Ticketmaster - Service Fees

Service Fees

Ticketmaster does not receive any of the advertised ticket price when a ticket is sold. Instead, income is derived from service fees. Consumers often find these markups unreasonably excessive, especially because there are many instances where no alternative purchase method is offered that would allow avoidance of the fees. This business practice, along with a dearth of competitors, has led many to view Ticketmaster as monopolistic. Alternative ticketing companies have emerged but due to Ticketmaster's exclusive agreements with a large percentage of venues the company does not need to lower service fees. In some instances customers may be able to buy tickets directly from the venue, which may make its own service charge.

Typical fees added to a ticket's face value include:

• Service Charge – This is Ticketmaster's charge for the general service they provide and maintain. The amount paid may depend upon the method of payment (by phone, online, or in person).
• Building Facility Charge – This is determined by the venue, and not Ticketmaster.
• Processing Charge – This is Ticketmaster's charge for processing your order and making the tickets available to you. This is usually not a per ticket charge, but rather a per order charge.
• Shipping Charge, E-Ticket Convenience Charge, Will Call Charge – Ticketmaster charges a fee for ticket delivery, whether the tickets are mailed to the customer, printed out at home, or collected from the venue. The charge for printing out the ticket at home is often higher than the fee to have the ticket physically mailed to you. In other sectors, such as airline ticketing, companies usually do not charge (and in some cases even offer a discount), for electronic ticketing. Economist Emily Oster of the Chicago Booth School of Business suggests that this reflects the lack of competition in the industry, with customers willing to pay more for the convenience of obtaining the tickets immediately due to a lack of alternate options.

As an example of a typical markup, as seen on Ticketmaster.com, a ticket to see the Cincinnati Cyclones play at US Bank Arena on February 9, 2011 cost $13. In addition to this, Ticketmaster levies fees of $4.05 (processing charge), $2.50 (print your own ticket charge) and $4.35 (convenience charge), a total of $10.90, 84% of the ticket's original price. In most instances service charges amount to up to 50% of a ticket's face value.

Ticketmaster has been criticized from those who claim its fees are excessive, with forty British MPs signing an early day motion criticizing the company for overcharging and for the lack of transparency in its pricing structure.

In 2003, a class action lawsuit was filed against Ticketmaster in Los Angeles District Court alleging that Ticketmaster misrepresented the exact nature of the shipping and processing fees included in certain ticket sales. That dispute then spilled over into a related lawsuit filed in 2010 against Ticketmaster’s liability insurance carrier Illinois Union Insurance Company, a subsidiary of ACE Limited (NYSE: ACE).