Ticketmaster service fee is 17 to 29 percent

Concert Promoters Finding Ways to Sidestep Ticketmaster
Posted: 06-20-2007 03:04 PM

http://www.suntimes.com/entertainment/music/430979,SHO-Sunday-tickets17.article
Concert Promoters Finding Ways to Sidestep Ticketmaster

So you want to see a concert this summer. You're daunted by the prices, but you decide to take the plunge and buy tickets online for a favorite artist. Just before committing to pay on your credit card, you discover the total is 25 percent higher than what you expected to pay. What gives?

The biggest extra charge is the "convenience fee" added by Ticketmaster: The cost averages $10 per ticket, but can climb much higher.

"The ticket prices are not the problem; it is the additional fees that are a problem," local music fan Brian Hoekstra wrote in an e-mail to the Sun-Times typical of many complaints from concertgoers. He and his son went to see Ted Nugent at the Star Plaza Theatre in Merrillville, Ind. The price was $27 per ticket, but they wound up paying $40.50 each. "Sometimes the fees add up to half of the original ticket price!"

For years, consumers have complained about the big jump in the cost of tickets purchased from Ticketmaster during a two-minute transaction online or by phone. But given the lock the ticketing giant has on many venues in the Chicago area, concertgoers had no choice: They had to buy from Ticketmaster or not at all, since many venues didn't have box offices where tickets could be purchased in person without fees.

But two weeks ago, the Chicago office of national concert promoters Live Nation (formerly Clear Channel) announced it is now selling tickets for all of its big summer shows -- at the First Midwest Bank Amphitheatre in Tinley Park, the Alpine Valley Music Theatre in East Troy, Wis., and the Charter One Pavilion on Northerly Island -- at the House of Blues box office, 329 N. Dearborn, with no service charges added, from 10 a.m. to 10 p.m. seven days a week. (Live Nation bought HOB last year, and it owns or controls the other venues.)

"This is really a local customer service effort," said Live Nation spokesman John Vlautin. "The benefit customers get by coming to the HOB box office to buy these tickets is that they don't have to pay a service or handling fee and they can conveniently pick up the tickets if they work or live downtown."

Live Nation's major rival, Jam Productions, does not have a central location where fans can buy tickets to all of its shows, but it maintains box offices at two of the venues it owns, the Vic Theatre on the North Side and the Park West in Lincoln Park, and concertgoers can purchase tickets for shows at those venues without service fees. The company also notes that many of the other venues where it promotes concerts -- including the Allstate Arena, the United Center, the Metro, the Aragon Ballroom and the Chicago, Auditorium, Riviera and Rosemont theaters -- have box offices where concertgoers can purchase seats without Ticketmaster fees. (Hours vary at each, and some are only open on the day tickets go on sale and/or the day of the show, so always call ahead.)

Ticketmaster unplugged

An examination of Ticketmaster service charges this season reveals that the ticketing company adds convenience fees ranging from 17 to 29 percent to the advertised ticket prices for Live Nation shows and from 8 to 13 percent for tickets to Jam shows. Why are the service fees for Jam concerts lower than those for Live Nation concerts?

"We fight for the fans to pay less for service charges -- we're on their side," Jam co-founder Jerry Mickelson said. He added that a portion of the Ticketmaster convenience fee for venues Live Nation owns, including the FMBA, reverts to Live Nation.

"A percentage of service charges is often kicked back by Ticketmaster to promoters and venues, giving them a vested interest in keeping service charges high," alternative rockers Pearl Jam charged in a memo to the Justice Department written in 1994, during the height of their battle with Ticketmaster (see sidebar). In 2003, Rolling Stone reported that the convenience fee is divided with 30 to 40 percent for the venue, 25 percent for the ticket outlets and the rest after expenses as profit for Ticketmaster.

"All I can tell you about how the Ticketmaster fees are set is that they're scaled to the size of the show and the venue," Live Nation's Vlautin said. He added that only Ticketmaster can comment about how its fees are set and how that money is divided.

Ed Stewart, Ticketmaster's Los Angeles-based vice-president of corporate communications, declined to comment or answer numerous questions posed to the company for this story.

Stay tuned

The big news for frustrated consumers is that a major change could be in the works: The concert industry has been buzzing for months that Live Nation may begin selling tickets for all of its concerts itself. It is currently Ticketmaster's single largest client, but that contract expires next year, and Live Nation owns a stake in two major independent companies, Next Ticketing and MusicToday.com, which both rival Ticketmaster's capabilities for selling tickets online.

If Live Nation cuts Ticketmaster out of the transaction and sells tickets direct to concertgoers, industry experts say that it will be able to keep more of the ticketing revenue for itself -- and hopefully reduce service fees for concertgoers.

"We're in the midst of talking through next steps with Ticketmaster," Vlautin said, "so it wouldn't be appropriate for me to comment on that."