Ticketmaster Says People Don't Like Service Fees Because We Don't Understand Them

from the I-don't-think-that's-it... dept

If you follow the music business, you probably already know about or follow Ticketmaster boss Irving Azoff’s Twitter feed, which he kicked off earlier this month by calling two different reporters “jerks,” and generally jousting with some of his critics. He went quiet for a bit, but caused a bit of a stir over the weekend by announcing (sort of) that Ticketmaster had “full disclosure pricing.” Considering just how much hatred there is towards Ticketmaster’s “service charges,” this certainly picked up some attention.


The only problem? While the tickets Azoff pointed to highlighted prices that included fees (amusingly, the fees on the cheapest ticket markup the official ticket price by a whopping 50%) some quickly discovered that this wasn’t, at all, what they expected. That’s because despite the implication that these prices now showed you full fees, some noticed another $6.50 fee tacked on at the end. After people pointed that out, Azoff again responded by claiming that Ticketmaster simply can’t show you all the fees until it knows how many tickets are being bought and what the shipping method is.

A few hours later, Ticketmaster launched a blog, where the first post tries to delve into this by suggesting that the problem isn’t the fees, it’s that you don’t understand the fees. Yeah, really. This is incredibly tone deaf on Ticketmaster’s part. People understand fees just fine. As Eliot Van Buskirk at Wired points out “each dollar that comes out of their wallets is identical.” No one cares that Ticketmaster has to pay various third parties, such as “promoters, venues, teams, artists” out of those fees.

Years ago, we discussed a nearly identical situation with phone bills, showing how people were incredibly annoyed with massive unexplained fees, and the telcos insisted they were necessary to “recoup costs.” But, as we pointed out, in most businesses you recoup the costs in the list price and don’t break out fees. Otherwise, we’d have lots of companies doing this sort of crap: Want a pizza pie? It’s just $3, but there’s a $3.50 “crust fee,” a $9.38 “oven fee,” a $4.50 “service fee,” and a $2.18 “cleanup fee.” Plus tax.

That, of course, is ridiculous and would piss people off — just as telco fees do and just as Ticketmaster’s fees do. If Ticketmaster wanted to make people happy it would stop telling people they need to be better educated about fees — a subject they don’t care about — and just offer straight up, all-in, pricing. If Ticketmaster has to pay a bit more to some third party because of this, well, why not figure out a way to bake that into the overall price. It’s called forecasting, and most other businesses predict their cost of goods sold using various forecasting methods, and it seems rather silly that Ticketmaster apparently cannot.

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Comments on “Ticketmaster Says People Don't Like Service Fees Because We Don't Understand Them”

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56 Comments
Ima Fish (profile) says:

Despite pissing off customers, fees are great. Whenever a company needs a new revenue stream, they only have to pull a new “fee” out of their ass. Credit card companies have learned this. So have the airlines. And let’s not forget the fee masters, wireless carriers.

Being able to pull new revenue streams out of your ass sure beats innovating with new business models and pleasing your customers.

retarded says:

this article

way to just babble on and on about nothing. If you dont like the fact a business tries to make money for themselves and their clients * the people you go to see *, then boycott the bands and teams that use ticketmaster. Then after you’re done whining about it, go slit your wrists for being so emo dramatic.

Mike Masnick (profile) says:

Re: this article

way to just babble on and on about nothing. If you dont like the fact a business tries to make money for themselves and their clients * the people you go to see *, then boycott the bands and teams that use ticketmaster. Then after you’re done whining about it, go slit your wrists for being so emo dramatic.

way to just babble on and on about nothing. If you dont like the fact that this site writes about what we find interesting * the content you are reading by choice*, then boycott the site that writes about that content. Then after you’re done whining about it, go slits your wrists for being so emo dramatic.

/couldnotresist

Not that you’ll recognize the irony, but it is amusing that you whine about what you falsely perceive as me whining in a much more dramatic way than anything I wrote. Amusement abounds.

Anonymous Coward says:

Re: this article

If you dont like the fact a business tries to make money for themselves and their clients * the people you go to see *, then boycott the bands and teams that use ticketmaster.

The point is less “I don’t want to pay that” and more “be upfront with what I’m paying.” like mike said, you don’t order a pizza for $3 and then get charged an over fee, a cleanup fee, and a service fee — you buy a $12 pizza and you’re done. Ticketmaster says a concert is $30, but then adds on service fees and lighting fees and venue fees — just tell me the ticket really costs $52 and be done with it.

RD says:

Re: this article

“!way to just babble on and on about nothing. If you dont like the fact a business tries to make money for themselves and their clients * the people you go to see *, then boycott the bands and teams that use ticketmaster. Then after you’re done whining about it, go slit your wrists for being so emo dramatic.

way to just babble on and on about nothing. If you dont like the fact that this site writes about what we find interesting * the content you are reading by choice*, then boycott the site that writes about that content. Then after you’re done whining about it, go slits your wrists for being so emo dramatic.

/couldnotresist”

(to original poster) Yes. Please do so. Especially the last part, do that right away. Please. Soon. Then we wont have to poison our eyes with your whiny drivel.

mark says:

Re: this article

When the group that I am associated with moved venues (the old one closed down), we were forced to drop Brown Paper Tickets, which had decent fees, and go with Ticketmaster, which doubled our ticket price. Ticketmaster had a perpetual contract with the new venue so we were forced to use them. After losing quite a large number of fans, we looked at other venues, but Ticketmaster had all of them as well.

yourrealname (profile) says:

Fees

I think everyone is missing the real point of the extra fees. The contracts are set up with various people, the bands, promoters, etc… to take a certain percentage of the price of the ticket. That way if for some reason an event undersells, they don’t end up having to pay pre-set money to each person, they still only give them a percentage of the ticket sales, thus keeping the loss down for Ticketmaster if a band gets a poor draw. The extra fees added on are not included in the total that gets split with the other people. Ticketmaster keeps all that themselves. So not only are they screwing the customer over with extra fees, they’re screwing the artists and everyone else over using fees as a way to do fancy accounting to prevent paying everyone else as much.

coldbrew says:

Re: Fees

The reality is that these tactics leave Live Nation open to disruption, and all I see is opportunity. Go-to-market strategy is probably most important, but focusing on the customer’s (i.e.the people buying the tickets) needs should be the overall strategy, which makes this more difficult because there are several stake holders to accommodate: venue owners, promoters, labels, and the bands. There are many startups looking at this issue.

Mojo says:

A big reason for “tack on” fees is to keep a low, attractive price you can advertise. You can push concert tickets at $50, but only after you’ve initiated the purchase are you presented with the “true” cost of closer to $75.

Same with the telcos. Your wireless carrier will hook you with a low monthly fee of $39.95, knowing full well that they’ll get more like $60 from you after they tack on the fees.

That’s why they do it.

Wouldn’t you?

Anonymous Coward says:

Re: Re:

Uh, no?

Ever heard of long-term planning? I know that US investors discourage that idea, but most parts of the business world don’t believe in cannibalizing future dollars for minor, immediate gains.

There’s a saying “Fool me once, shame on you; fool me twice, shame on me”. You trick people into paying higher-than-advertised prices once, and they will never trust your marketing again.

DearMrMiller (profile) says:

De Facto Monopoly

I know folks want to think that the artist/venue/promoter are innocent victims in all this but that’s not actually the case. I’ll explain:

Ticketing is a de facto monopoly regardless of how you slice it. A limited resource where demand sometimes outstrips supply. Now as a artist/venue/promoter you of course want your tickets sold, so you give the biggest allocation to the largest and most reliable ticketing provider, which most of the time is Ticketmaster. In order to gain a larger allocation of tickets from the venue/artist/promoter what do you think agents like Ticketmaster bargain with? If you guessed by setting extra fees, you’d be correct. Most of the time during these dealings, side deals are cut so that the venue/artist/promoter/agent can profit further from the sale of this limited resource. Now Ticketmaster doesn’t mind being the boogie man and takes the flack, that’s their job and why venues/artists/promoters use them. So fees are in fact shared between the parties and are set by collusion between the agent and the venue/artist/promoter. With the extra and reliable income that Ticketmaster promises based on getting these allocations there is really no desire to promote competition. It’s greed on all sides where Ticketmaster plays the bag man. Obviously if the venues/promoters/artists wanted something different which was fairer for the punter, they would do it. But the promise of extra gravy… well that’s sometimes hard to resist.

Anonymous Coward says:

Re: De Facto Monopoly

That’s not entirely true. Often artists of a certain level cannot put together a tour without Ticketmaster/LiveNation. These organizations are pretty much monopolists when it comes to venues and ticketing in the US. Do a little research about what happened when Pearl Jam butted heads with Ticketmaster 15 yrs ago.

Todd (profile) says:

Azoff again responded by claiming that Ticketmaster simply can’t show you all the fees until it knows how many tickets are being bought and what the shipping method is.

This exact same line of reasoning was used in a piece in the LA Times today by Verizon and AT&T. They claim you can’t get a full quote without going through the entire 15 minute order process.

http://www.latimes.com/business/la-fi-lazarus-20100824,0,1949781.column

Karl (profile) says:

Ticketmaster Says People Don’t Like Service Fees Because We Don’t Understand Them

Breaking News:

Ticketmaster’s Mom Says Ticketmaster Is Not Fat, They’re Big-Boned

…Incidentally, this is the first I’ve heard about artists and promoters getting a cut of the service fees. The way it used to work is that the band gets a flat guarantee from the venue, and the promoter/manager/etc. takes a cut of that. The ticketing fees would all go to the ticket agent.

If that’s not the case anymore, then why do tickets cost so much, even without the fees? That can’t all be going to the venue…

Then again, I haven’t attended a show where tickets were sold by Ticketmaster in a very, very long time. I mean, the last time I paid a ticketing fee, it was around $3.00.

Russ (profile) says:

Airlines

Don’t forget them.

One of the reasons that teleco’s and airlines do the fees rather than increase tickets is for search comparison.

got to orbitiz, etc. and search for tickets, they will compare the list price, not the total cost.

TM OTOH has a de facto monopoly in many areas and they add fees because they can. You want to see the event, then pay the piper. Where else are you going to go?

hans says:

$1 Airline Tickets

When recently hearing about airlines charging for carry-on baggage “because airlines are losing money due to cheap ticket prices”, I came up with the idea that they could charge $1 for the ticket, and then tack on a variable “transportation fee” based on the destination.

I wonder if I could get a business method patent on that?

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