Crunching the Numbers: Why Are Ticket Prices So High?

The ongoing discourse surrounding ticketing giants Live Nation and Ticketmaster has sparked considerable debate. Some are even labeling them as “monopolies” and blaming them for the high cost of tickets.

Live Nation recently published an article shedding light on the intricacies of ticket sales processes, aiming to provide clarity amidst the controversy. Acknowledging the upward trend in ticket costs, they explain that “The average price for a concert ticket has risen 33% in the last 5 years ($90 in 2018 to $120 in 2023), according to Apollo, which the value of a dollar has “only” decreased 21% in that same time period.”

Delving deeper, the article explains the pricing mechanisms within the industry, revealing that ticket prices are predominantly determined by the performers themselves rather than the ticket retailers. In the case of NFL events, for instance, the home team dictates ticket pricing, while concerts are priced by the artists and their management teams.

However, the core of the issue lies in service fees. Although often perceived as excessive, these fees are essential to cover various operational expenses, with minimal proceeds directed toward the ticketing companies or venues.

Despite consumer frustration, it's imperative to acknowledge the indispensable contributions of the individuals working behind the scenes. Notably, it's typically the venue rather than the ticketing company that sets the service fee, reflecting the intricate interplay of stakeholders involved in event management.

From a business standpoint, the fundamental principles of supply and demand exert significant influence on pricing dynamics. Artists such as Taylor Swift, Harry Styles, or Rihanna wield considerable market power, enabling them to command higher ticket prices corresponding with their stature within the industry.

Overall, while ticketing companies play a pivotal role in facilitating transactions, it's crucial to recognize the multifaceted determinants shaping ticket prices. Beyond the headline figures, there is a multitude of logistical and operational factors that come into play, underscoring the intricate ecosystem supporting live events and the stakeholders reliant on their success.