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I find it even stranger that they don't simply raise the price of the ticket and hide the cost of the fee that way. If a ticket is $25 and then it has a $5 fee I would be upset, but I wouldn't notice if it was just a $30 ticket.


It's because the promoter pays the band based on the face price of the ticket, not on the total price with fees.

At an incredibly high level, there are two historical economic forces at play:

1) The Irving Deal, which states that the goal of the band is to get 90% of all earnings of any event, including concessions, popcorn, tickets, etc. Obviously a very tough proposition in the event promotion business when some of your events make you money, but most break even and some you lose quite a bit on.

2) The Fred Deal, which is what transformed TicketMaster from being a company that cost promoters money (you pay us $.50 for every ticket we sell for you) to one that made them money (we'll charge the customer an extra $10 and give you $8 of it, but you need to sign a multiyear contract and we sell ALL your tickets).

If you're keenly interested in this, you should read the very excellent and recently published book Ticket Masters goes through all of the history and mechanics in great detail. Immediately upon finishing you should come work for me at Ticketfly in San Francisco where we're solving these sorts of problems on a daily basis. ;)


Thanks for the book recommendation. Ordered.




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