Ticketmaster fees: ‘There’s a real lack of understanding,’ analyst says

LightShed Partners Media and Technology Analyst Brandon Ross joins Yahoo Finance Live to discuss the current issues facing the broader ticketing industry, Taylor Swift ticket chaos, hidden fees for The Cure concert-goers, and transparency for the consumer.

Video transcript

RACHELLE AKUFFO: More ticket controversy for Live Nation-- this time, it's outrage over inflated prices to see The Cure. According to various testimonies on social media, the addition of various processing and servicing fees jacked up the price of a $20 ticket to well over $100 in some cases.

The band's co-founder and lead singer, Robert Smith, taking to Twitter, saying, he was, quote, "as sickened as you all are" over the fees for the concert. Now, it's just the latest high-profile scandal involving Live Nation-owned Ticketmaster.

Last year, so-called Swifties were up in arms when they were unable to buy tickets to Taylor Swift's last tour. The Live Nation CEO was grilled in front of Congress earlier this year on that very matter. He was grilled by senators, not Swifties, in case you were wondering.

Yahoo Finance has reached out to Live Nation for comment, and joining us now for this conversation is Brandon Ross, LightShed Partners media and technology analyst. Good to see you, Brandon.

I mean, it did seem like public shaming, in the case of The Cure, did seem to be what happened here, at least getting some people some partial refunds. But what should we be looking at long-term, when you look at some of the fees that keep getting tacked on?

BRANDON ROSS: Sure. There's a number of issues currently facing the broader ticketing industry. I think fees is just one of those. And obviously, you had a lot of fans, and Robert Smith himself, up in arms over the fact that the fees were larger than the ticket price in this case.

The problem that you have is, I think there's a real lack of understanding, sometimes from the artist's perspective, and definitely from the fan perspective, as to where those fees are actually coming from. In the case of The Cure, you had half of the fees going directly to the venues to cover things such as parking and other services that are given at the venue.

And then, half of the ticket portion of the fee went to Ticketmaster, and half of that actually goes back to venues. So the venues are taking 75%-plus of that fee, and Ticketmaster only 25%. And I don't think most fans actually understand that.

RACHELLE AKUFFO: Because it does seem to be Ticketmaster is the name that's really getting slandered out there on social media. Why do you think we're not seeing as much focus on the venues? What should be being done at that end?

BRANDON ROSS: Well, I think what needs to be done, really, is real transparency or the consumer. I think you have to start with an all-in ticket price, which has been advocated by Live Nation in the Fair Tickets Act, and then you should tell consumers exactly where those dollars are going and why, and really educate the consumer. Right now, Ticketmaster is the direct link between consumers and the tickets themselves, so they're taking the majority of the blame.

RACHELLE AKUFFO: And we know that The Cure was really trying to get around this idea of some of these scalpers bulk-buying some of these tickets, so they opted in just for the verified fan program, versus the more expensive options. But if it's a venue issue, does it really matter then when you do things like just going for the verified fan option?

BRANDON ROSS: Sure. Well, let's not conflate two different issues here. One of the issues that you highlighted earlier is the fees on the ticket itself, and the other is the scalper issue. And in these situations, especially for The Cure, where they price tickets very low, scalpers are really incentivized to get their hands on those tickets, so that they could resell them at a really large profit.

Verified tickets is one tool in the Ticketmaster arsenal to stop that from occurring. And it seems to have worked to a great degree, not just for The Cure on sale, but also for the Taylor Swift on sale. But you're not going to be able to stymie all of those tickets from being taken by scalpers.

You can use other tools, though. And in this case, they used the idea of not being able to sell secondary market tickets at a markup, having a fan exchange program for secondary. It's something that Pearl Jam did first on their most recent Gigaton Tour.

RACHELLE AKUFFO: And is there any lessons that they could learn, perhaps from how venues in other countries? I know, for example, when I was looking at Beyoncé tickets, it was cheaper for me to fly to London and get good seats than to pay all the fees that got tacked on. Are there any good examples of countries or venues that are really getting this right?

BRANDON ROSS: So in the United States, there's a venue exclusivity model, where venues are going to contract with just one ticket seller. In international markets, the promoter is going to decide how to distribute the tickets. I don't think that's the reason, though, that ticket prices were are so much higher for Beyoncé in this market.

I think it's really what the market itself, from a demand perspective, is going to support. If you had a British band-- I don't know, like Radiohead-- touring that's much more popular in than the US, you're probably going to see much more demand. And you'll have things like platinum pricing that are going to respond to that demand, and priced tickets much higher in those markets.

RACHELLE AKUFFO: I guess for now, I'll just be watching Beyoncé from my couch. Because I just can't do it. Well, Brandon Ross, thank you so much-- LightShed Partners media and technology analyst-- thank you for your time this morning.

BRANDON ROSS: Take care.