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The concert ticket you buy today is more expensive than ever, but that doesn’t seem to hinder music lovers from shelling out their cash anyway. With a typical ticket going for well over $100 and VIP tickets going in the thousands, it begs the question – where does the money I just spent for my ticket go? The Guardian just ran a comprehensive article on the subject and the numbers might surprise you.
While many concertgoers assume that their $150 is going exclusively to the artist, that’s not the case at all. Here’s approximately how it breaks down:
Taxes – Right off the top, 5% is taken off the top in the US, but it can be as high as 35% in some European countries.
Licenses – PRO’s like ASCAP collect anywhere from 0.1 to 0.8%, but the PRS in the UK collects 3% of the gross.
Fixed costs – The costs of putting on a show at the venue and many and varied. These include the cost of the venue, stage hands, venue staff, electricians, scaffolding, barriers, catering, liability insurance, backstage furniture, forklifts, rigging, medical staff, among many other expenses. Some of these are included in the cost of the venue or paid by the promoter, but sometimes not. This can account for 25 to 40% of the gross.
The promoter – Of the 50% or so that’s left, the promoter can take anywhere from 5 to 15%. Of that, all costs for advertising and promotion are paid by the promoter. The promoter is also responsible for the artist’s guarantee. That means that regardless of how badly tickets sell, the artist will receive this minimum amount.
The artist gets the rest, which sounds like a lot, but there’s a lot of expenses there as well. The production (stage design), crew, sound, lights and transport (as many as 30 trucks on a huge tour, not to mention the busses for artists, musicians and crew) are the responsibility of the artist, although some of this could also come under the category of fixed costs as well. The production rehearsals before the tour (which may but up to 6 weeks with full production in a full-size venue) is also the responsibility of the artist. Then the artist has to pay management 15 to 20% of his take.
Top it all off, the daily expenses of being on the road are high. A superstar act may have an overhead of $750,000 per day on the road whether the artist plays a concert or not.
Still, there’s big money being made from touring, and almost from the beginning of modern music history, this is where the bulk of an artist’s income is made. Even a small portion of the ticket price comes out to a lot of money.
Has this happened to you? You’re one of the first in line to buy a ticket to a concert by your favorite artist only to find that all the choice seats are already gone, or you go online at the exact second that the sale for the concert opens up only to find that all the good seats are nowhere to be found. Yeah, that’s a drag, and the reason is that the third party ticket brokers are using an automated system of bots to get the best seats before the rest of us have a chance. There’s been lots of talk about doing something about this in the U.S., but not much has come of it, but things might be different in Britain, as the music industry is making an uproar.
Members of Parliament have recently been brief by a wide array of music industry representatives on how harmful the practice is considered to be, with the primary concern being that the price for good tickets is artificially inflated thanks to the use of the bots. Both artists and managers testified against the practice and voiced their frustration at not being able to do much to stop it unless there was some sort of government intervention.
Wile consumers frequently rail against the huge Ticketmaster as the main offender, the fact of the matter is that the service is a primary ticket-selling website, getting the tickets directly from the promoter and venue. The real culprits are the secondary services that bid up the price for the best seats after their bots buy them at face value.
While artists are said to be implicit in the price add-ons like service charges from Ticketmaster (which enables them to artificially keep the face value of the ticket low while charging more), fans probably wouldn’t mind so much if at least they had a chance at buying a good seat in the first place. The fact of the matter is that once the secondary ticketing agency gets involved, pricing is completely out of the hands of the artist and venue, with the agency charging what the market will bare. Of course, the prices can really skyrocket at that point, and neither the artist nor the venue or promoter is able to benefit, and of course the fan is left paying far more than what he believes to be fair.
Similar hearings have been held in the past with no movement towards a resolution. Perhaps this time things will change, and cause some change in the U.S. as a result as well.