What Is A Service Fee For Concert Tickets

For the August 2016 issue of Consumer Reports, the magazine'southward staff drew attention to what they called the "ticket fee frenzy" by dissecting the price of a floor-level seat at a Guns N' Roses concert taking place that summer in Kansas City, Missouri.

The ticket, which supposedly toll $250, would really be $300.75 later fees — in other words, 20 pct of the ticket's face value was tacked on in the grade of itemized fees with confusing names.

There was a $nineteen.fifty delivery fee to embrace expenses of mailing a ticket; a $4 facility charge set by the venue; a $4.25 guild processing fee shared between the ticket seller, Ticketmaster, and the customer, Live Nation, which happens to exist Ticketmaster's parent visitor; and a service fee, which was the largest, at $23. That money would go entirely to Ticketmaster.

While these detail numbers may be new to you lot if yous do not live in the Midwest and nourish canonical classic rock concerts, the gist is likely familiar. According to a study published by the Government Accountability Office in April 2018, the average ticket fee is now 27 percent of the ticket's face value, with some fees every bit loftier as 37 per centum. And Ticketmaster is regularly referred to every bit 1 of the nigh-hated companies in America — it'southward the largest online ticket seller by far and has been under monopoly scrutiny since its 2010 merger with Alive Nation, the country's largest promotion and venue company.

Fees of this size are a common source of confusion and ire. Close to 7,000 people wrote to the Federal Trade Commission (FTC) during an open-comment period nearly online ticket sales at the cease of last year. If the several dozen I read are any indication, they are generally i-annotation: "Stop the fees please," wrote Pat McCullough, from Ohio. "The fees are a gouge. Manifestly and simple," wrote TJ Platt from Arizona. Donald Bosseau, a man from California who had been organizing an outing with his church group of 27 people, said he was shocked past a 17 pct fee added to the cost of each ticket, and had to waste his time going around to everyone and request if they were okay with the higher toll. "As one member said subsequently canceling their seats — this sucks!"

While everyone seems to sympathise that the fees are both 1) very high and 2) seemingly nonsensical, information technology is less clear why they've been allowed to get this mode — and whether there'southward whatsoever chance at all that they might modify.

On Tuesday, the FTC hosted a 24-hour interval-long workshop about the ticketing industry, with a one-hr console about "The Adequacy of Ticket Price and Fee Disclosures." This may not sound like particularly thrilling content to you, only that's because you didn't watch it.

The panel was a mix of industry representatives — Ticketmaster, its smaller competitor Eventbrite, besides equally secondary market place retailers SeatGeek and StubHub — and consumer protection advocates from the Better Business Bureau and Consumer Reports. It also included MIT economist Sara Fisher Ellison.

It was moderated by Michael Ostheimer, an attorney for the FTC's advertising practices division. He was quite clearly underprepared for simply how much the American people hate online ticket retailers, and how dedicated they would exist to slipping their vitriol into the proceedings.

"Why are there all these dissimilar fees, Patti-Anne?" he read off of one question card (directed at Ticketmaster'south Patti-Anne Tarlton, an executive vice president present on the panel).

Minutes later, he started to read another — "Delight explicate how a 15-dollar convenience fee is fair" — and trailed off. "I think we've already covered that."

Someone in the audience stood up and yelled that they had been listening all solar day and would similar to say something. Ostheimer said no, sorry, he would exist using the preselected question cards. The next question was about unfair fees, and how the nutrient bachelor for purchase near the auditorium was marked up to "three times its market place value," and Ostheimer did non finish reading it. "I thought someone was filtering these questions, I'one thousand lamentable," he said, slightly glaring off-stage.

StubHub, represented by its in-house compliance counsel John Lawrence, quickly came under burn for the mode it presents its fees. The additional costs don't show up on StubHub'southward website until later on you've input personal information (name, email, phone number), then appear in small-scale impress at the bottom of the window asking for your payment information. If yous hit "Proceed" without scrolling to the bottom of that window, yous won't see them until the society confirmation page.

(I tested this out by pretending to buy a ticket to the National'due south Midweek concert in Brooklyn, New York, which was advertised at $66.50, but came out to $83.88 afterwards a $xiv.88 "service fee" and a $2.l "fulfillment fee.")

Asked why StubHub charges a "fulfillment fee" for tickets the customer prints out at habitation, Lawrence said that there'south a "apartment fee for PDF-type tickets because … the seller has to upload it." He also said that his company's experiment with showing "all-in pricing" at the beginning of the purchase process — presenting the full cost of the ticket including fees up front — only confused people and lost his company business concern.

"This is a textbook place where a regulator could make a big difference," MIT'south Sara Fisher Ellison chimed in, suggesting the FTC but mandate that all ticket sellers utilize the same up-front end all-in pricing and then that no one company would exist taking the risk of seeming more expensive than the others in Google search results. Essentially every person on the panel agreed, appearing to politely beg the FTC to regulate them so that people would like them once more.

Having all-in pricing on some platforms and non others is "also disruptive; it needs to be consequent across the marketplace," Consumer Reports' Anna Laitin argued. "That's the reason the StubHub experiment didn't work. If information technology were consistent, people would get used to that really fast and like knowing the toll they're going to pay." She as well, suggested that the FTC could but brand this a rule and save whatsoever one platform from having to go out on a limb.

Rep. Pascrell (D-NJ) Voices Opposition To Ticketmaster Live Nation Merger — Members of Congress and consumer rights groups fence against the Ticketmaster and Alive Nation merger in December 2009.

This is where Tarlton elected to speak up, saying that Ticketmaster ever makes disclosures about its fees and its "hundreds of competitors" don't. "In Canada, in that location hasn't been whatever enforcement," she said, which doesn't seem true because Canada's Competition Agency is suing Ticketmaster right now for deceptive "baste pricing." (That means the gradual adding on of additional costs throughout a purchasing process, which consumer protection bodies detest because it makes comparison shopping extremely hard.)

The whole affair took an 60 minutes, and at the terminate, in that location was no consensus on how to make ticket fees more than fair. Nothing was even on the table.

At no point during the console did it come up up that TicketMaster has been the subject of both state and federal authorities scrutiny — in more than i land — for years because of its fees. In 2016, for example, New York Land Attorney General Eric T. Schneiderman led an investigation into the online ticketing manufacture and announced that superfluous fees are "impermissible under the law" and "constitute evidence of abuse of monopoly ability."

And since early 2018, the Section of Justice has been investigating TicketMaster's parent company Live Nation for anticompetitive practices. Last Apr, the New York Times reported on complaints from venues that alleged Live Nation had threatened them for selling tickets through Ticketmaster'southward largest competitor AEG. "[The venues] were told they would lose valuable shows if Ticketmaster was not used as a vendor, a possible violation of antitrust law."

Obviously, we're used to paying fees anytime we buy tickets online. But they typically experience reasonable: Film tickets purchased through Fandango or through individual theater sites typically take an added convenience fee of $1.l to $2.50, which appear legitimately used for budget of the arrangement. AMC has its ain ticketing app, and a Facebook integration, only it still has to pay to process those transactions. If you're role of its Stubs A-List plan — a MoviePass-blazon service which costs $19.95 a month for up to three movies a calendar week — the fee is considered part of the subscription and you don't pay it once more.

Museums sometimes have fees of a dollar or two for ownership tickets online, and this makes sense likewise. Glitzier events — like Broadway shows and arena sports — take pretty loftier fees, but there's an odd premium placed on pop stars. According to the GAO study, while sporting outcome ticket fees average 20 percent of face value, concerts are fifty-fifty worse, averaging 30.

This is somewhat baffling, but we can intuit that Ticketmaster knows merely how dedicated fans are to seeing their favorite artists, and how much they tin can wring out of them in that moment of high-stakes desperation. Last twelvemonth, discussing Ticketmaster's Verified Fan program — which was criticized for asking fans to purchase merch in order to authorize to buy concert tickets — David Marcus, an executive vice president and the head of music at Ticketmaster told me, "Live entertainment, music, is emotional, and it's supposed to be. It'due south art. It'south supposed to be challenging." As if the style that fine art challenges us is past testing our abilities to make purchases on a monolith'south poorly designed website.

Information technology hasn't even been five years since Ticketmaster settled a class activity lawsuit requiring it to pay out $400 million to more than 50 million ticket buyers who were charged unexplained "club processing fees" and "UPS commitment fees" that weren't really spent on anything in particular. In improver to the huge payout, the company was compelled to add together disclosures on its website acknowledging that fees are a source of profit.

That lawsuit, originally filed in 2003 by angry Wilco and Bruce Springsteen fans, paid out everyone who had bought tickets on the Ticketmaster website betwixt Oct 21, 1999 and February 27, 2013. But it's worth nothing that this example was won considering the fees weren't disclosed. Not because they were considered predatorily loftier, or the product of an old-school monopoly getting away with whatever business organisation practices it likes.

Now that the state's largest promoter and venue owner and the country's largest ticket seller are ane visitor — permitted past the Obama administration's justice department to merge in 2010 — there's very little to hold these fees in check. As reporter David Dayen noted for the New Republic last year, virtually one-half of Live Nation'due south revenue comes from fees that are handled past its own subsidiary. This is non a heartwarming success story. "This shafting of consumers fed one of the largest CEO pay packages recorded in 2017. Michael [Rapino], CEO of Live Nation, made $seventy.6 meg last year, including $58.six 1000000 in stock," Dayen writes. (Meanwhile his employees make an average of effectually $24,000 a yr).

At the FTC meeting on Tuesday, the online ticketing industry insisted that it tin can't regulate itself, an insistence that has been backed up by its actions over the past xx years. In that location's non much cause to celebrate a row of executives saying "no, you go first" to each other because nobody wants to exist the kickoff to risk some profit in exchange for better business concern practices. If anything, we should exist glad that guy in the audience managed to yell a little flake.

Sign up for The Goods newsletter. Twice a week, we'll transport you the all-time Goods stories exploring what we buy, why we buy it, and why information technology matters.