avatarAmol Shrikhande

Summary

When purchasing a concert ticket, the revenue is distributed among various parties including government taxes, ticketing companies, the venue, promoters, and the artist.

Abstract

The process of buying a concert ticket involves multiple stakeholders who each receive a portion of the ticket price. This includes government entities that levy taxes, ticketing companies that charge service and processing fees, the venue where the event is held, which collects a rental fee, promoters who facilitate the event and handle marketing, and finally, the artist or band who perform. The specifics of this revenue distribution can vary greatly due to differing contracts, but it generally involves a complex system where each party takes their cut after expenses are covered. The recent Taylor Swift Eras Tour has brought increased attention to the intricacies of ticket pricing and the various fees involved.

Opinions

  • There is a perception that the consolidation of ticketing companies, such as Live Nation/Ticketmaster, has led to higher fees and prices for consumers.
  • The article implies that the complexity of the ticketing ecosystem can lead to opaque pricing, with some fees being added late in the purchasing process.
  • The mention of Taylor Swift suggests that high-profile tours can drive public interest in understanding how ticket revenue is allocated.
  • There is an indication of discontent with the current ticketing model, where additional fees can significantly increase the overall cost of attending a concert.
  • The article acknowledges that artists, despite receiving a share of the ticket sales, have to cover numerous expenses, and some may receive a guaranteed minimum to avoid financial loss from a tour.

When I Buy a Concert Ticket, Who Gets Paid?

A quick breakdown of the mouths that get fed

Courtesy PublicDomainPictures (Pixabay)

Just as the COVID-19 pandemic made everyone an amateur virologist (some more amateur than others), the Taylor Swift Eras Tour has turned us all into ticket pricing analysts.

Here’s an extremely general breakdown of the mouths that are fed when you buy a concert ticket, keeping in mind that (a) this refers to large shows, and (b) specifics vary widely based on contracts and all that good stuff.

SOME SORT OF GOVERNMENT

Depending on the jurisdiction, some governmental entity (or entities) will get in on the action. It might be called sales tax, entertainment tax, or whatever. The point is that a little slice of the pie gets claimed here.

THE TICKETING COMPANY

The company issuing the tickets needs to cover its costs (and then some). That’s where service fees, processing fees, and the like come in. These can be a percentage of the ticket price or a flat fee, and some are shared with the other players in the mix.

Regardless, there has been a lot of groaning about the consolidation in this industry that has allowed such companies (like Live Nation/Ticketmaster) to charge whatever they want, often sneaking in the pain just prior to checkout.

THE VENUE

Obviously, the venue hosting the event deserves a cut (rental fee), especially if the specific agreement requires it to provide staffing, security, as-needed medical care, and so on. Liability insurance is also a must. Of course, there’s some double dipping going on, as the same Live Nation mentioned above owns and operates various venues.

THE PROMOTER

This is the outfit that links the artist to the venue in the first place, all the while going to great lengths to market the event and make sure that a massive number of details fall into place. Needless to say, we’re not talking about volunteer work. Oh, and Live Nation can wear this hat too.

THE ARTIST

And finally, when you buy a concert ticket, the artist gets the rest. Keep in mind, however, that large bands have to split the pot among several members (and perhaps a record label), that only after expenses have been accounted for — the manager, roadies, sound crew, transportation, lodging, production costs (which can get out of control), etc. In some deals, artists are offered a guaranteed minimum to ensure they don’t actually lose money on a show and/or tour.

The bottom line:

  1. It’s a complex ecosystem.
  2. Taylor Swift is making decent money.
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