Live Nation Ticket Fees Anger Concertgoers : Rolling Stone

For decades, fans have complained about the service charges Ticketmaster tacks on to every ticket it sells. So it was big news in 2007 when Live Nation, the world's largest concert promoter, announced it would break with Ticketmaster and sell tickets through its own Website — and suggested the move might mean the end of those fees. "The current model is broken, pretending a ticket is $75 when the fan understands the ticket is $100," Nathan Hubbard, Live Nation's CEO for ticketing, said in October. But since Live Nation's in-house ticketing service launched January 1st, fees for shows from the Dave Matthews Band to Phish to Katy Perry have been just as high as Ticketmaster's. "I don't know how [Live Nation] can come out and be less aggressive than Ticketmaster, with all the flak that Ticketmaster has taken," says Buck Williams, R.E.M.'s agent. "It doesn't make great business sense to me to hear that they would be more expensive, or at least the same."

An explanation came during a presentation at a business conference in early January, where Live Nation declared service fees make up 17 percent of its gross income, compared to 43 percent from beer and other ancillary products at shows and 24 percent from tour sponsorship. "In many cases, we are losing money at the door because of the money we pay to the artist — and subsidizing it in other ways," Hubbard says. "Service fees are historically the way we do that."

Live Nation's service fees for DMB's' April 20th show in Birmingham, Alabama, are $14.40, or 18.1 percent of the total $79.40 ticket. (For the band's April 25th Vanderbilt Stadium show in Nashville, sold through Ticketmaster, they are roughly $18.30, or 19.6 percent of the $93.30 total.) Hubbard says fees may come down over time, although he won't give specifics. "This is not the end of the journey for us," he says. "We've just made a big, big step forward for the industry, which is to create a legitimate and functioning alternative [to Ticketmaster]. And now the challenge is to work with artists to look for creative new ways to deal with pricing."

But even acts that have agitated against service charges find they have no power to reduce them. "It's giving me gray hair," says Umphrey's McGee manager Vince Iwinski. "It hurts us as a band to get an angry e-mail from a fan when the ticket charges aren't what they're expecting. That's not our decision. We're already experiencing some of the same concerns with Live Nation's current ticketing situation that fans had with Ticketmaster. It doesn't seem to be a fix."

And service charges aren't fans' only complaint. When Phish tickets went on sale on January 30th, the overwhelmed system became glitchy and inaccessible. "At the moment of the onsale, there were 1 million people trying to buy tickets, and that overwhelmed the system for a minute," says a Live Nation spokesman. "We sold all the tickets to all the shows. At the end of the day, it was successful."

Neither ticket seller shows signs of dropping service charges any time soon. For example, fees for Katy Perry's upcoming shows, through both Live Nation and Ticketmaster, are a steep $8 for every $18 ticket — and while few big-name summer tours have gone on sale yet, industry sources don't expect anything to change by then. "[The service-charge system] is a profit center — that's the bottom line," says a concert-industry insider. "For all he heat that Ticketmaster has taken over the years protecting the service-charge revenue that passes through to the promoter, it's uncanny that Live Nation has ended up with the same model at the same cost."

[From Issue 1072 — February 19, 2009]

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