I got the following comment from a loyal reader on the Ticketmaster story:
I was reading your Ticketmaster/nfl article and just realized what a disservice the NFL is doing for its fans who can barely afford tickets in another big sellout.
I was trying to buy my mom’s xmas present for tickets to the Dancing with the Stars touring show in Milwaukee this January. Tickets are sold over the internet by Ticketmaster so I already expected I would pay through the nose. I ordered two $65 tickets and as I was about to buy, I reviewed the bill and the total was $178! $14.50 for processing fee plus $2.5 for convenience fee for each ticket! On top of that it was another $15 to send me the tickets. What a ripoff. So I called my sister, had her drive over to the Bradley Center and buy two tickets….total $130. I don’t understand how any organization can allow their fans to get screwed over by these guys.
First, Joe, I hope that they don’t cancel the concert because TicketMaster will not refund you the surcharge. And, from the misery loves company angle, check out this list of charges that this metal fan had to endure.
Ticketmaster has been the bane of event attenders for a long time. This NY Times article is over a decade old and the Pearl Jam protest is so old now that half the people on the internet probably don’t even understand that it occurred.
Who or what is Ticketmaster? Ticketmaster is a division of IAC/InteractiveCorp, the mega-online conglomerate that, among other businesses, includes LendingTree, Ask, Bloglines, CollegeHumor, evite, Match, iWon and the Home Shopping Network. In 2006, Ticketmaster sold 128 million tickets, valued at over $7 billion. From those $7 billion in sales, Ticketmaster tacked on an additional $1.1 billion in fees. The $264.4 million in profits “earned” by Ticketmaster accounted for 35% of IAC’s profits (as to 18% of revenue). The ticket surcharge added 15.7% to the average cost of a ticket.
From its 10K, here’s how IAC describes Ticketmaster’s monopoly:
Ticketmaster generally enters into written agreements with its clients pursuant to which it agrees to license the Ticketmaster System and related systems to clients, and to serve as the clients’ exclusive ticket sales agent for sales of individual tickets sold to the general public outside of facility box offices, including any tickets sold over the internet, by phone, and at third party retailers’ remote sales outlets, for specified multi-year periods. Pursuant to an agreement with a facility, Ticketmaster generally is granted the right to sell tickets for all events presented at that facility for which tickets are available to the general public… An agreement with a promoter generally grants Ticketmaster the right to sell tickets for all events presented by that promoter at any facility for which tickets are publicly available, unless the facility is already covered by an existing agreement with Ticketmaster or is covered by an exclusive agreement with another automated ticketing service company. …Ticketmaster’s clients may not utilize, authorize or promote the services of third party ticketing companies while under contract with Ticketmaster.
Ticketing revenue is generated primarily from convenience charges and order processing and delivery fees received by Ticketmaster for each ticket sold by Ticketmaster on behalf of its clients. Convenience charges and order processing fees are negotiated and included in Ticketmaster’s contracts with its clients. Pursuant to these contracts, Ticketmaster is granted the right to collect from ticket purchasers a per ticket convenience charge on all tickets sold through its websites, by telephone and through retail sales outlets and other media. Generally, the amount of the convenience charge is determined during the contract negotiation process, and typically varies based upon numerous factors, including the services to be rendered to the client, the amount and cost of equipment to be installed at the client’s box office and the amount of advertising and/or promotional allowances to be provided, as well as the type of event and whether the ticket is purchased through www.ticketmaster.com, by telephone, through a remote sales outlet or other media. Any deviations from those amounts for any event are negotiated and agreed upon by Ticketmaster and its client prior to the commencement of ticket sales. There is an additional per order “order processing” fee on all ticket orders sold by Ticketmaster other than at retail sales outlets, and an additional premium delivery fee per order in cases where consumers opt for premium delivery (e.g. , delivery via overnight courier or e-mail in the case of Ticketmaster’s TicketFast product). Generally, the agreement between Ticketmaster and a client will also establish the amounts and frequency of any increases in the convenience charge and order processing fees during the term of the agreement. In many cases, clients participate in the convenience charges and/or order processing fees and/or premium delivery fees paid by ticket purchasers for tickets bought through Ticketmaster for their events. The amount of such participation, if any, is determined by negotiation between Ticketmaster and the client…
That’s pretty dense if you’re not used to reading 10k’s so here’s what it says:
First, Ticketmaster enters into agreements with both facilities (i.e., the United Center) and promoters (i.e., the Bulls) in which the Bulls or United Center are agreeing ahead of time to what the ticket surcharges are going to be.
Second, these contracts are long term contracts.
Third, while under contract no other ticketing companies may be used and Ticketmaster has the right to sell all of that client’s tickets.
Finally, and importantly, Ticketmaster gives a negotiated cut of the convenience charge to the facility/promoter.
So why do they allow Ticketmaster to have a monopoly? Because Ticketmaster pays them to through the convenience fee. Re-read the NFL article. Ticketmaster paid the NFL a huge chunk of money up front in order to be the exclusive provider.
(Not everybody is out there to screw the consumer. The Cleveland Cavaliers have sued Ticketmaster in an attempt to end Ticketmaster’s stranglehold with respect to Cavs resales. The New England Patriots sued and won against Stubhub in what seems to be some sort of attempt to limit resales above face value. Here’s a pretty good article on the economics of resales.)
Maybe We Can Fight Ticketmaster
After all the whining and explanations, this is the part of the article where I’m supposed to tell you to just face the facts. You can’t fight city hall and you can’t boycott Ticketmaster. There’s nothing that we can do.
But what if that’s not true. What if instead of fighting Ticketmaster, we all decided to fight IAC? What if you used eLoan instead of LendingTree. What if the seven of you that use Ask switched to Google instead? What if you boycotted Bloglines, CollegeHumor, evite, Match, iWon or the Home Shopping Network instead of Ticketmaster? Wouldn’t that accomplish the same goal? And wouldn’t it be so much easier? IAC is basically an online holding company. Most of their companies have online competitors that do exactly what they do, making finding a different company fairly easily.
Just a thought.
One Final Thought
One final random question/comment on event tickets. The electronic ticket readers that most facilities are employing now are designed to make it difficult/near impossible to counterfeit tickets. But, instead of counterfeiting tickets, why don’t people just make a recording of the little beep that the ticket reading machine makes and then play itp as the ticket person is scanning the fake ticket. The ticket readers don’t read the tickets do they? No, they just scan it and listen for the beep.
Another Final Thought
Watch the ads on this site of the next few days. I bet you see a leasts a few ads for concerts or whatever and this little rant will end up enriching Ticketmaster even more. Oh the irony.