Live Music

Live Nation blog places blame elsewhere for increasing ticket prices

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Live Nation has hit back at critics that claim it is at the centre of increasing ticket prices for events, by reiterating its role, along with Ticketmaster, in the choice of pricing. 

Written by Live Nation’s executive vice-president of corporate and regulatory affairs, Dan Wall, Live Nation published a blog titled The Truth About Ticket Prices.

The post began: “In the ongoing antitrust attacks on Live Nation and Ticketmaster, a constant theme is that their alleged ‘monopolies’ are responsible for high ticket prices. Rhetorically, that’s understandable, because if you want to rile up fans against Live Nation and Ticketmaster, there is no better way than to blame them for something you know fans dislike. But is there really a connection between any of these antitrust arguments and prices for concert tickets?”

Wall added that Ticketmaster and other primary ticketing companies provide technology and services to venues, while tickets are “actually priced by artists and teams”.

Live Nation and Ticketmaster have been at the centre of long ongoing ‘anti-trust’ investigations, with a focus on a monopoly on the industry.

“The argument that Ticketmaster is responsible for high prices is really about service charges,” Wall continued.

“The practice in the US for decades has been to break down the cost of admission into a ‘face value’ sum and one or more fees added to face value. There is a common perception that service charges are ‘junk fees’ and that Ticketmaster sets the fees and pockets the money. Again, that’s not true.

“Service charges are added to the face value of concert tickets because two important players in the concert ecosystem – venues and primary ticketing companies – get little or nothing out of the revenues derived from the ticket’s face value. That money goes mostly to the performers, secondarily to cover certain show costs, and if anything is left over to the promoters.

“So, the practice developed to add a percentage service charge to a ticket’s face value to pay the venue for hosting the event and the primary ticketing company for servicing venues and distributing tickets. The add-on nature of the service fee is annoying to many fans and fuels the narrative that these are junk fees. But they are not junk fees for the simple reason that the venues and ticketing companies have costs associated with the services they provide to help produce the show. They provide value and one way or another will be compensated for it.”

Additionally, Wall discussed Live Nation’s role as a concert promoter, and said that the company’s own income in this capacity is less than 2% of concert revenues.

“On that basis alone it is obvious that what Live Nation earns as a concert promoter can’t be responsible for high ticket prices,” he said.

The real reason for high ticket prices is a simple one: supply and demand.

“For a small percentage of concerts — the high-profile ones — consumer demand greatly exceeds the supply of available tickets,” he added.  “This is obvious at the apex of the industry, where stars like Taylor Swift, Beyoncé, Ed Sheeran, Bruce Springsteen and Harry Styles could easily sell out far more shows than they could realistically play.”

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