of the online processing fees.
Choose E-Ticket Delivery
Opt for electronic ticket delivery to avoid physical ticket mailing/pickup fees. E-tickets also prevent lost ticket issues.
Buy Group Tickets
Look for group ticket deals. Sometimes buying in bulk helps lesson per ticket fees. Find a group of friends to split the costs.
Join Fan Clubs
Some artist fan clubs provide access to special pre-sales with cheaper pre-sale prices before the general public on-sale.
Wait for Third-Party Sales
Tickets on secondary sites like StubHub do come with higher costs from resellers, but can sometimes avoid the bulk of processing fees.
Buy Tickets Last Minute
Right before the event, some ticket inventory may get released at the box office at base prices to fill remaining seats.
Avoid Print-at-Home Tickets
Choose mobile ticket delivery instead as print-at-home sometimes comes with extra convenience charges for using your own printer.
Find Ticketmaster Fee Waiver Codes
Some credit cards or promos offer special Ticketmaster codes good for waiving processing fees on ticket purchases, so keep an eye out for those.
While it takes some work, fans can still find ways to keep service charges lower when buying tickets from Ticketmaster.
Will Changing Laws Regulate Ticket Fees?
The booming live entertainment industry coupled with Ticketmaster’s dominance has compelled some state and federal lawmakers to take action against unfair ticketing practices. Could new legislation provide some fee relief for ticket buyers? Let’s look at some of the recent developments.
BOTS Act
The Federal BOTS Act made it illegal to use ticket buying software bots which was leading to quick sellouts and higher resale prices. This should help level the playing field for real fans trying to buy tickets.
All-In Pricing
Some states like New York have passed laws requiring ticket sellers to list the full inclusive price upfront including all fees to provide transparency to buyers.
Fee Caps
To stop unreasonable fees, some states now limit how much can be charged over the printed ticket price. In New Jersey, total fees are capped at 20% of the ticket cost.
Resale Price Ceilings
State lawmakers continue to propose limits on how much tickets can be marked up for resale on secondary sites. This could help curb extreme markup of hot tickets.
Fee Disclosures
Pending federal legislation would require ticketing companies to fully break down and explain the purpose of all the different fees being charged.
While progress is being made, Ticketmaster’s strong lobbying power makes it difficult for substantial nationwide changes to take hold. But increased public awareness of shady practices will continue putting pressure on regulators.
Conclusion
In the live event ticketing industry, Ticketmaster is near synonymous with obnoxious service fees. While customers may assume these fees must be going to the artists and teams they came to see, that is not the case. Ticketmaster fees go to covering their operating expenses, paying partners, and generating corporate profits.
Artists are only paid from the initial ticket face value price which they determine in advance with promoters. But performers with enough leverage do have some options to mitigate the amount of fees added onto their shows. For fans, the best way to avoid excessive fees for now is being a savvy shopper and utilizing ticketing alternatives when possible.
As Ticketmaster continues to expand their reach, competitors falter, and fees climb higher, expect growing public demand for regulators to take action. There is hope that between new legislation, public pressure, and artist creativity, there can be a future with cheaper, more transparent event ticketing. But Ticketmaster’s entrenched role in the industry makes that a formidable challenge.