Dynamic pricing isn't the issue here, the issue is that the extra profits generated by dynamic pricing are going to ticketmaster rather than to artists.
If artists took home the extra profits, there would be more incentive for the market to provide more quality artists, more concerts, and cheaper prices, supply would meet demand.
But since the profits go to ticketmaster, ticketmaster might not even have higher total earnings if it increased supply, as prices might decrease faster. Higher supply of concerts would also give opportunities for competitors to ticketmaster to emerge, as it would have to control a bigger market.
Ticketmaster's primary value prop is a heat shield for artists. The artists get to blame Ticketmaster while charging the highest market clearing price, and Ticketmaster gets to make a nice profit being the 'bad guys'.
If the status quo was really a problem for the big artists (not all) then alternatives would emerge.
The article doesn't say this at all. In fact it says the artists are making a lot of money here (though I can't find any details on rev-share or anything).
> Ticketmaster has done something that is very lucrative for itself and for artists, but also worse for the average fan: It has simply jacked up ticket prices for certain high-profile events to a level where all tickets are more-or-less priced at the maximum level that the secondary market would normally bear
I don't really understand how it is worse for the average fan. It's worse for the average fan who might have won the lottery in getting a face-value ticket, but on average, the average fan doesn't actually get a face-value ticket even if scalping didn't happen, since demand >> supply, so nothing is different for them.
Generally, tickets sell out immediately, and then scalpers set the price. The average fan has very little chance to get a face-value ticket since they are gone as soon as they're released. You also have the situation where the average fan who gets lucky with a ticket then has to do the calculus of "I got lucky buying 4x$55 tickets, should I sell them $7k instead of going to the show?"
On the face of it Ticketmaster has very little incentive to pay artists more. They have an effective monopoly on large venues and ticket sales at this point, not to mention radio advertising and promotion, so it's not like the artists have a competitor to switch to. It's not like Blink-182 is going to just stop touring.
Once you get big enough you are pretty much forced to get into bed with Ticketmaster and take whatever deal they offer.
The tickets are owned by the promoter. The promoter is one who pays the artist.
People often underestimate how risky live events are, as whey they think about a concert they think about U2, Jay Z or other major artists.
In reality, less than 50% of live events sell out.
And there's a fair bit of risk in putting them on. You need to layout the initial capital for things like venues (far from cheaps) and artists often want to get paid a minimum amount, regardless of ticket sales. The promoter needs to figure out how to market & get butts in seats -- including how to effectively price tickets, etc.
Artists typically don't want to deal with all that. They just want to produce their art.
There are so many comments in here saying dynamic pricing is screwing over artists but it seems like a huge win for them since it doesn't result in tickets being sold in secondary markets where they can't capture the margins.
Mark Hoppus has a complaint about the _experience_ of dynamic pricing but note that he isn't complaining about the actual prices.
It's impossible to know. Ticketmaster is opaque and the artists are under NDAs. However, if you think about it logically what incentive does Ticketmaster have to pass on the profits to the artists? The deck is hugely stacked in their favor and the artists don't have a lot to negotiate with. It's not like they're going to switch to a competitor. The most they can do is threaten to not tour or tour only in small to medium venues--and even those medium venues are getting gobbled up by TM.
To be fair, I'm sure artists like Blink-182 are still getting a decent chunk of change from the tour, especially from merch sales. But I also think Ticketmaster/Livenation is feeing them like mad and walking away with the lion's share of the revenue.
They own some venues, but certainly not "most" of them. Think about who owns all of the sports stadiums in your city (the ones where mega artists would play), it's not TM.
It is very convenient for venue owners to let TM handle ticketing for the events. TM handles more than just sports and concert tickets. Since so many forms of live entertainment use TM, the company can bring in a lot of events to fill in off-season time. So an arena can host basketball & concerts on the weekend, then fill the weekdays with minor things like dirt bike races.
No, Live Nation owns/leases small/midsize places like House of Blues. But they don't own the Honda Center. That's owned by the City of Anaheim. When Jay Z comes to down, he's not playing the House of Blues.
This situation repeats in practically every major metro. The massive arenas are probably owned by the city, or maybe the owner of the team that plays in them.
Which goes back into my argument, they own some venues. But not all of them, and certainly not the major arenas that mega artists play in.
Stadiums are generally owned by the team(s) that play in them and/or the city. Live Nation doesn’t own any stadiums that I’m aware of, but they do own Ticketmaster.
AEG/AXS owns a number of large venues like the Oakland Coliseum + Arena, LA Crypto.com arena, and London O2. Presumably those are ticketed through AXS rather than Live Nation/Ticketmaster.
An interesting thing about AXS tickets is that they are presented using a smartphone app and are only valid for something like 60s before they need to be refreshed. This presumably makes tickets harder to resell outside of AXS's system.
If I wanted tickets to blink182 I'd DDG blink182, which obviously has blink182.com as the top result.
I'd then click "book tickets". That might be a link to ticketmaster, but it could be a link to seetickets or any other ticket system.
If blink182 used seetickets, and I wanted to go to their concert, even if I went to ticketmaster, once I found that I couldn't buy a ticket, I'd go elsewhere.
A typical artist deal with a promoter would include an 85% (artist) / 15% split of profit after a pre-negotiated split point which covers the costs of producing & marketing a show for the promoter. I've never seen a full LiveNation tour agreement and perhaps they could have bought out Blink for each show with a different style deal but I'd be surprised if that still didn't include some upside for dynamic pricing otherwise why would the artist ever agree to do it? Everyone knows $600 tickets aren't exactly popular but this is a business and if that's what they're going for a secondaries anyway it's better for the artist to collect the cash in my opinion.
The key point is the ondemand pricing is not included in artist's take home generally.
Why use Live Nation? As Pearl Jam has taught us: Artists are limited by venues and venues are either owned or have a deal with live nation. Not going through ticketmaster/live nation means not playing the Gardens in New York or most other large venues where you will have to settle for a warehouse in Jersey instead. A huge monopoly exists that requires an uber like attack on the industry or government intervention.
that's the whole point of the complaint about Ticket Master. The artist's don't really have a choice in the matter. What are they going to do? go somewhere else?
> The Blink-182 tour, it should be noted, is “produced” by Live Nation, according to the Live Nation press release announcing the tour. In the U.S., they are playing almost exclusively Live Nation venues (in Blink-182’s hometown, San Diego, they are playing at the Pechanga Arena, a venue that is operated by AXS, which is a different company.) The tickets for all shows besides the San Diego one are being handled by Ticketmaster. The press release announcing the tour does not list any prices.
> issue is that the extra profits generated by dynamic pricing are going to ticketmaster rather than to artists
Ticketmaster claims "promoters and artist representatives set pricing strategy and price range parameters on all tickets, including dynamic and fixed price points" [1].
I don't know how it all works behind the scenes but my guess is that artists just dont want to be blamed for charging their fans a ton?
Ultimately if one ticketing company offers a band 200k to perform a night and another company offers 150k then every band is going to go with the 200k - even if there is a dynamic pricing model for the fans.
The last time I bought concert tickets it was through Vivid Seats. The last NFL game I went to was through StubHub.
Its my understanding that some NFL actually has an official deal to sell through Ticketmaster first - though presumably any of these other companies could have that deal if they paid the NFL more.
FWIW I do think ticket convenience fees should be eliminated (or made so they have to be listed upfront) and this would be good for transparency - but I am also pretty sure that doing so would ultimately just raise listed prices.
From what I can tell, using Ticketmaster's dynamic pricing is a choice the artist can make (or the artist's company, or some business entity), and assuming the artist's contract is such that they get a percentage of ticket sales, the ticket price is the dynamically calculated price, so the artist does get more money for a dynamically priced seat.
If the artist chooses not to partner with ticketmaster, they will just buy the tickets at retail and scalp them. This is why you hear about so many shows selling out in the first five minutes. It's not real people buying them, it's ticketmaster bots.
0. The tickets not sold by TicketMaster dynamics pricing are resold on StubHub. (Aka TicketMaster)
TicketMaster can extort the performer for a bigger cut because if the performer takes no action, TicketMaster gets the resale, and the performer gets nothing. TicketMaster owns the data, so they can negotiate the dynamic royalty more efficiently and get a yield better than resale.
Ticket Master charged you to print out your own tickets and you think it's unlikely they are keeping more profits? I'm sure the artist is getting more this way through their standard percentage so they see it as win too either way
So what are performers saying? Assuming they're allowed to say anything. Live Nation Entertainment, Inc. (ticker symbol LYV) often acts as the artist's agent, as well as the venue's agent and the ticketing service. Performers are now contract employees of Live Nation. So they may not be allowed to criticize Live Nation.
The funny thing is, LYV, having achieved a near monopoly over ticketing, venues, and performers, loses money.
Why do artists sign with TM / Live Nation? Because they know Live Nation will make them the most money for the least hassle and risk. Artists may also lack a little creativity on what a fan experience looks like. more on that below.
I dislike Ticketmaster as much as the next person, but no one is holding a gun to Blink-182 to come out and perform in a nationwide tour with TM taking all the upside. I just can't fathom that negotiation taking place, unless TM was also guaranteeing revenue to the band, i.e. taking downside risk. Theres no point to that. Also, yes, LiveNation controls an impressive number of venues, but they dont control all the venues, not be a long shot. If the TM deal was such a raw deal for artists, nothing prevents artists from just hosting their own concerts in publicly owned venues, setting up longer term performance residences in interesting locations, or expanding the fan experience from the tired formula of "opener act, 2x 1-hour sets, and an encore" to something better like a collaborative fan experience over a whole weekend. Plenty of opportunity for creativity on the artist's part that would make the artist less money in a night but yield a potentially waaaay better lifestyle and creative process.
At the end of it, Live Nation is a publicly traded company, but not a very attractive one. Lots of debt, rapidly increasing labor costs on the event hosting side, household budgets getting a major squeeze which will impact entertainment spend.
You do understand that Ticketmaster has an effective monopoly and has a past history of sketchy business practices. I certainly wouldn't be surprised if they pocketed it themselves or a large majority of it. It would be completely congruent with their business practices.
Yeah I know TM is sketchy and monopolistic. That doesn't mean they have the leverage to take 90% of the money for themselves. The artists would raise the face value of their tickets to recapture it if it were as simple as that.
We don't know what the details are on how the money is divvied up, but I do know that artists must be getting upside on this dynamic pricing.
> That doesn't mean they have the leverage to take 90% of the money for themselves
Listen, that's exactly what they have. The music business mostly exists to screw artists out of money made from their work, probably more now than ever.
The artist signs a contract to pay for X dollars, that's what they get and they have no leverage whatsoever to go after that upside. Ticketmaster would have to share the data about the dynamic pricing in the first place and they are NOT doing that.
Depends how it works, just as an example (not what they are doing) if ticket master guarantees X seats for Y price. Then the band might be fine with ticket master doing what every they wish -- there's no risk to the band.
Granted the band probably negotiated minimums and a cut. Remember, you also have the venue, security, traffic, marketing, etc. There's a lot involved with these kind of events.
If an artist wants to play a big venue and make money by volume, then they need to grin and bear it.
Because TicketMaster/LiveNation own most of the large music venues in the country. And if you don't use them in a "vertical stack" you don't get to play those venues.
And even at $50/ticket, you make money a lot faster in a 25,000 seat arena than you do trying to play 15 nights at an "intimate" theater (hey, guess what, TM/LN own a huge swathe of those too).
We complain on HN about tech "monopolies" (or debate their existence, at least). TM/LN is a much larger effective monopoly that, to my knowledge, has not had any real investigation.
> Pearl Jam and Bruce Springsteen will tell you a similar story
Springsteen's team is defending dynamic pricing [1], with Ticketmaster claiming "promoters and artist representatives set pricing strategy and price range parameters on all tickets, including dynamic and fixed price points."
> extra profits generated by dynamic pricing are going to ticketmaster rather than to artists.
Yeah I don’t think that’s true?
My understanding is that even a portion of the “service fee” TM charges also goes to the artists.
One of the most important services that TM provides is they are a scape goat. Artists can charge crazy high prices and TM takes the blame. They’re willing to be the bad guy.
The money is split between Ticketmaster, venue, promoter, and artist.
Can you provide any numbers of any kind? I certainly can’t find specifics. So it’s no evidence versus no evidence.
I know TM has a near monopoly. But I personally think they have that monopoly because they’re willing to be the bad guy everyone blames for high ticket prices.
I think logic dictates that artists would not opt-in to dynamic pricing, and yes it is optional, unless they see upside.
LiveNations quarterly earnings states: “With market-based pricing being widely adopted by most tours, we expect to shift over $500M from the secondary market to artists this year”. It’s hard to tell what percentage that is.
> extra profits generated by dynamic pricing are going to ticketmaster rather than to artists.
The artists get paid. Even back in the days "scalpers" were largely selling tickets that artists ear-marked to be sold at market prices. It gave them cover for high ticket prices by selling a few at "official" prices, while letting them earn market value on most tickets sold.
And anything the scalpers couldn't sell would be put back on ticketmaster at the official list price. And people would get an email about how they "found" more tickets to a show.
> Dynamic pricing isn't the issue here, the issue is that the extra profits generated by dynamic pricing are going to ticketmaster rather than to artists.
No.
This is just wrong. Pricing & fees are determined by the promoter and/or the artist. Ticketmaster takes a cut, but the tickets are owned by the promoter. The promoter has the final say in how revenue is shared with everyone -- including the artist & Ticketmaster.
> the issue is that the extra profits generated by dynamic pricing are going to ticketmaster rather than to artists.
the article doesn't say anything about this
> If artists took home the extra profits
Do you have any evidence to show that they do not? they definitely weren't under the previous model, because it was the secondary market where prices were getting set "dynamically". But now that it's happening in the primary market, aren't the artists paid out on a % basis?
I don’t see where is the problem with that. Artist jobs are to make great music and be great on the scene of concerts. And that’s where their value and money comes from. But their jobs is not to optimize prices and ticket sells or market them. That’s where Ticketmaster is good at and it’s normal for them to reap their own profit from their work.
Now what I don’t like is the monopoly however. That’s bad…
From an economic perspective, dynamic pricing maximizing total welfare. Those with the highest person values get to see the concert, without the middle-man making money.
> Dynamic pricing isn't the issue here, the issue is that the extra profits generated by dynamic pricing are going to ticketmaster rather than to artists.
If that's a problem for artists then why do artists chose to do business with ticketmaster? Selling tickets isn't exactly high tech...
Artists don't choose to work with Ticket master. Pearl Jam and the Justice Department tried to beat them some time ago. It's a great story to check out if you're curious about how this industry works.
I don't think most people know how the touring business works, or in general the music industry. TM has built an integrated monopoly that means if you want to play the one big venue your city likely has, you need to work with TM, which now means you likely have LN producing your entire tour.
We could say they choose Ticketmaster indirectly by choosing the venues that have exclusive Ticketmaster deals. Couldn't they pick non Ticketmaster venues if they thought those venues offered them a bad deal?
Between TicketMaster and LiveNation (same company) the number of non-affiliated venues is slim these days. Kikagaku Moyo just did their farewell tour and refused to use any TM venues forcing them to pretty much only play at smaller indie venues.
The reality of the matter is that a artist has much more to worry about than what Ticketmaster handles, and they provide a service that is useful, especially when it can all be rolled up into the "venue costs".
A typical city only has a single venue large enough for a group by Blink-182, Springsteen or Garth Brooks. They are almost universally TM affliated venues, and now with the LiveNation combo promote their own artists on LN-produced tours.
If artists took home the extra profits, there would be more incentive for the market to provide more quality artists, more concerts, and cheaper prices, supply would meet demand.
But since the profits go to ticketmaster, ticketmaster might not even have higher total earnings if it increased supply, as prices might decrease faster. Higher supply of concerts would also give opportunities for competitors to ticketmaster to emerge, as it would have to control a bigger market.