Decker

Apparently we aren't the only ones baffled by Ticketmaster's outrageous fees.

John Galt

I haven't paid attention to this tour, what's the debacle he's referring to?

dex14

I don't know if there is a debacle per say... or just opposed the the high TM fees... but they've been very anti-scalping and price gouging. Smith has a a whole string of tweets about the ticket onsale and how they turned down dynamic pricing and any artist can do so if they want.

John Galt

Gotcha....yeah, let's see how high ticket prices get when he removes liquidity from the secondary market.

dex14

It worked well for Pearl Jam.

John Galt

Yeah, they raked in the Platinum prices after pushing secondary prices up due to their restrictions.

Josh-da-man

John Galt

Hey, they've spent billions of dollars fighting scalpers....gotta make that money back somewhere.

(This is mostly sarcasm, but they obviously have to make money back on the services they provide. Should a band selling tickets below market value mean Ticketmaster should make their fees lower as well? $23/ticket in fees for arena shows is incredibly low compared to other comparable shows)

Decker

Robert Smith frigging RULES!

The Spectre

Hadn't been to a show or concert in a while. Bought some tickets today for an event that my son wants to go. The tickets are sold through Ticketmaster. Paid $40 for each ticket and $27 in fees for each one of them. And $25 more for parking. It's fucking ridiculous and a complete abuse of power.

John Galt

Rapino joins Bob Lefsetz' podcast for a deep dive into the ticketing industry. Really in depth overview into the breakdown of fees, how they get distributed, and the negotiations between artists, venues, and Ticketmaster. He also brought up the issues with The Cure. According to Rapino, The Cure did not put anything in their contract about fees being $10 or whatever it ended up being. Ticketmaster absorbed the majority of the expense of the refunds, with a few venues agreeing to split the cost.

It wasn't but about 10 minutes in that he warns that they're not even close to reaching peak pricing on platinum tickets.

https://open.spotify.com/episode/3lL...OaoKznS4g&nd=1

Decker

Yeah, it's insane. That is somehow even worse than what I just paid.
Thought I was getting an amazing deal for center floor seats, row M for Elvis Costello. Then got to check-out


I have no idea how they can get away with charging fees like this. It's so shameless. And it turns surprisingly reasonable ticket prices into something significantly less affordable.
That said, while 20% charge is insane, charging over 50% of the ticket price that you had to pay is actually obscene. No excuse for that.

bchbdaddy

Bought 4 danzig tickets Wednesday through AXS. 80$ fee and 5 bucks for a handling fee even though they are will call.

John Galt

What's a fair price then? According to LYV's 2022 10-K, they sold 270MM tickets and had operating expenses of almost $12.5B. That breaks down to $46 of expenses per ticket sold.

Decker

How is that possible? Where could those costs add up to $12.5B? They don't have tons of employees or physical locations. Unless it's related to costs associated with Covid cancellations in 2021, which is what I expect.

John Galt

2019 was $8.5B on 220MM tickets sold for $38 per ticket.

2022 headcount was 12,800 FT and 29,000 Seasonal and PT

Decker

Is that just Ticketmaster, or does that include all of Live Nation? Because obviously they need lots of employees and have expenses to run their facilities. I can't imagine those numbers are just CS agents and Server techs. I am aware a lot of fees go to the venues, but it's disingenuous to lump those expenses in with the cost of actually providing a website and ticket distribution services because as I've stated, those costs are pretty minimal.

John Galt

That’s for the entire corporation. It’s hard to break everything down by segment because the ticketing business is where their profit is. They lost $160MM on $13.5B in revenue from their concert division and they make that up on the ticketing side. Ticketing expense looks like around $1.5B and netted $600MM in profit.

Heres another way to look at it. They had $700MM in profit on 270MM tickets. So they’re making about $2.70 from every ticket that’s sold.
And then they have interest and income tax to pay on that. That’s not a whole lot of wiggle room in price before they’re losing money.

Decker

And that's the truth right there. They charge whatever they want for ticketing services because that's where they make their money. They already charge a "facilities fee", but they supplement that with whatever ticketing fees they think they can get away with.
The cost of operating Live Nation is irrelevant to me. That can be reflected in the cost of the concert ticket at a venue owned by Live Nation. The Ticketmaster fees are supposed to be for the convenience of providing tickets, not to help boost their bottom line after their probably-should-have-been-illegal monopoly merger.

John Galt

That money goes to the artist, not to Live Nation

So Ticketmaster isn’t supposed to make money?

Draven

Honestly, if they can't make money without charging ridiculous fees, no, they shouldn't. It means their business model is flawed.

Decker

TIcketmaster is supposed to make some money off of providing the servers and websites needed to distribute tickets in a quick and equitable fashion, and to provide customer service after the tickets are sold. I think 10% of the ticket price is very reasonable and should easily cover those costs. Ticketmaster probably agrees because when I sell my Raiders tickets, they take a 10% cut of my selling price.
But if the service fees are uncapped, then there's nothing stopping Ticketmaster from charging whatever they want -- so that's what they do. If Live Nation is not profitable for them, they shouldn't have merged with them; it's not incumbent on me to subsidize their business, which was formed not to be beneficial to the consumer or to the artists, but rather to control both the venues and the means of ticket distribution in those venues under one exclusive umbrella.

Kdogg

They also charge a fee when the tickets sell so they get another 10-20% from the buyers. All reselling sites do that.

John Galt

Can you explain what exactly makes them "ridiculous"? I've posted the numbers and they actually have rather slim margins. I'm guessing you would have the same outrage for any other company you do business with that broke out their charges by CoGS and the company's markup. Can you imagine ordering a pizza from Papa Johns and the receipt said "Cost of Ingredients: $1.99, Papa Johns Convenience Fee $12.00" or if your internet provider broke out "Cost of Services $9.99, Comcast Convenience Fee $65.00"?

They're a tech services company that operates an incredibly robust website that handles $17B worth of volume a year. I think you're severely underestimating the complexity involved. Joe Berchtold testified before congress that they've spent over a Billion dollars in recent years just to fight automation tools. As someone else mentioned, the 10% commission you pay would be equivalent to a fee Ticketmaster charges the artists to sell their tickets on their service. They still charge purchase fees to the buyer of your tickets. Due to the markups/markdowns that brokers apply to exchanges, It's very difficult to find apples to apples comparisons of fees, but Ticketmaster's aren't at all out of line with all the other marketplaces in the industry.

Nothing stopping them....other than what people are willing to pay. Nobody is forcing anyone to buy concert tickets, and judging by the demand in the industry right now there's no shortage of people willing to pay the fees.

So if instead of a $20 Convenience Fee that goes to Ticketmaster, you'd be ok with a $10 Facility Fee that goes to Live Nation and a $10 convenience Fee that goes to Ticketmaster? It all rolls up the same. It's not any different than if Coca Cola bought an aluminum can processor and operated that entity at break even. Would you tell Coca Cola they should only charge for the soda that you're drinking and not the cost of processing the can? There's plenty of companies out there that operate their verticals like this.

The merger should have never been allowed and Live Nation has been violating the consent decree pretty much from day one. Live Nation was struggling mightily due to the economic climate at the time and that probably had a lot to do with why it was approved. I'd love to see them broken up and Rapino thrown in jail. It's been a scummy industry from the very beginning and they're engaged in tons of shady practices, but I've read their financial statements and listened to their earnings calls and I really don't see anything unreasonable about the service fees. Could they trim the organization and cut out some fat...sure, but it's not going to cut down the fees the way people expect. Instead, Live Nation is happy for people to complain about the fees because it takes the focus off the real issues like the way they hold back tickets to manipulate supply and demand, then incorporate dynamic pricing after they've artificially raised prices. Trying to push through non transferable ticket legislation which is just one monopolistic practice to force customers into their ecosystem. Or the way they operate the VF program and determine account rankings for queue positions so it's not them giving certain high volume buyers favorable positions. Or how they don't even need to worry about making sure they have the infrastructure in place for high volume sales because consumers have no choice but to buy from them....who cares if the website crashes, we're still selling every Taylor Swift ticket. Or how bad the seat selection process actually is when you have thousands of customers all competing over the same seats on a map.

Josh-da-man

It's interesting how the prices of tickets have just exploded over the past couple of decades. I think that's the issue people have, moreso than the Ticketmaster fees. At the end of the day, it's an aggregate cost.

I mean, shit, when I was back in high school a concert ticket might cost twenty-five dollars. Thirty if they were pushing it. And it was general admission, so the seating and floor was first come, first served.

Now the ticket for a same or similar act the same or similar venue is going to be over one hundred dollars. Then you're going to pay an eighty dollar "convenience fee" on top of that. And a "venue fee" of ten dollars. Then you're going to pay twenty or thirty dollars for parking. (Back three decades ago, parking was usually free, or had a one or two dollar fee tacked onto the ticket.) And instead of that twenty-five dollar ticket, it turns into a two hundred fifty dollar ticket. Or a three or four or five hundred dollar ticket if you want a decent seat or the general admission floor. And if you want to buy beer, it's going to be six to ten dollars for a bottle poured into a plastic cup.

It seems to me like there's a lot of profiteering going on between the promoters, the ticket brokers, the artists, and the venues. Somehow, thirty years ago, they could put on concerts and still make money without charging all of these ridiculous fees and parking charges and exorbitant concession prices.

And I also remember when ticket scalping was illegal. Now Ticketmaster, the venues, and the artists are doing it.

Seeing the fees costs and charges broken down and itemized presents a psychological barrier. You might accept a five hundred dollar ticket, but when you see a two hundred collar ticket with three hundred dollars worth of fees and charges tacked on, it just pisses people off.

John Galt is right with his Papa John's analogy. It's like going to a fast food place and paying three dollars for a large fountain drink. People will do that. But it's not broken down likeBUT... people are willing to pay these prices and jump through these hurdles to go to concerts, especially for A-list acts. I wouldn't pay a thousand dollars to see Taylor Swift or Beyonce. I wouldn't even go if it was free. If someone paid me a thousand dollars I'd probably go. And enough of people obviously will pay that. They might bitch and moan, but they'll still give up their credit card numbers.

I worry more about the increasing costs of things we actually need like health care, rent, real estate, utilities, and court/legal fees (I've known quite a few people who had to spend tens of thousands of dollars to fight off bullshit lawsuits and criminal charges). Going to concerts is a luxury for most people. You need a roof over your head and insulin. You don't need to see Beyonce shake her ass on a stage.