One more time: Ticketmaster does NOT set the price of concert tickets!

[This was my column for GlobalNews.ca. – AC]

It happened twice in the last couple of weeks.

The first time, it was a guest column in The Globe and Mail entitled “I fought Ticketmaster, and Ticketmaster won.” Over the next 869 words, the writer bemoaned the difficulties she had getting tickets to hot shows by Taylor Swift, Bad Bunny, and Beyonce.

All the gigs were sold out. In other words, there were more bums than seats for these shows. With demand sky-high, the price of tickets on the secondary market followed suit following the laws of supply and demand. We deal with that basic of capitalism every single day.

The author also spelled out a litany of grievances against Ticketmaster: The bait-and-switch of dynamic prices; allegations (still not tested in court) of the company colluding with scalpers; alleged pressure on small venues to use Ticketmaster to sell tickets or face retaliation; the “scam” of “official platinum seats.” She then outlined her method of tracking ticket prices on a spreadsheet in hopes of cracking some kind of code when it came to finding the best price on the resale market.

After all this work, she’s disappointed and angry that concert tickets are, yes, expensive. She concludes, “Ticketmaster is making money hand over fist while fans’ hearts break and the majority of musicians struggle. As live music grows increasingly unaffordable, we’re losing something priceless.” Ticketmaster is the villain of her tale.

The second story involved ticket sales for a Lana Del Rey tour of the U.K. When presales began, fans complained that tickets were insanely expensive with some general admission tickets going for more than £400. Hundreds took to social media to blame Ticketmaster. The company was responsible for gouging the public. Someone needed to be blamed, so it had to be the ticket seller, right?

Hang on. It seems that we need a refresher course in the economics and protocols of the concert ticketing industry. We can do this in a few easy lessons. You might want to print this out and pin it to the refrigerator door for the next time a concert ticket is out of reach.

Lesson 1: Fewer and fewer artists can sustain a career just by selling music. The majority of revenue now comes from hitting the road and playing live.

Lesson 2: Because everyone is hitting the road, the cost of touring has gone up beyond the rate of inflation. There’s more demand for staging, lights, video screens, sound gear, roadies, buses, trucks, special effects, hotel rooms, and all the materials involved in equipping a modern tour.

More demand means higher costs to the artist and the promoter. All those costs have to be recouped in the price of the face value of a ticket. Tours are carefully laid out with P/L predictions, cost contingencies, insurance, and other fail-safe financial instruments. With margins so tight, even a single canceled or undersold concert can tip a tour into the red.

Lesson 3: People now expect a spectacle when they go to a concert. There’d better be all kinds of special effects, pyro, dancers, costume changes, perfect sound, dazzling lights. The show needs to be an overwhelming experience for all the senses and extend through at least two hours, preferably more. And there had better be an excellent opening act or two. All that costs money.

Lesson 4: The price of a concert ticket has to cover the costs of a show and provide at least a bit of a profit for the artist and those staging the concert.

Lesson 5: Ticketmaster doesn’t have anything to do with setting the face value of a concert ticket. In fact, nothing from that face value price goes to Ticketmaster. The only way the company makes money is through the Ticketmaster service fee. This is also how the company covers all its costs for its computerized ticketing system, which is a complex, expensive, and ever-evolving R&D mission.

Here’s the truth.

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