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It’s a Convenience Charge, You Oxymoron

If you bought a ticket through Ticketmaster to see the Wu-Tang Clan last Friday, you were helping Ticketmaster’s bottom line almost as much as you were patronizing the House of Blues.

If you bought a $42.50 ticket through Ticketmaster, you also had to pay $10.05 to cover Ticketmaster’s “convenience charge.” That’s an additional 23 percent over the ticket price, and all that money went to Ticketmaster.

In August of 2007, Live Nation announced it was ending its relationship with Ticketmaster as of January 1, 2009. Live Nation is the largest concert company in the U.S. In 2007 Live Nation concerts brought in $150 million for Ticketmaster, or 15 percent of its $1 billion 2007 income.

In announcing its separation from Ticketmaster, Live Nation said it would be selling its own tickets and in turn save its clients money.

San Diego, however, is one of the few cities where Ticketmaster will still have its teeth in Live Nation’s business throughout 2009.

That’s because when Live Nation (formerly Clear Channel Entertainment) took over House of Blues Entertainment and its quiver of four venues (HoB, Cricket Amphitheatre, Cox Arena, and Open Air Theatre), those properties came with contracts that said that Ticketmaster would be involved until January 1, 2010.

The Belly Up Tavern, Soma, and the Casbah have long since given up on Ticketmaster and use their own ticketing service.

AEG Live, operators of the Sports Arena and Qualcomm Stadium’s outdoor venue, have not announced any plans to stop using Ticketmaster.

“I wonder about Live Nation suggesting it will save people money.” said one music-industry insider. “I’m sure Live Nation will eventually find a way to get that ticket-charge money for themselves.”

– Ken Leighton

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If you bought a ticket through Ticketmaster to see the Wu-Tang Clan last Friday, you were helping Ticketmaster’s bottom line almost as much as you were patronizing the House of Blues.

If you bought a $42.50 ticket through Ticketmaster, you also had to pay $10.05 to cover Ticketmaster’s “convenience charge.” That’s an additional 23 percent over the ticket price, and all that money went to Ticketmaster.

In August of 2007, Live Nation announced it was ending its relationship with Ticketmaster as of January 1, 2009. Live Nation is the largest concert company in the U.S. In 2007 Live Nation concerts brought in $150 million for Ticketmaster, or 15 percent of its $1 billion 2007 income.

In announcing its separation from Ticketmaster, Live Nation said it would be selling its own tickets and in turn save its clients money.

San Diego, however, is one of the few cities where Ticketmaster will still have its teeth in Live Nation’s business throughout 2009.

That’s because when Live Nation (formerly Clear Channel Entertainment) took over House of Blues Entertainment and its quiver of four venues (HoB, Cricket Amphitheatre, Cox Arena, and Open Air Theatre), those properties came with contracts that said that Ticketmaster would be involved until January 1, 2010.

The Belly Up Tavern, Soma, and the Casbah have long since given up on Ticketmaster and use their own ticketing service.

AEG Live, operators of the Sports Arena and Qualcomm Stadium’s outdoor venue, have not announced any plans to stop using Ticketmaster.

“I wonder about Live Nation suggesting it will save people money.” said one music-industry insider. “I’m sure Live Nation will eventually find a way to get that ticket-charge money for themselves.”

– Ken Leighton

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Comments
5

I am certainly not a TM apologist but "...all that money went to Ticketmaster" is not factually correct. Check out TM's financials - the venues usually get a share of the fees.

Dec. 10, 2008

It is true "all that money went to Ticketmaster." It is also true that Ticketmaster has unpublicized "kick-back" arrangements with venues and promoters. These back door arrangements are not well-known and are certainly not made clear by Ticketmaster. By doing it this way, the promoters get to get an extra revenue stream from each of thier shows and this extra income is not included in the deal the promoter makes with the artist. Let's say the deal is the artist gets, say 75% of the gross. This secret kick-back income does not show up when the promoter settles with the artist and his agent. In other words this kick-back money does not show up as gross receipts when itn fact it should. I would like to know what "financials" Say _What is talking about.

Dec. 10, 2008

Absolutely Live Nation is getting a rebate back from Ticketmaster. This practice has been going on ever since Ticketmaster started in business. (Why do you think so many buildings and promoters signed deals with Ticketmaster - they had the best model and the rebates help mitigate the huge risk the promoters take on their shoulders).

Live Nation is taking their ticketing "in-house," but don't think for a minute that service charges will go down. 100% of the money will just now go to Live Nation instead of Ticketmaster. Go to their shows if you wish, but don't invest in the company. Citigroup is a better bet.

Dec. 10, 2008

"San Diego, however, is one of the few cities where Ticketmaster will still have its teeth in Live Nation’s business throughout 2009."

BAHUMBUG.

Dec. 11, 2008

Hey, my wife and I used to work for ticketmaster awhile ago. Here's a head's up, we used to sell tickets for smaller venues that was less then the convenience charge, so when the customer got upset about that I will tell them to go straight to the box office to buy the tickets to AVOID THE CHARGE. Also, the day when any tickets go on sell, some tickets or seats are helded back and then released about a week before the day of the event. So, if you don't get good seats on the first day of the sale call back or GO TO THE BOX OFFICE a week before the event and you will get good seats.

Dec. 18, 2008

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