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A big concert you want to go to is announced. Enthusiasm! You exchange messages with friends. The price of tickets is announced. Disappointment! New message exchange. Tickets are expensive but, what the heck. You come back to: Enthusiasm! At 10 a.m. and four minutes, the cheapest tickets have sold out and the most expensive are insanely expensive. You go back to: Disappointment!
These are the phases that millions of people go through every week. And they tell us two things: that the multitudinous concerts live a stage of glory and that that glory has a price that we were not used to paying.
Why are tickets so expensive?
The most obvious cause is the increase in production costs, travel and energy prices caused by the war in Ukraine, to which inflation is added.
These circumstances affect all economic sectors: everything is more expensive than a year ago. But in addition, live music has incorporated some factors of its own. To begin with, tickets are worth more than 20 years ago due to the management costs applied by online sales portals and the implementation of dynamic prices.
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Why are management costs so high?
The base price of a ticket is the share that the promoter of the concert takes; The commission for the management is what the online seller receives.
According to ticket sellers, the maintenance of their technology and infrastructure has a cost that, in reality, causes the percentage of their profit to be very tight. Joe Biden and The Cure do not believe the same: last year, the US president assured that the expenses of managing the concerts are "unfair, misleading and expensive" and promised to "take strong measures against those tariffs"; Robert Smith, leader of The Cure, forced last week the ticket of his next tour to lower these costs under the threat of suspending his contract, after many of his fans protested that, in some cases, the management costs were higher than the base price of the ticket itself: The Cure offered tickets at only 20 euros, But with the management the final price exceeded 40.
What is dynamic pricing?
The prices of the best tickets of the enclosure, no more than 10% of the capacity, according to the companies in the sector, may be subject to a variation depending on demand. This algorithm is already known by airlines, hotels or Uber and Cabify, and for five years it has been introduced in ticket sales in Spain.
The consequence is that its price can be multiplied by 10, and that is why we find seats at more than 700 euros that are not resale. In the US, the price reaches 6,000 euros: that was the case of Bruce Spingsteen's new tour, which caused the disappointment of his followers to the point that a magazine dean in the fanaticism for the musician, Backstreets, has closed for disappointment, after 43 years of cult to Bruce of the Great Power.
Do all artists apply dynamic pricing?
No. Dynamic prices are more frequent among groups that have a large mass of fans (to squeeze), at concerts in large venues such as sports palaces and football fields, or in theaters, but it is the artist who decides whether the system is implemented or not.
Ticket sellers argue that dynamic pricing is their tool to combat resale and "fan plunder" (not irony). The system began to be developed in the USA, more than 10 years ago, by Ticketmaster.
What role does Ticketmaster play in price increase?
Remember the anger of Joe Biden and Robert Smith? Both criticized in particular Ticketmaster, the largest ticketing company in the world, an old giant now subject to federal investigation in the US after the scandal that caused the sale of tickets for Taylor Swift's tour.
Ticketmaster is older than Microsoft, Amazon, Netflix or Google and its confrontations with groups are not new: in 1994, Pearl Jam denounced the company before the US Department of Justice for an alleged boycott that could not be demonstrated after a conflict over the price of tickets. Ticketmaster's strategy in the last decade has been to end shows with one or two prices (not so long ago, concerts in large venues had two types of tickets: standing and sitting). It introduced dynamic pricing after being acquired by Live Nation.
What role does Live Nation play?
The world's largest concert promoter and producer bought Ticketmaster in 2010 and the resulting conglomerate has been accused in the US of operating as a "monopoly" of live music on countless occasions; the latter, for example, by the famous Democratic congresswoman Alexandria Ocasio-Cortez, who has asked to separate both companies. The American giant also dominates the Spanish market, especially in the strip of medium and large concerts, but also in festivals.
Does the Live Nation-Ticketmaster conglomerate make money?
A lot. Live Nation's sales in the US in the fourth quarter of 2022, the last counted, were almost 4,000 million euros, representing an increase of 59%, driven by the sale of concert tickets. One of their tools to increase the benefits of their concerts is the promotion of special tickets, with prices that in Spain already reach 1,000 euros.
Are there really tickets at 1,000 euros?
Yes. Specifically, 1,020 euros costs the "Immaculate VIP Package" of Madonna's concert on November 1 at the Palau Sant Jordi in Barcelona. It's just one example.
The expansion of exclusive experiences and VIP culture has spread in concerts and festivals and makes us find figures that only five years ago would have been implantable. As with dynamic prices, it is an option that groups decide: a month ago, Lori Meyers had to cancel the golden and VIP tickets of her concert at the WiZink Center in Madrid on December 30 after criticism from numerous fans, at a time when the cost of living is so high.
And with the cost of living so high, hasn't demand dropped?
No, in fact the demand for tours and festivals has skyrocketed in Spain (and in the world) and ticket sales reached their record turnover in 2022: 459.2 million euros, according to the data of the Yearbook of live music made public last week by the Association of Music Promoters (APM).
In a climate of euphoria, the sector points out that the forecast for 2023 is to equal or exceed that figure: "I do not think we have reached the ceiling. It is a sector in constant growth and there is a long way to go, as we see in other countries, "said Albert Salmerón, president of APM. It is a global phenomenon, but it does not affect all groups equally.
Which artists are the big beneficiaries of the explosion of live music?
The big stars. Live music was the first industry affected by the pandemic and the last to overcome. Since the end of confinement, three years ago, countless groups and artists have canceled their tours because they literally do not get the bills: again and again we can hear or read musicians explaining that, even if they sold all the tickets for a tour at their usual price, they would lose money. This unprecedented crisis affects international medium-sized groups, and especially the British, who have been dramatically harmed by Brexit. That's why we see far fewer tours of this kind on the hall circuit of our big cities.
Meanwhile, there has been a new golden age of mass festivals and mega-tours.
Do megatours cause price increases?
Yes. It has already become common for the shows of the world tours of the great stars to be huge, complex... and expensive. So the caches of the stars have gone up and you have to pay for that. Either at the entrance or in the festival subscription.
And, finally, the big question: will prices fall in the short or medium term?
No.
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