Concert ticket prices have soared in recent years, leaving many fans questioning the reasons behind this trend. From artist earnings to ticketing website practices, multiple factors contribute to this surge.
This article explores the key reasons driving the increase in concert ticket prices, examining insights from industry experts and the impact on both fans and artists. The aim is to provide a comprehensive understanding of the complex dynamics at play.
Fans willing to pay for big spectacles
The undeniable allure of large-scale music events is driving ticket prices higher. The demand for grand spectacles, such as stadium shows and outdoor festivals, is significant, with people ready to spend considerable sums on these experiences. Matt Hanner, a booking agent, echoed this sentiment, emphasising that stadium shows have become a fixture in towns nationwide, reflecting a growing trend where fans allocate substantial portions of their disposable income to attend such events.
Jon Collins, CEO of a live music trade body, shared a similar perspective, highlighting a widespread appetite among music enthusiasts for larger-than-life performances. The costs involved in these shows are substantial, including expenses for staffing, venue hire, transportation, insurance, and production. These costs are inevitably passed on to the ticket buyers, further contributing to the rise in ticket prices.
Are artists being greedy?
The significant fees associated with concert tickets often lead to questions about artist greed. However, the reality is more nuanced than it appears. A large portion of the earnings from ticket sales is allocated to cover various costs before the artists receive their share. According to industry insiders, about 50-70% of gross earnings are distributed to promoters and artists, with promoters typically taking 15% of the remaining amount while the act receives 85%.
Taylor Swift, for instance, earns between $10m and $13m per stop on her Eras Tour. Despite her substantial earnings, she is also recognised for her generosity, such as giving $100,000 bonuses to her tour’s lorry drivers. Promoters ultimately set ticket prices, often in consultation with the artists, especially for prominent performers.
Dynamic pricing and ticketing website fees
Dynamic pricing by ticket sale sites is another significant factor driving ticket prices. This system adjusts ticket prices based on demand, causing prices to soar for highly sought-after events. Jack Antonoff, a frequent collaborator with Taylor Swift, has criticised this system, advocating for artists to have the option to opt-out and set their own prices.
On their part, ticketing websites often add a range of fees that customers only see at checkout. These additional costs, including booking, delivery, and transaction fees, can add as much as 20% to the total ticket price. Such practices have been heavily criticised by consumer groups, urging for more transparency and regulation in the ticketing industry.
In a notorious instance, The Cure’s lead singer Robert Smith expressed his disgust on social media, highlighting cases where processing fees were higher than the ticket price itself. Ticketmaster, among other companies, defends these fees as necessary investments shared with their clients to get events off the ground.
Antitrust issues with ticketing giants
The dominance of companies like Ticketmaster in the ticketing market has led to significant legal challenges. The US government has initiated a lawsuit against Ticketmaster’s parent company, Live Nation, accusing it of monopolising the live events industry. This lawsuit highlights the company’s control over 70% of primary ticketing for concerts in America and its use of lengthy contracts to stifle competition.
Live Nation disputes these allegations, arguing that their market share is shrinking and that their profit margins are minimal. They assert that the lawsuit does not address the core issues concerning ticket prices and service fees. Live Nation claims that they are working to bring about reforms that protect both consumers and artists.
The impact of VAT
In the UK, Value Added Tax (VAT) is another contributor to escalating ticket prices. The current VAT rate of 20% significantly impacts the cost of concert tickets. During the COVID-19 pandemic, the VAT rate was temporarily reduced to support the live music industry but has since returned to its pre-pandemic level.
Jon Collins notes that the UK’s VAT on tickets is much higher compared to other countries. For instance, France has a VAT rate of 5%, Germany 7%, and Italy 10%. This discrepancy places the UK at a disadvantage, as the higher VAT rate contributes to the overall increase in concert ticket prices.
Touring as a primary income source for major artists
The shift in the music industry’s revenue dynamics has made touring a primary income source for artists. With the decline in sales of physical music products and the rise of streaming services, artists are increasingly reliant on income from live performances. Renowned writer Paul Stokes pointed out that major artists, who previously toured infrequently, are now scheduling more shows to maximise their earnings from live events.
Artists now frequently book multiple dates at massive venues, a trend that was unthinkable two decades ago. This change has not only increased the number of live performances but also amplified the scale and production quality of these events, further driving up costs and ticket prices.
Not being felt evenly
While the rise in concert ticket prices is evident for major stars, this trend does not necessarily extend to smaller acts and grassroots venues. Jon Collins emphasises that there remains a range of affordable options for live music experiences, from free pub gigs to reasonably priced mid-tier concerts, illustrating that the escalation in ticket prices is mainly confined to high-profile performers.
Matt Hanner notes that financial constraints due to the cost-of-living crisis have made it more challenging for lesser-known artists to raise their ticket prices. Consequently, even though their core costs are increasing, the fear of pricing out fans has resulted in suppressed ticket prices for smaller acts. This disparity highlights the uneven impact of the rising costs within the live music industry.
Understanding the surge in concert ticket prices requires recognising the multifaceted factors at play. From the high demand for large-scale events and the associated production costs to the role of dynamic pricing and VAT rates, numerous elements contribute to the increasing prices. While major artists can command high fees, smaller acts face unique challenges in this evolving landscape.
Ultimately, the live music industry is striving to balance these pressures while providing diverse and accessible experiences for all fans. By addressing the systemic issues and exploring regulatory measures, there is hope for a more equitable future in the world of live music.