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Comment by chongli | Hacker News Reader

Ticketmaster provides a valuable service for the associated acts:

Reputation shield

If artists started charging fair market prices for their tickets the fans would go ballistic and the artists' reputations would be severely damaged. By ostensibly selling the tickets below, even if normal people never get to buy them at face value, they outsource the reputation damage to Ticketmaster. Since Ticketmaster already has a detestable reputation, they are well-equipped to provide this service with minimal damage to their brand. In exchange, Ticketmaster pays a portion of their revenues to the promoters and their associated acts. It's a win win: artists get more money without damaging their credibility with their fans.

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I'm confused, so like an artist would be paying 80% of his potential revenue ($100 vs. $500) in return for reputation shield? That's how valuable this service is?

On a $50 ticket there is usually $20 in added “Ticketmaster” fees that go to the promoter and artist. That 40% increase is what Ticketmaster protects - the scalping sites mostly make money for scalpers, and also to unscrupulous venues who hoard tickets.

Artists' reputations may take a hit if they price their tickets overly high, as it's seen as gouging fans. Instead, Ticketmaster charged multiple hidden fees for each ticket, often including a venue fee, service fees, and other interestingly named fees that are different based on the event, venue, and tour (although all events in some tours might have a similar fee, some some venues might have a similar priced venue fee across all events...).

Some of these are collected and go right back to the artist, promoter and venue. Fans are unhappy about this, but they place the blame on Ticketmaster, not the artist or venue. This is the reputation shield Ticketmaster offers. They take the blame for higher prices while passing a lot of those fees back to the artist and venue. They take a cut for processing the order, and probably a higher than normal cut for taking the negative PR, but both Ticketmaster and the artists and venues make more money in the end.

Yes, I recall hearing this reputation shielding explained on Freakonomics:

http://freakonomics.com/podcast/live-event-ticket-market-scr...

The kickbacks go mostly to the venues who then write Ticketmaster into their contracts, making it really hard for artists to find somewhere to play without Ticketmaster being the manditory ticketing provider.

Imagine if you charge 10 times more a fan from a rich city than the fan of other cities? They would feel discriminated.

You should check out how much tickets to the Taj Mahal cost based on where you're from.

Is it possible that charging fair market value would torpedo a performer's reputation so badly that they can't sell tickets at all anymore? The industry is very competitive, so maybe they're afraid fans would abandon them for some other performer?

If so, then 20% of something is better than 100% (or any percentage) of nothing.

Or maybe they are looking at the total revenue picture, of which concert ticket sales are only one part, the others being record sales, private shows (at corporate events), TV appearances, and springboarding from musician into other entertainment roles like acting. Losing some money in one area out of all those might be cheap insurance to protect the others.

Before Ticketmaster, you could go to or call the box office and reliably get tickets to shows in your own city. Now I have to buy them from scalpers in Canada. Ticketmaster artificially expanded the market and used its leverage to force venues into exclusive deals. It's got nothing to do with "market price".

Edit: Also artists get a cut of the bar and to sell their merch. Also also, there is a massive range of costs of tickets already. It's really not a market price issue for tickets.

How are the artists getting more money from secondary market? That's like saying an author gets royalties from a used book store.

By getting kickbacks from Ticketmaster.

[citation needed]*

*I'm not implying this isn't true, and it's interesting if it is.

It’s in the article

Do you mind highlighting the line? (Not doubting you. I see where TM benefits. Just not how artists do.)

> That's like saying an author gets royalties from a used book store.

It's like saying an author gets royalties from a "used" book store that is able to sell a pristine version for no extra cost for every resale it makes, but it requires opt-in from the author.

TM+ doesn't just resell tickets, It's opt-in only and artist and venue opt in, it actually reissues new tickets, with new barcodes, to the purchaser with a guarantee.

It would not surprise me at all if the resale system gave a percentage of the profit back to those who opt in, to incentivize them to do so.

>It would not surprise me at all if the resale system gave a percentage of the profit back to those who opt in

This is basically the core value concept of the entire secondary ticket industry...

Interesting point.

I always thought was to maximize ticket sales and leave fewer empty seats. (Not all concerts sell out). You have people that can pay for the convenience of buying later paying more. But the true fans get their tickets early.

It was noted by me when shooting an aerosmith concert that the first 2 or 4 rows were reserved for fan club members.

Lol, "fan club members" are just the subset of ticket brokers who have figured out how to gain membership into that fan club...

Probably true.. but this was in the 90s before the internet changed ticket buying...

My Brother was in the DMB fan club and was able to score good tickets. We got into Phish NYE shows the same way.

Why aren't things getting better....?

These is seemingly getting less common. Not at all uncommon to see $1000+ VIP packages for major tours these days

Perhaps strange to most of us, $1000+ is not near the full price a VIP package might bear in the current market.

If you are seeing primary market prices of $1k for a VIP package, you can be assured these same packages are going for $3-4k direct to brokers, and $5k+ on secondary markets to buyers.

I saw a $35k (for two) VIP package last year. Bonkers.

Those are separate things. The VIP/Premium tickets are a way to do dynamic pricing without looking like you're proving too many price levels. The extra fees are a way to show lower prices and let the fallout for the end price fall on another group. I outlined a lot of this with real data in another comment here. Just search for "mccartney" in the comments here.

They are - but, where, say, 5-10 years ago VIP might only be the front couple of rows, for some tours now it might entire sections, especially on the floor.

Yes. But it's not the artists who are in control. It's the event promoters, yes? That is, the band names it's price. A promoter books the band, picks the venue, markets the event, and sets the ticket price. If the tickets are underpriced it's the event promoter who is getting hurt the most.

But when the artist demands a certain payout, and the only way the promoter can make the numbers work is to set a "face value" $X, offer 15% of inventory at $X on the open sale, and then offload everything else directly to ticker brokers at various tiers of price points at several multiples of X, you have to start to put at least _some_ of the blame on the artists for knowingly participating in a "don't ask don't tell" style industry...

Perhaps. But then where do the bands make money? From their Spotify streaming royalties? That's not enough to buy coffee.

In other words, free (or historically close to it) music comes at a price. If you calculate what is __not__ being spent on listening to music, I suspect you'll see that decline made up for via touring / ticket prices.

> But then where do the bands make money?

From requiring a larger payout in the beginning, which started the proposed scenario.

But that's not the start in my scenario. It's the end. It's a symptom. It's the result of what happens upstream in the broader biz model of being a band / musician.

With their revenue streams limited (read: streaming doesn't pay anything close to the way physical media did) they're all but forced to require a larger payout. If they don't get it there, then where? When?

Think of it this way, every time you stream a song for free the cost of that band's live concert ticket goes up a bit.

The problem is that artists don't make money if they sold a ticket for 50 and a scalper re sold for 500.

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