Ticketing Fees

Breaking down those extra costs everybody hates

N.B. This is a lightly modified version of an old Twitter thread I initially published in March ‘21 as concerts were starting to come back post the winter ‘20/‘21 lockdown in the UK.

With a timeline for the reopening of events now in front of us, ticket sales are flying. With the return of ticket buying comes the return of something nobody missed: service charges.

So what are they? Why do they exist? Where does that money go?

Service charges (aka booking fees) are the ticketing company’s revenue in a ticket sale. The price of the ticket, the ‘face value’, goes to the event organiser to cover the costs of putting the event on. But this doesn’t tell the whole story.

Let’s look at an example…

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Here’s 2x tickets for The Weeknd at The O2 as sold on Ticketmaster.  Each ticket breaks down:

  • £80 face value
  • £10 service charge
  • £2.25 Facility Charge
  • £2.75 Handling Fee
  • £0.70 Standard Post

Let’s go through that line by line…

£80 face value – this is passed through to the event organiser (the promoter) to cover the costs of the event, not least of all paying the artist for their performance, either as an upfront guarantee or revenue split (probably the topic of its own dedicated thread sometime).

£10 service charge – (aka the booking fee) this is Ticketmaster’s revenue. There are overheads associated with selling tickets, after all… but it’s not quite as simple as that, as we’ll discuss.

£10 is 12.5% of the ticket face value (£80), which is quite steep as UK fees go.

£2.25 Facility Charge – this retained by the venue. Also called a ‘restoration levy’ or similar, prestigious venues will sometimes have a dedicated line item like this on top of ticket sales in their rooms. Extra revenue for the venue because they can demand it, basically.

£2.75 Handling Fee – Another fee tacked on by the ticketing company to cover processing costs such as credit card fees. Historically this would’ve been covered as part of the service charge, but here we are.

£0.70 Standard Post – to cover the cost of postage, but who gets tickets posted to them anymore?!

So that’s a total of £15.70 of fees on top of an £80 ticket. Just shy of 20% of the ticket face value again in fees. Not great – but we’re in the UK and have the benefit of being able to shop around! Let’s see what’s on offer at AXS for the same show…

Similar ticket, same face value, this time with £13 of fees on top. No postage as it’s a digital ticket, so that’s a benefit. Still, seems a bit steep to be paying 16%+ of the face value again as fees. But things could always be worse. Spare a thought for those in the States…

Here we have a comparable ticket for The Weeknd at the Barclays Center in New York. $206 face value(!), with a $37.55 service fee and $6 order processing fee on top. So 21%+ of fees on top of an already steep face value. And the real kicker here is there’s no alternative.

Because of how ticketing deals work in the US, you either buy your ticket from the venue’s primary vendor (in this case Ticketmaster) or try your luck on the secondary market. There is no alternative. Because of this it’s not uncommon to see much worse fee situations than this…

Here are 4 x $16 tickets ($64), with a total of $67.55 worth of fees on top (~105%).

Again, the consumer has no choice in this matter. Buy the tickets from this vendor or try your luck on the secondary market (with a potentially higher ticket price and equally egregious fees).

So where does this money go? We discussed the dubious ‘facility fee’ and ‘handling fee’, but what about the service charge itself? Well, it’s the ticketing company’s revenue, but that doesn’t tell the whole story.

The promoter will often have a ‘rebate’ deal with the ticketing company, getting kicked back a portion of the fee in return for providing them with ticket inventory. Thus the face value can be kept artificially low, with the ticketing company taking the reputation hit.

They’re not the only ones. Venues and artists can get in on the act too (it’s important to note that the venue is also often the promoter, particularly in the US). So it’s not quite as straightforward as being able to categorise the service charge as the ticketing company’s revenue, as much of that will often make its way back to other constituents in the value chain.

In the US, ticketing companies will often pay large sums of money to buy the exclusive ticketing rights to a venue for a period of time. The service charges are a way for them to earn this money back. Even then, an ongoing portion of the service charge may still go to the venue.

So ticketing companies having terrible reputations (generally speaking) is a feature, not a bug. The ticketing companies take the hit so that others in the value chain don’t seem so bad.

One last important point to be aware of is that many of the largest ticketing companies are vertically integrated with promoters (Ticketmaster-Live Nation, AXS-AEG, etc.), so the revenue all goes back to the same bottom line in the end anyway.

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