Ticketmaster is the largest ticket sales and distribution company in the United States. It sells tickets for concerts, sporting events, theater shows, and other live entertainment events. Ticketmaster has a huge influence on consumer behavior in the live entertainment industry.
What is Ticketmaster?
Ticketmaster is a ticket sales and distribution outlet that was founded in 1976. It provides ticket sales for the majority of major concert venues in the US. Ticketmaster has exclusive deals with most major venues to be their sole ticket provider. This gives them a near monopoly on ticket sales for most large events.
In 2010, Ticketmaster merged with Live Nation to become Live Nation Entertainment. Live Nation is the world’s largest live entertainment company. It owns, operates, has booking rights for, and has equity interests in over 160 venues worldwide. The merger with Live Nation gave Ticketmaster control of even more venues and events.
Today, Ticketmaster sells over 485 million tickets per year. It has over 32,000 clients worldwide. These include venues, stadiums and arenas, theaters, music festivals, and other live entertainment event organizers. With so much control over event ticketing, Ticketmaster has a major influence on consumer behavior.
How Ticketmaster Impacts Consumers
Here are some of the key ways that Ticketmaster impacts consumers:
Service fees
One of the biggest frustrations for consumers is the service fees Ticketmaster charges on every ticket purchase. These fees include an order processing fee, ticket fulfillment fee, and sometimes a facility charge or other fees. On average, services fees add 27% to the face value of a ticket. For popular shows that are likely to sell out quickly, fees can account for up to 50% of the total ticket cost.
These high fees often anger and frustrate consumers. But Ticketmaster relies heavily on service fees as a revenue source. In their SEC filings, Ticketmaster states that service fees accounted for 24% of their total revenue in 2016.
Dynamic pricing
Ticketmaster utilizes dynamic pricing, also known as surge pricing or demand-based pricing. This means ticket prices fluctuate over time based on projected demand. As an event draws nearer and tickets start selling out, prices will rise. Fans have no choice but to pay the higher prices if they want to attend popular events.
Dynamic pricing allows Ticketmaster to maximize their profits on high-demand events. But it also angers many consumers who feel forced to pay 2X or 3X the original ticket price to get tickets to in-demand shows right before the event. This significantly impacts consumer budgets and perceptions.
service Fees
Year | Average Ticket Price | Average Fees | Total Ticket Cost |
---|---|---|---|
2010 | $61.39 | $10.65 | $72.04 |
2015 | $84.72 | $16.91 | $101.63 |
2020 | $128.78 | $28.12 | $156.90 |
This table shows how Ticketmaster’s service fees have increased steadily over time, significantly impacting the total ticket cost paid by consumers.
Captive ticketing platforms
Ticketmaster frequently signs exclusive deals with venues to be their official and only ticket outlet. This means customers have no choice but to purchase tickets through Ticketmaster. Even if other ticketing platforms like AXS or eTix offer lower fees, customers cannot purchase from them if Ticketmaster has the exclusive deal.
This captive ticketing platform frustrates consumers and consumer advocacy groups like Fan Freedom who fight for more fair, open ticketing practices. But it allows Ticketmaster to charge higher fees without the pressure of competition.
Limited ticket supply
Ticketmaster has been frequently accused of deliberately limiting ticket supply to drive up demand. The theory is they hold back tickets during pre-sales and general on-sales, only to release them later at a higher dynamic price. While Ticketmaster denies these claims, many consumers feel this practice takes place and frustrates their ability to get tickets.
Having a near monopoly on ticketing also means Ticketmaster has the power to restrict overall ticket supply. Sports teams, leagues, and event organizers work with Ticketmaster to determine how many tickets will be sold. This means Ticketmaster has some control over ticket scarcity, which again drives up demand and prices.
Difficulty obtaining tickets
The combination of high fees, dynamic pricing, and limited ticket supply means consumers often have a difficult time obtaining tickets to top events. Ticketmaster’s sales frequently sell out in minutes, even seconds. Bots and scalpers exacerbate the problem by gobbling up tickets en masse. Regular consumers are left frustrated and empty-handed.
This difficulty obtaining tickets even when trying right at the on-sale time significantly impacts consumer perceptions of Ticketmaster. It also feeds the secondary ticket market, where scalped tickets sell for 2-10X face value or more.
Lack of consumer choice
The near monopoly, exclusive deals, and ticket scarcity mean consumers have very little choice when it comes to ticket purchasing options. If you want to attend major concerts, sports games, or other top events, you have to purchase through Ticketmaster in most cases. There are not many other authorized options.
This lack of choice removes any power consumers may have to make buying decisions based on cost, fees, or other factors. If Ticketmaster is the only authorized seller, customers have to pay their prices regardless of feelings about the company.
How This Impacts Consumer Behavior
Ticketmaster’s practices and dominance in ticketing lead to some clear impacts on consumer behavior:
Buy immediately or risk missing out
Because tickets sell out incredibly fast, especially for top events, consumers feel they need to buy as soon as tickets go on sale. There is no time for comparison shopping or evaluating options. This feeds into the fear of missing out that drives instant purchase behavior. If you wait even 5 minutes, the event will sell out and you’ll miss your chance.
Frustration and anger
Consumers frequently express frustration and anger at Ticketmaster when they cannot obtain tickets or feel they are being gauged by fees and prices. Complaints about Ticketmaster are ubiquitous online in forums, social media, and comments sections of news stories about the company.
But because consumers have no alternative options, they feels “forced” to use Ticketmaster anyway. This breeds resentment and negative brand perceptions.
Perception of lack of fairness or ethics
The high and hidden fees, difficulty obtaining tickets, and lack of choice lead many consumers to view Ticketmaster as an unethical, greedy company. Whether true or not, the perception exists that Ticketmaster does not deal fairly with consumers.
This erodes brand trust and goodwill. But again, with no other ticket options for top events, customers still reluctantly purchase from Ticketmaster.
Budgeting challenges
The high and fluctuating prices caused by dynamic pricing make it extremely difficult for consumers to budget for events. A ticket that originally cost $50 could end up costing $150 right before showtime. This unpredictability frustrates efforts to plan and budget spending.
Despite the budget challenges, most consumers still dig deep and find the money to attend events they really want to see live.
Feeling forced into secondary market
When initial on-sales sell out in seconds, many consumers feel their only option is to purchase tickets from scalpers on secondary resale sites like StubHub. There they pay hugely inflated prices – but still feel it is better than completely missing out.
Ticketmaster acquiring secondary market site TicketsNow in 2008 for $265 million also leaves a bad taste in the mouths of consumers. It feels like Ticketmaster profits from both the initial sale and secondary resale.
What Events Are Most Impacted?
The biggest consumer behavior impacts center around hot events that sell out quickly and attract scalpers looking to profit. These include:
- Major rock/pop concerts – Think tours by artists like Beyonce, Taylor Swift, or Bruce Springsteen.
- Major sporting events – Championships, playoffs, finals, or rivalry games.
- Music festivals – Coachella, Lollapalooza, ACL, etc.
- Broadway/theater hits – Think Hamilton, Wicked, etc.
- Comedy events – Big arena shows by comics like Kevin Hart or Jerry Seinfeld.
For lower demand events, the consumer behavior impact is lower. But for huge in-demand events, Ticketmaster’s practices dominate and dictate consumer behavior.
Attempts to Combat Ticketmaster’s Power
There have been some attempts to combat Ticketmaster’s power and impact on consumers:
Class action lawsuits
Consumers have filed multiple class action antitrust lawsuits against Ticketmaster alleging anti-competitive practices. Cases accuse them of monopolistic behavior, collusion with venues, and artificially inflated prices. But so far none of the cases have succeeded.
New ticketing platforms
Some new players have entered the ticket sales market trying to compete with Ticketmaster. These include AXS, a platform run by AEG venues. But Ticketmaster remains the dominant force with the majority of exclusive venue contracts.
Fan advocacy groups
Groups like Fan Freedom lobby on behalf of consumers for more fair, transparent ticketing practices. They pressure the industry for open ticketing and fight against excessive fees and other issues. But Ticketmaster remains largely unchanged.
Government oversight
US and UK government entities have investigated Ticketmaster for possible antitrust violations. But no significant legal action has been taken to date to break up their near monopoly in ticketing.
Despite these efforts, Ticketmaster still largely dominates and influences consumer behavior in live event ticketing.
Conclusion
In conclusion, Ticketmaster has a massive influence on live event consumer behavior. Their near monopoly position combined with high fees, dynamic pricing, ticket scarcity, and captive ticketing platforms greatly shape the customer experience. Consumers are left feeling frustrated, angry, forced into undesirable behavior, and taken advantage of.
Attempts to combat their power by consumers, watchdog groups, and the government have thus far failed. Ticketmaster remains the dominant player in event ticketing. And they continue to dictate poor consumer experiences, especially for hot high-demand events. Significant reforms are still needed to improve consumers’ ability to freely and fairly obtain tickets.