You’ve presumably paid the face value of this newspaper for the privilege of reading these words, but you haven’t actually paid for the convenience of reading this. So how about I institute a new personal service charge: If you wish to continue reading my words, please e-mail your credit card information so I can deduct, say, an additional 20 percent of what you’ve already paid.
I learned this trick from the live-entertainment industry, which has conditioned people to pay large chunks of money for the privilege of spending larger chunks of money for the actual product. See, in order to enjoy a concert — or a theatrical spectacle or a sporting event — you need a ticket. So it follows that in addition to paying for the experience itself, you also should have to pay for the ability to buy a ticket for said experience.
Hence, we have the beloved “convenience charge” or “service fee.”
Mind you, these fees are nothing new — and neither are complaints about them. But 10 years ago the griping might have sounded like this: No way should I have to spend an additional 3 bucks because some Dominick’s clerk or phone operator sold me a ticket.
That is to say, back then some person actually was providing the service, whether or not you believed Ticketmaster’s claims that the labor and technological infrastructure justified the fees. Now buying tickets has become a do-it-yourself game, with the dominant Ticketmaster selling an estimated half or more of its tickets online.
Even on the phone you don’t deal with a human being.
Ticketmaster prods callers through a series of robotic-voiced prompts that, in several calls I made, led to dead air rather than completed ticket transactions.
In other words Ticketmaster, like much of the corporate world, has figured out how to use automation to cut down on labor costs. Yet service fees are as high as ever.
You can’t just blame Ticketmaster. Tack-on fees are wrapped up in the larger world of live-entertainment deal-making, which gets particularly shady when it comes to concerts.
The service charges are determined not just by Ticketmaster but also the promoter, venue and act, all of which can share in the revenues — and increasingly want to.
“A portion of what we collect as our fees does get paid back to our clients,” said David Goldberg, Ticketmaster’s executive vice president of strategy and business development. “Over time the portion of those fees that gets paid back has increased.”
In other words printing and distributing tickets used to cost money. Now they’re a cash cow.
“We’ve gone from ticketing being a cost center for shows to being a profit center,” said Gary Bongiovanni, editor in chief of the concert-industry trade publication Pollstar. “A venue used to charge a promoter a certain amount of money to offset the overhead of distributing the tickets and manning the box office. Whatever convenience fee on the tickets was nominal: 25 cents, 50 cents.
“Obviously what happened with Ticketmaster was the increase of those fees created a greater revenue stream, and Ticketmaster, in making exclusive deals with facilities and promoters, guaranteed some of that fee to the facility or, say, [monolithic promoters] Clear Channel.”
Trickle-down to consumers
For consumers, that means this:
If you go to Ticketmaster’s Web site (or phone line) to buy tickets for Ashlee Simpson at the Rosemont Theatre on March 6 — because, I dunno, Sammy Sosa won’t appear in Wrigley Field until April, and you’re eager to flex those boo muscles — you have to pay $39.50 for the ticket plus an $8.45-per-ticket “convenience charge” plus a $4.25 “order processing fee” (for shipping and handling) — a 32.2 percent markup over the tickets’ face value. (The percentage gets slightly lower the more tickets you order.)
Plus, if you want to print out Ticketmaster tickets at home, you must pay an additional $2.50 per order. Goldberg said the additional cost offsets Ticketmaster’s costs in installing scanners in venues to read the bar codes on tickets.
To get online Ticketmaster tickets to Aaron Carter’s Feb. 5 House of Blues show, you must pay $30 for admission plus an $8.20 convenience charge, a $4.55 processing fee plus a $1.50-per-ticket “building facility charge.” Total markup: 47.5 percent.
Cheap shows also charge
Even the cheap shows aren’t immune. The Lovehammers’ Saturday night concert at Metro costs a mere $10, but once you’ve added the $4 Ticketmaster convenience charge, $4.55 processing fee and $1 building facility charge, you’ve jacked up the price by 95.5 percent. (And then there’s another 12 cents in city taxes.)
Metro at least allows you to avoid the Ticketmaster fees by buying tickets at the box office, an option available at most, though not all, venues.
As for those building facility fees, they came into being to aid the restoration of old theaters — Metro owner Joe Shanahan said the fee for his 1927 building is to fund a new sprinkler system — but now some newer venues, such as House of Blues, also are tacking on the charges to boost the bottom line.
Many in the industry agree that ticket prices are inflated. “I think that in general when you add up the ticket price and the convenience charge, they’re too high,” said Jerry Mickelson, co-owner of Chicago-based independent promoter Jam Productions.
Bongiovanni said 2004 concert business rallied only after across-the-board discounts were enacted to compensate for a brutal first six months. The Pollstar editor blamed the prices and corresponding fees, in large part, on the acts themselves, who demand such high guarantees that the promoters and venues must find other ways to make their money.
Mickelson complained that Clear Channel has driven up prices by paying premiums to control every date on a national tour.
Goldberg said the service fees correspond to the company’s investments in technology and personnel (“we’ve got plenty of people, believe me”) as well as the other parties’ desire to share the revenues.
“If a client wants fees, the charge will be higher,” Goldberg said. “It’s just pure economics.”
For what it’s worth, Shanahan said Ticketmaster provides Metro a service with its reliable handling of tickets and new technologies, such as Access Manager, which allows tickets to be scanned at the door instead of ripped.
`That’s just life’
“The fees are the fees,” Shanahan said. “That’s just life, unfortunately. I can’t control that. But I do see that what they do, they do well.”
Ticketmaster has exclusive deals with most of the country’s major auditoriums, which is why Pearl Jam had such a hard time touring without Ticketmaster’s involvement several years ago.
But not all rock clubs use Ticketmaster. The Northwest Side’s Abbey Pub switched from Ticketmaster to the much smaller Ticketweb a few years ago for the sake of lower service charges, Abbey owner Pat Looney said.
But then Ticketweb was bought by, yes, Ticketmaster, which Looney said tried to hike service charges “a lot” last year. Looney said he negotiated to keep the Ticketweb charges lower than those of its parent company.
Also, in contrast to Ticketmaster, the more tickets you order on Ticketweb, the lower the service charge. After all, with the exception of the small percentage that goes to the credit-card company, it costs little or no more to process six tickets than one.
Those who think high service charges are a necessary evil should look at the Chicago Symphony Orchestra and Lyric Opera of Chicago — two local institutions with considerable overhead and production costs, as well as pricey tickets and aggressive fundraising efforts.
The CSO has a particularly nifty Web site: You can see not only the seat you’re buying but also the view from that seat.
Yet neither the CSO nor the Lyric charges a service/convenience fee for buying tickets online or on the phone. You pay a flat $3 per order for shipping and handling for the CSO, $5 for the Lyric.
“We’re not-for-profit, so our service charge is just to cover the charge of processing tickets,” CSO spokeswoman LaNell Essary Armour said. “We have our own phone room, we print our own tickets, so we can do everything in-house.”
She added: “The ticket price should be the ticket price.”
Appealing process
See, the CSO and Lyric want, first and foremost, to sell you tickets, so they try to make the process as appealing as possible. That’s the general idea behind selling most stuff, isn’t it?
Airlines and hotels generally charge less for online purchases, no matter the perceived convenience. Likewise, you don’t see Amazon or other online retailers tacking on fees for their services. They’re competing for customers.
Yes, those business models are different, but movie theaters, like concert venues, contract outside companies to administer online ticket sales, and those $1/ticket service fees seem relatively reasonable.
No, the live entertainment world — and in particular the popular-music concert world — is unique in its willingness to punish or neglect its fan base. When a big name goes on tour, the thinking is that there’s no competition: Clear Channel, or maybe Jam, will promote the show, Ticketmaster will sell the tickets, and enough fans will pay whatever’s being asked.
“They’re doing this because they can,” Bongiovanni said, “not because they have to.”
