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Comment by username332211 | Hacker News Reader

For the same reason why artists use Ticketmaster. Do you think they are stupid and just hand over ticket distribution to a company that routinely charges 30$ fees to a 40$ ticket?

No, artists and producers aren't stupid, they get the most of the money from the Ticketmaster "fees". But when a fan sees a 70$ ticket, they'd may decide Bruce Springsteen (net worth 650$ million) isn't a man of the people. When they see a 40$ ticket and a 30$ ticket, fans just swear at Ticketmaster.

I'm confident in a few years we'll read about how scalping enterprises do profit sharing with artists and producers.

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This is not how concerts work, and artists and producers don't get any money from Ticketmaster fees. In most cases, a promoter pays an artist a flat fee to perform. The promoter then markets the show and gets the ticket sales, and Ticketmaster gets Ticketmaster fees.

Unfortunately Ticketmaster is owned by LiveNation, and they are far and away the biggest promoter. They sign exclusive rights with large venues. My local 25,000 seat amphitheater has a deal with LiveNation. I can only get tickets to shows there through Ticketmaster.

Artists hate Ticketmaster too (some have sued them) but if you want to do an arena tour, good luck avoiding them. Artists use them because they don't have a choice. The number of large venues that don't use TM is growing, my local basketball arena uses SeatGeek.

The one concession TM makes is to their fan clubs. Artists get to sell tickets directly to a limited number of fans. If you love an artist, joining their fan club will probably save you the annual fee back in one show.

> Unfortunately Ticketmaster is owned by LiveNation, and they are far and away the biggest promoter. They sign exclusive rights with large venues. My local 25,000 seat amphitheater has a deal with LiveNation. I can only get tickets to shows there through Ticketmaster.

So mostly what GP said. This is not an accident, and everyone is in on it.

I don't think it's the same at all - the crucial point of difference is whether artists deserve to get blamed for this situation. Various people in the thread have claimed that they do, that they're receiving kickbacks from scalping or a portion of Ticketmaster fees on resales, but your parent comment claims that this is not the case and misrepresents the ticket sale structure.

I think that's a critical difference, because if the current situation is actually a big reputation laundering scam by artists, there's not much we can do about it without regulation. If it's not, if in fact most artists are as unhappy about the situation as their fans, there's quite a lot they can do about it and should be encouraged to do so even if it makes getting a ticket significantly harder (e.g. showing ID for purchased tickets at the venue and only allowing 1:1 refunds, not resales of tickets).

Of course, if producers are receiving a significant portion of earnings on resales, some of that does "trickle down" to artists in the form of higher performing fees on the basis of anticipated resales. But that's a small fraction of added value for most artists, and it's coming at a level of indirection that means ticket sellers are incentivized to raise fees to their highest possible levels after artists get paid, because that's pure profit for them. I think it's entirely reasonable to believe that artists aren't happy about this payment structure, even if they do see slightly higher show income as a result, and want a range of fans to be able to attend their shows.

I understood there is no difference between what the comment I replied to is describing and what its parent is, because of the (brought by others elsewhere in the thread) fungibility of money. Whether the artists get their cut directly, or just enjoy cheaper venues because Ticketmaster happens to be owned by the same party that owns the venue, that's literally the same benefit - just instead of being paid directly, the artists get their expenses covered. That's my understanding of what's going on with plenty of those deals.

Artists don’t pay for venues, promoters do, so they’re not cheaper, but your point that Ticketmaster has more revenue (and thus more to pay the artist) so they may get paid more indirectly is valid. But also, Ticketmaster has a monopsony. Or nearly so. One might argue (and many artists have ) that the artists would get paid more if there were a market for their tour rather than one company owning the vast majority of large venues.

The only things I’m sure of are that A. consumers would benefit if there was an actual market and B. It is hard to imagine one happening without government intervention.

> One might argue (and many artists have ) that the artists would get paid more if there were a market for their tour rather than one company owning the vast majority of large venues.

I think that's where the "reputation laundering" angle comes into play. With its unique position, Ticketmaster gives artists plausible deniability. "Nothing we can do about it", "evils of capitalism", "a monopolist captured the market, government doing nothing", etc. - say artists, for whom the image they project is a core part of their market value. With a properly functioning competitive market, those same artists would have to either get much less, or answer some inconvenient question about ticket pricing.

Yes that’s true but also, one may argue, as Pearl Jam did in court, that Ticketmaster has a monopoly on ticket sales and this hurts Artist revenues. Artists would get more from those fees if they could negotiate with multiple different ticket sellers. And that was before TM merged with Live Nation which is also now the exclusive promoter at most of the biggest venues in the world, and by most, I mean over 2/3.

It’s a monopsony.

The only real winners are Ticketmaster live nation

Definitely not an accident, no.

Nope Ticketmaster shares fees with its clients, this is from the Ticketmaster help...

-----

The standard tickets sold on Ticketmaster are owned by our clients (venues, sports teams or other event promoters) who determine the number of tickets to be sold and set the face value price.

...

Ticket fees (which can include a service fee, order processing fee and sometimes a delivery fee) are determined in collaboration with our clients. In exchange for the rights to sell their tickets, our clients typically share in a portion of the fees we collect.

...

Service Fee and Order Processing Fee

In almost all cases, Ticketmaster adds a service fee (also known as a convenience charge) to the face value price, or in the case of a resale ticket to the listing price, of each ticket. The service fee varies by event based on our agreement with each individual client.

In addition to the per ticket service fee, an order processing fee is typically charged. Unlike the service charge, which is added to each ticket, the processing fee is charged once for each order. The processing fee offsets the costs of ticket handling, shipping and support and as a result, the processing fee is generally not charged on in-person box office purchases. In some cases, Ticketmaster's order processing costs may be lower than the order processing fee. In those cases, Ticketmaster may earn a profit on the order processing fee.

In both cases, these fees are collected by Ticketmaster and typically shared with our clients.

Right, their clients aren’t artists. They’re the venues or promoters who signed with them, and the promoter is usually LiveNation, who owns them. Sometimes the venue is too.

That’s exactly what I said. They pay for exclusive ticket sales. They’re just defining “client” as who they pay and notice they do not say artist, which they surely would if they ever did.

Aren't sports teams 'artists'?

No, but they are often venue owners, as I mentioned. That’s why TM pays them.

Ticketmaster is mostly in the business of being the company that everyone hates so the artists can pretend to be helpless and of the people.

Just like the job of every sports league president isn’t to keep the fans (or the players) happy. It’s to distract anger from the team owners.

No. LiveNation is mostly in the business of signing deals with large venues to be the exclusive promoter of shows, and Ticketmaster thus is their exclusive ticket seller. Ticketmaster also sign deals with other promoters to be their exclusive ticket outlet, so even in instances where LiveNation isn't the promoter, you may have to deal with TM.

Artists do not get most of the money from Ticketmaster fees.

Yes, most go to the venue, which the artist/producer would have had to pay for (from the ticket price) otherwise. Because money is fungible it doesn't really matter if they pay the artist, or if they pay for the artist's expenses.

What matters is how much fees they charge and how much do they keep. Can't find it right now, but I remember an article claiming they rarely keep 50% of their fees.

I don't have a source but I've read the same thing; that a lot of what ticket master takes in is getting bounced around. It's a view I find very plausible intuitively. The artists (esp. the "name" artists) have all or nearly all of the leverage - whatever the ticket costs above what you'd paid if you bought at the gate is money they're leaving on the table.

It’s not just Ticketmaster.

Many “event platforms” allow you to add fees that cover the credit card percentage, but if they’re higher you just get to keep the extra.

Generally there's a promoter in the middle. They sign the artist and then have a deal signed with their ticketing partner. They'll then sign contracts with venues for the given tour. The contracts between promoters and ticketing agencies vary a lot depending on the country but that's how it often works in the states.

The "face value" (base price) will usually be determined between the artist and promoter, the venue will apply a fairly generic fee on top, as will the ticketing provider.

How much of the face value goes to the artist will depend on their leverage in the contract with their promoter. This is usually best improved by the confidence that the venue will sell out, meaning artists with bigger audience and social media presence will usually get the best terms.

I don't have a paper or article I can link to as a source, but I have experience in the industry.

That's not at all how concert economics work, I just wrote a long comment explaining.

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