Concert ticket prices have been steadily rising over the past few decades. From megastars like Taylor Swift and Beyonce to classic rock acts like The Rolling Stones and Paul McCartney, it seems like tickets get pricier every time your favorite artist goes on tour.
The Main Factors Behind Rising Ticket Prices
There are several key reasons why concert tickets continue to increase in cost:
Increased Demand
Demand to see top music acts live in concert is extremely high and continues to grow. As artists gain more fans over time, demand grows for limited seats in arenas and stadiums. Basic economics suggests that as demand goes up for a finite supply, prices will rise. The biggest acts can charge more and still fill up venues. Supporting acts also benefit from playing in front of full houses.
According to a recent report from Live Nation Entertainment, the biggest concert promoter in the world, the number of individuals attending at least one live music event per year grew by 30% globally between 2014 and 2018 (from 33 million to 43 million). More fans wanting to see their favorite performers live makes the concert business more profitable, enabling venues to charge higher ticket prices.
Limited Touring Schedules
Major artists often tour less frequently, meaning they play fewer shows in fewer cities. Shorter tours with limited dates allows them to maximize per-show revenue. Restricted supply amid peak demand lets them raise prices.
Many top acts now earn so much money from recorded music, merchandise sales, sponsorships and other business ventures that they don’t need to be on the road all the time. Performing live is more about connecting with fans than making a living.
Legacy acts like The Eagles, Paul McCartney and The Rolling Stones keep ticket prices astronomical, knowing each tour could be their last. Younger superstars like Taylor Swift also limit touring off the back of new album releases to create a special event when they do finally hit the road.
Production Costs
The production values of live shows, especially for the biggest pop, rock and hip hop acts, have grown enormously over the past 20-30 years. Concertgoers now expect elaborate lighting effects, giant video walls/screens, pyrotechnics, moving stages and more. Top artists want to deliver bigger and better shows each time they go on tour.
All these production elements require an army of technicians, roadies, engineers, truck drivers and specialty gear – costs all covered in the price of a ticket.
According to Pollstar, the total production costs for Taylor Swift’s 2018 Reputation Tour were around $10 million per show. Producing a truly unique and memorable concert experience allows Swift and others to justify higher ticket prices. Fans expect spectacular shows in exchange for what they pay.
Guaranteed Money
In the past, artists would only get paid if enough tickets were sold. Now, headliners often negotiate massive guarantees with promoters upfront – ensuring themselves substantial paydays before they even hit the stage. This means the promoter assumes all the financial risk. They recoup their upfront investments by pricing tickets higher.
For example, Swift reportedly earned an $8 million guarantee per stadium show on her Reputation Tour. Large guarantees give artists incentives to charge more per ticket. If they’re getting paid either way, why not aim for maximum revenue? With guarantees in place, slow ticket sales don’t hurt the artist.
Dynamic and Platinum Pricing
The advent of dynamic and platinum pricing has made concert tickets more akin to airplane seats or hotel rooms. Prices fluctuate based on demand, rather than staying static.
If a show is hot and likely to sell out quickly, prices will be higher from the outset. For lower demand shows that aren’t filling up, prices often start lower to help drive volume.
Dynamic pricing allows promoters and artists to capture maximum value based on market demand. If people are willing to pay more to see a specific performer on a specific night, dynamic pricing enables that.
Platinum tickets act as a kind of “surge pricing.” These premium seats exceed regular prices to provide maximum revenue when ordinary seats still have availability. The upside for buyers is access to the best seats. Some see platinum pricing as unfair “gouging,” but it’s just economics – taking advantage of supply, demand and willingness to pay.
How Artists Set Ticket Prices
The common perception is that artists themselves control ticket pricing for their tours. But the reality is that concert promoters, venues, ticketing agencies and artist management teams all have input into setting prices. A variety of parties aim to maximize their own profits from each show.
That being said, the artist’s team does have significant influence over establishing price ranges and scaling costs to meet demand. Some common pricing considerations include:
- Venue size – Small clubs vs. big arenas vs. huge stadiums
- Production costs – Lighting, video, pyrotechnics, etc.
- Ticketing deals and fees – Contracts with Ticketmaster, AXS, etc.
- Artist guarantees – Fixed upfront payments to the performer
- Perceived value of artist – Based on current popularity and touring history
- Comparable pricing data – What similar artists charge for shows
- Market demand – Number of fans wanting tickets in each city
- Historic pricing – What the artist charged last time around
By evaluating the above factors, the artist’s team aims to find “optimal” price points that will generate maximum revenue while still selling out venues. It’s about balancing supply, demand and capturing value. They don’t want to leave money on the table or price out fans.
Promoters use dynamic pricing to adjust costs downward if tickets sales are slow for specific dates. The artist still gets their full guarantee.
Why Fans Keep Paying Up
With so much outrage these days over high ticket costs, why do fans keep paying up to see their favorite acts live?
Seeing is Believing
As much as people grumble over prices, when tickets actually go on sale, many fans buy anyway because experiencing live music is something they value highly. They budget and save to make it happen.
Seeing an iconic band like The Rolling Stones or U2 may only be possible a handful of times in a lifetime. True fans invest because they see it as a meaningful experience they’ll cherish forever.
FOMO
There is major fear of missing out (FOMO) when it comes to live music experiences. Fans know tickets are limited and if they don’t buy immediately, they may miss their chance to see the artist live. This panic causes fans to pay higher prices than they may initially consider reasonable.
FOMO is a strong driver in fan behavior. No one wants to be left out when their friends are all going to an amazing concert together.
VIP Perks
Some fans pay premium prices for VIP packages that include add-ons like premium seating, exclusive merchandise, backstage access, after parties with the band, photos and more. These special perks provide lasting memories on top of the concert itself.
For super fans, VIP treatment may offer the only chance to actually meet their idols and talk to them face-to-face. Money becomes no object. Regular tickets seem worthless by comparison.
Consumer Priorities
Experiential spending has grown immensely in recent years, especially among Millennials and Gen Z. Instead of spending on physical things, more consumers prioritize memorable activities and events. Fans value concert-going as a top experience worth their money and time.
Surveys show people who splurge on live events feel more connected, happier and healthier than those who don’t. Fans see concert spending as an investment in their wellbeing. It’s actually a bargain compared to therapy!
Scarcity and Exclusivity
Due to limited seating and infrequent touring, seeing major artists live provides a sense of exclusivity. Fans feel like part of a privileged few who get to witness something special. There’s a prestige associated with having tickets others don’t.
Artists further stoke this sentiment of scarcity by announcing limited “one night only” shows or special runs in just a handful of cities. That turns ordinary concerts into can’t-miss events. Fans jump at the rare opportunity.
Limited capacity venues also breed rapid sellouts. If a show at a small club sells out instantly, those who do get tickets feel like VIPs. Having something others don’t evokes pride.
The Future of Escalating Concert Ticket Prices
Will concert ticket costs continue to climb indefinitely? Probably not. There are signs demand may be leveling off as price resistance grows among fans.
Unsustainable Trajectory
Historically, concert ticket prices have outpaced inflation across the live music industry. But this trajectory probably isn’t sustainable long-term as more fans get priced out.
At a certain point, prices will exceed what most people are willing and able to pay. When audiences stop turning out in droves, artists and promoters will likely adjust pricing strategies. There is still a line where demand falters no matter how devoted fans may be.
The biggest acts with the highest production costs have the most room to keep pushing prices upwards. But lesser known, emerging acts could face audience backlash if they get too greedy too fast.
Secondary Market Competition
In the past, performers profited little from secondary resales on sites like StubHub. But now tools like Ticketmaster’s SafeTix enable artists to benefit from secondary transactions.
A new “Verified Fan to Fan Exchange” feature even facilitates direct resale among Ticketmaster users. The upside for fans is cheaper access. If professional scalpers can’t corner the resale market, they have less incentive to snap up seats using bots. This could make the initial on-sale more fair for fans.
Artists now thinking about secondary revenue may be less apt to inflate primary market prices. Cheaper primary tickets that get exchanged at higher secondary prices could drive greater revenue overall.
Bundling Benefits
Bundling concert tickets into broader experiences is another potential counterbalance on costs. Packages that bundle travel, hotel rooms, merchandise, etc. with the ticket makes it a more meaningful purchase.
VIP packages similarly enhance the value proposition at higher price points. Unique experiences command higher prices. Done right, bundling could enable artists to charge very high premiums for first class treatment that offsets cheaper regular seats. Multi-tiered packages cater to all fan budgets.
Direct Artist Relationships
Social media enables artists to build more direct relationships with fans. Loyal followers become their own customer base to tap for support. Artists with strong fan connections stand to benefit most from this move towards a patronage model between creator and supporter.
Fans “invest” more to support artists they feel close to. We see this through growth in artist subscription services like Patreon. Over time, fan funding could reduce dependency on inflated live ticket sales.
Virtual Concert Alternatives
As virtual concert technology matures, it could offer fans cheaper access to elite performers online. High-quality streaming shows may provide alternatives to expensive real world tickets.
Augmented and virtual reality will further enhance virtual concert experiences. Cost reductions for bandwidth and tech should make this scalable for more acts. It provides revenue beyond physical venue limits.
Of course, virtual concerts can’t fully replicate the irreplaceable excitement and community of in-person shows. They are a supplement more than a substitute. But for the biggest acts, it’s a new way to serve fans worldwide.
Conclusion
The live music industry has proven adept at finding new ways to drive revenue growth in the face of disruption. Concert ticket prices will likely continue trending higher, especially for top acts playing big venues.
But as fan tolerance reaches its limits, market forces should compel more reasonable pricing. Virtual concerts, secondary exchanges, bundling benefits and direct fan funding offer alternatives.
While costs may eventually plateau, nothing can meaningfully replicate the magic and memories of seeing your favorite artist perform live. As long as fans are hungry for those irreplaceable experiences, promoters and artists will enjoy potent pricing power.