Ticketmaster is the largest primary ticket outlet for major entertainment, sports, and arts events in the United States. However, Ticketmaster also facilitates secondary ticket resale through its Ticketmaster Resale (or Ticket Exchange) platform. This leads to an important question – does Ticketmaster take a cut of tickets resold through its own resale marketplace? The short answer is yes, Ticketmaster does take a commission on the resale tickets sold through its platform. However, the exact amount may vary based on the event type, venue policies, and more.
How Ticketmaster primary and resale ticketing works
When tickets first go on sale for an event, they are sold through Ticketmaster as the primary ticket outlet. Ticketmaster has exclusive contracts with many major venues, artists, and promoters to be the primary ticketing provider. At this stage, Ticketmaster collects fees from the initial ticket buyers as their main source of revenue. These fees often include services fees, facility fees, and more.
After the initial on-sale, there is usually a vibrant secondary ticket market for high demand events. This involves ticket holders reselling tickets they can no longer use. Ticketmaster operates its own resale platform to facilitate this secondary market. Sellers can list their tickets for resale on Ticketmaster Resale. Buyers can then purchase resell tickets directly through the Ticketmaster Resale site or app.
Ticketmaster’s role in secondary ticket resales
Ticketmaster Resale basically acts as a middleman marketplace connecting resellers and buyers. However, Ticketmaster takes a commission on every resale ticket sold on their platform. So in effect, they take a second cut of tickets that were already sold once through their primary ticketing platform.
The fee on resale tickets is collected from the buyer at checkout. Part of this fee goes to the seller, and part goes to Ticketmaster as the resale intermediary.
Ticketmaster resale service fees and commissions
Ticketmaster does not publicly list their exact fees or commission rates for resale tickets. However, they have provided some broad guidance on their website:
– Buyers pay a 10-20% “service fee” on all resale ticket purchases. This fee goes partly to Ticketmaster and partly to the seller.
– Sellers receive about 5-20% less than the listed resale price after Ticketmaster’s commissions.
So Ticketmaster appears to take around 10-15% commission on the resale transaction. However, the exact percentage likely varies based on factors like:
– The original ticket value – higher value tickets may have lower percentage fees.
– Agreements with specific venues and events – some may negotiate different terms.
– Seller preferences – sellers can opt to get paid instantly at a higher commission rate.
While the exact numbers are ambiguous, Ticketmaster does clearly take a cut of every resale transaction made through their platform. They essentially profit twice from high demand tickets – once on the initial sale, and again when they are resold.
Why Ticketmaster offers a resale marketplace
At first glance, it may seem counterintuitive that Ticketmaster operates its own secondary resale platform. Wouldn’t that compete with and undercut their primary ticket sales? However, there are a few reasons why the resale marketplace is beneficial for Ticketmaster:
1. Captures more value from high demand tickets
For hot events where tickets resell at a huge markup, Ticketmaster misses out on making extra profit off those high-value tickets. Their initial ticketing fees are likely a small fraction of what the tickets ultimately resell for. By offering their own resale platform, Ticketmaster gets to share in more of the profit from those premium tickets.
2. More convenience encourages more reselling
If Ticketmaster made resellingtickets difficult, more people might hold onto tickets rather than reselling them. By offering a seamless resale marketplace, they likely increase the volume of reselling activity and commissions.
3. Combats unofficial ticket scalping
Ticket resale will happen one way or another. By providing an official marketplace, Ticketmaster discourages unauthorized scalping and captures value that would otherwise go to 3rd party resellers.
4. Richer data on ticket demand
The secondary market essentially runs real-time experiments on ticket demand at different price levels. Analyzing resale patterns gives Ticketmaster incredibly valuable data that can inform optimal pricing models.
So in summary, the resale marketplace helps Ticketmaster maximize profit across the entire supply chain of ticketing. The company has proven adept at finding multiple ways to generate revenue from live events.
Criticisms of Ticketmaster’s resale policies
Ticketmaster does face some criticism of their secondary ticketing practices. Consumer advocacy groups argue:
– Resale commissions represent “double dipping” by charging fees twice for one ticket.
– Resale sites make tickets more scarce and drive up prices, gouging fans.
– Lack of transparency around exact fees and processes on resale tickets.
– Ticketmaster holds too much control over entire live event ticketing ecosystem.
However, Ticketmaster defends their resale ticketing practices as follows:
– Reselling tickets is legal, so a resale marketplace provides more protection for consumers.
– Prices are set by sellers based on market demand, not Ticketmaster.
– Their platform offers guarantees against invalid or fraudulent tickets.
There are good arguments on both sides of this issue. Ultimately, Ticketmaster has a dominant enough position in ticketing to dictate the terms of how secondary markets operate.
Does Ticketmaster have special deals with resellers?
Some reports have accused Ticketmaster of giving special perks or fee rebates to large scale resellers as an incentive to use their platform. For example, Ticketmaster reportedly has a special deal with its “Professional Reseller” program members.
However, Ticketmaster maintains that they offer consistent fees and services to all sellers equally. Any negotiated volume discounts would be the same as those provided to major primary ticket buyers like concert promoters. They claim strict rules prohibit resellers from artificially stockpiling large volumes of tickets.
The one exception is that Ticketmaster may offer incentive rebates when selling very large venue contract blocks. For example, a venue giving Ticketmaster their entire season of tickets to sell could negotiate a rebate. This is arguably justifiable based on the different circumstances.
Overall, their position is that no buyers have special advantages over others on their marketplace. However, critics remain skeptical of whether large professional resellers may get at least somewhat preferential treatment.
Future outlook for Ticketmaster resale practices
Looking forward, here are some key considerations around Ticketmaster’s secondary ticketing strategy:
– Pressure may grow for more transparency and caps on resale fees and commissions. But Ticketmaster will likely resist major changes to their profitable model.
– Ticketmaster may look to integrate primary and secondary sales even more seamlessly on their platform. This could further advantage their own resale over 3rd parties.
– If any acts or venues push back against Ticketmaster’s practices, it could force some evolution. But their dominant market position gives them leverage.
– Alternatives like blockchain-based ticketing may threaten Ticketmaster’s gatekeeper status long-term, but likely not in the short term.
– Policymakers concerned about fairness for consumers and artists could intervene more aggressively, but no signs yet of that happening.
– Don’t expect Ticketmaster’s double dipping through resales to go away anytime soon. The revenues are just too big.
So in conclusion, Ticketmaster does clearly take a sizable commission on tickets resold through their secondary marketplace. This is unlikely to change even amid criticisms, given Ticketmaster’s entrenched central role in event ticketing from start to finish. The company has found creative ways to profit from live entertainment’s surging demand, and secondary ticketing is just another example.
References
1. https://ticketmasterbusiness.wordpress.com/2021/05/14/heres-how-ticketmaster-resale-works-for-fans/
2. https://www.billboard.com/pro/ticketmaster-resale-lawsuit-settlement-cap-plaintiffs/
3. https://www.cnbc.com/2022/08/24/heres-how-ticketmaster-makes-money-off-those-fees.html
4. https://thehustle.co/ticketmaster-livenation-music-monopoly/
5. https://www.vox.com/the-goods/22661045/ticketmaster-lawsuit-fees-avenue-q-broadway