Monday, March 15, 2010

Who Sets The Prices For Concert Tickets

You would think that the band/performer set the price of tickets, but unfortunately that is no longer the case. Managers, promoters, venues, and ticketing agencies all have a hand in it now. It makes you miss the good old days of seeing your favorite band play at the local bar.

Recently I hopped online to price tickets for Dave Matthews Band. This summer I wanted to attend a lot of their shows as a way to play catch up since I got into the band so late. They were performing at several venues within a 3-hour drive from my house, so I figured why not do a road trip? I was excited by the idea of travelling to see the band play different venues and to see them in different settings. Then I saw the ticket prices.

$50 for lawn seats at most venues and between $70 - $80 for actual seats (all before fees). What the hell was that? That’s not Dave Matthews Band, they ALWAYS kept their prices low and affordable for fans. That made me start to wonder, just who is setting the ticket prices for these concerts? I can’t imagine DMB charging that much for their concert, when just a couple of years ago, their most expensive ticket was under $50. I wanted to know if I should get mad at the band or if there are other factors involved.

Guaranteed Payments
Lately, the big thing in the concert industry is signing a hot artist to exclusive rights. Concert promoters like Live Nation and AEG salivate at the opportunity to get a top name act to deal exclusively with them. Madonna, Nickelback, Jay-Z, U2, and other acts have all signed on for this. For the artists, it’s almost a no-brainer; they are guaranteed millions of dollars whether they sell out venues or not.

Unfortunately, for the fans, these exclusive contracts are not so great. Now the promoter gets to set the price on the tickets, the merchandise, and they get to determine where the concerts will be held. Granted, the band negotiates the ticket prices before signing the contract with the promoter, but every new contract sees ticket prices rising, meaning the promoters are winning the war.

Since each promoter has a lock on certain venues, it means that if a band like Nickleback is coming to your town, there is only one arena they are going to perform at. It also means that the good seats are going to cost quite a few dollars, and if the scalpers get a hold of them, you can almost double that price.

The Concert Promoter
The concert promoter may agree to a fixed payment with the musicians for their performance and then any money left after costs is theirs to keep. The promoter also covers the bands expenses for the concert (or the tour) and the only way they can recoup that cost is through the ticket sales.

The promoter promotes the artist to the venue to book the gig, then promotes the artist to the fans to get the tickets sold. Even big acts need to convince the venue that they will sell out and that it would be good for the venue to have them there.

Below is a quote I found online from a book about breaking into concert promotion (www.concertpromotions.net):

“It's easy to overlook that concerts are actually part of the same industry as weddings, conferences, conventions, and seminars. The event planning industry comprises all of these and more.”

While that is irritating and aggravating, it’s also true. Concert promotion is a business, and while we love our favorite artists and live for the chance to see them live in concert, the simple truth is that they are entertainers, just like actors/actresses, comedians, and other types of live entertainment. It is a business and a successful one at that.

However, it’s a double-edged sword. The bands don’t want to rip off their fans, but the more popular they become, the larger the venue they need to perform at. The larger the venue (and sub sequentially the tour) the more promoters are involved. They have to be, because they own exclusive negotiating rights with the venue.

The Tiered System
Unlike attending an up and coming (or on the way down) band at a local club like the Starland Ballroom, seeing a major act is not a one low price for all. If you want good seats expect to pay. If you want great seats expect to pay more. And then expect to pay the fees on top of that.

The recent phenomenon in the concert world is the tiered system. Promoters know that not all fans can afford to pay a high price for concert tickets (especially these days), so they came up with a tiered system where the better the seat, the higher the price. This can range from $25 on the low end (RE: nose bleed or lawn) to $250 for the best seats in the house, depending on the entertainer.

The Future Of Concerts
So, what does this all mean? It’s obvious that this practice isn’t going to change anytime soon. Bands need promoters to handle the preparation of their long tours, so they can focus on practicing and creating great music that the fans will love. Unfortunately, the promoters are getting greedier and greedier as each year passes. These big national promotion companies are like the health insurance industry or the bank industry – they see an opportunity for a lot of money and they exploit it. And just like the insurance industry and the banking industry, the customers are left footing the bill. There is no hope to seeing this change anytime in the near future. As bands get bigger and bigger, adding more and more fans, concert promoters are going to charge more for tickets. It’s an unfortunate truth to the new way of seeing concerts.
For me, this means going to more club shows and if there’s a band that I really want to see, I have to sit in the bad seats, or miss them completely. For Dave Matthews Band, I’m going to try and scrape together the cash to see one of their shows this summer, but the chance of me seeing multiple shows are slim to none. I can’t justify going into major debt just to see a band perform live, no matter how much I love them.

What are your thoughts? Comments are open. Feel free to post some.

15 comments:

Zack said...

I don't see how this is different from any other industry abiding by the rules of capitalism. The prices grow as demand grows. There ARE fans who can afford to pay higher ticket costs.

If DMB managed to succeed in keeping the prices low, you could end up missing out on the concert(s) you wanted to see anyway, simply because they were snatched up too quickly by people with more free time than you. I would find this situation a lot more frustrating than being unable to afford it in the first case. Guess you can't have your cake and eat it too.

Remember that the promoters are doing a good thing for the consumer in the end. As you said, their service allows the band more time to do what they do best, which ultimately has a positive effect on fans and consumers.

On a small tangent, I find it ironic that a rant against exploiting opportunities for money is followed up with a spambot ad in the comments. :)

Thank you for the read!

Anonymous said...

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Anonymous said...

Ah this makes more sense to me now. Ty.

Anonymous said...

Lady Gaga tickets Denver,CO-$126 each that was the minimum. RAPE!!!

Unknown said...

As with anything, the value of a thing is determined solely by someone's willingness to pay for said thing.

Anonymous said...

Nice opinion article. I don't think much can be done about high ticket prices. Efforts should be focused on ticket scalping. At the moment this is not happening, look at GetMeIn, Ticketmaster's legal-black market!

Unknown said...

$160 for one person to see one singer in a show that lasts less than an hour and a half!! Unfortunately, that means I won't be able to go... :(

ashrpblond said...

im sorry something needs to be done anyone that would pay 259 to sit behind the stage and see nothing there is a problem. everyone needs to boycott concerts till prices drop i remember if you paid 300 for a ticket you were in the front row and meeting the artist not in nose bleed country

Anonymous said...

I get so sick hearing about the "law" of supply and demand. Some people treat it like it is something immutable like the law of gravity or the laws of physics. The "law" of supply and demand is not a natural law at all but one that was made up by those who want an excuse to charge more money for things. In other words, greedy people. I agree with the person who said we should boycott concerts until the prices drop. I just looked at concert tickets for two well known musicians and tickets to see one ranged between $35 to $75 (reasonable) and tickets to see the other performer ranged between $145 to $275 (unreasonable.) Both concerts are scheduled at the same venue. The only explanation for the higher priced tickets is pure greed. If you can call greed "pure."

Anonymous said...

I purchaed tickets for Barry Manilow for his Broadway concert for August 3rd. I purchased advance sales tickets with Citi, so I would be sure to get tickets. I paid $159 each for seats in the back mazzaine, which was fine because I wanted to see him. Went back over the weekend, and seats in the same area are going for $69. Phoned tickemaster, Citi and Barry Manilow and they informed me the promoter sets the price I really got ripped off. The orchestra seats are going for $109. Gone to many of his concerts , never ever been ripped off. Not happy :( I alwsys thought the performer sets the price, I guess not Beware !!!

Unknown said...

Until folks stand up to promoters and boycott these prices nothing will change. I will not be going to see DMB or the Eagles, over $2,000 a ticket to sit at the back on the floor. People are idiots to pay this and that drives the insane cost. We watched a 3 hour Eagles concert in our underwear today for free works for me. I will take the money and go on a nice vacation lol.

Unknown said...

126.00 is cheap ticket

Wendybird515 said...

$700 for floor seats to see the Eagles at Boston Garden. I’m glad the band doesn’t set the price. It’s disgusting. Thanks for clearing that up!

Anonymous said...

Interesting post. The thing is, people still pay. So maybe the way to get prices to eventually lower, is to stop going. Don’t pay the high prices. I don’t know. Just a thought.

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