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Tom Foremski: IMHO

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When web services go bad: Ticketmaster's outrageous tax on culture - it harms society

By | October 3, 2009, 11:44am PDT

Summary: Ticketmaster buys up exclusive rights to online ticket sales and charges a collection of fees that can nearly double the price of a ticket.What value does it provide?! . . .

My daughter Sarah asked me to buy a ticket for her for a music event at a San Francisco venue. The ticket was $13.50 but I ended up feeling I’d been mugged by Ticketmaster because by check out time I had paid more than $26.

I’m used to the outrageous fees that Ticketmaster levies but they snuck one up on me that was hidden. In addition to a facility charge of $1.50 and the convenience charge of $5.90, there was a hidden order processing fee of $5.40! Total cost was $26.30!

And it could easily have been more, I could have chosen to print out the ticket for a fee of $2 instead of the “free” will call option. I could also have chosen insurance for my ticket, and other options that would have taken the price closer to $30. That’s for a $13.50 ticket!

What value has Ticketmaster provided?!

Did Ticketmaster rehearse in a garage for years so that they could play live at large San Francisco venue? Did Ticketmaster hire the venue staff and deal with the serious logisitcs of thousands of people and the safety requirements?

No, Ticketmaster’s added value was to serve up a web page and process a payment. Visa and Mastercard do that all day long for a 4 percent cut. But Ticketmaster takes nearly 100 per cent of the sales price. For what?



This is an over-the-top tax on culture from a greedy corporation that has bought monopoly rights to tens of thousands of venues. Why isn’t this a DOJ or FTC monopoly investigation?

It should be illegal to buy monopoly rights to tickets at events. If Ticketmaster believes it offers fair value then let’s open up the access and see if it can compete on its own merits. It won’t because it knows it can’t.

This is a tax on culture, it cuts down on live performances and on people getting together. My daughter is 15 and she can afford a $13.50 ticket but when it gets inflated to $26.30, she can’t and that means the artists lose out too.

Ticketmaster imposes an unfair tax on our culture by making it more expensive to attend cultural events. This is not good for our society.

If I can help it I will never buy from Ticketmaster again and I urge the FTC to block future and present acquisitions such as with Live Nation. And I urge others not to invest in Ticketmaster or any of the funds that invest in Ticketmaster [TKTM]. http://finance.yahoo.com/q/mh?s=TKTM

UPDATE: Thanks for everyone’s comments. I’ve also received quite a few emails on this topic - you can read some of them here.


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Topics

Ticketmaster Corp., Taxes, Free Trade, Personal Finance, Financial Planning, Finance, Tom Foremski

Tom Foremski reports on the business and culture of Silicon Valley at the intersection of technology and media.

Disclosure

Tom Foremski

Tom Foremski is the editor and publisher of Silicon Valley Watcher and Silicon Valley Watch. Tibco Software is an advertiser.

Biography

Tom Foremski

In May 2004, Tom Foremski became the first journalist to leave a major newspaper, the Financial Times, to make a living as a full-time journalist blogger. He writes the popular news blog Silicon Valley Watcher--reporting on the business of Silicon Valley.

Tom arrived in San Francisco in 1984, and has covered US technology markets for leading computer journals around the world.

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RE: When web services go bad: Ticketmaster's outrageous tax on culture - it harms society
yantangseo 17th Sep
@RickB9
Taking both! Thank you! cheap replica watches =)
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WOW, I had no idea it was that bad
RickB9 3rd Oct 2009
Your point by point is pretty damning.
0 Votes
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Actually, worse ...
nottheusual1 5th Oct 2009
They ahve agreements with some small venues that drive all ticket sales trough them, including box office via a retail interface to their system.

It's blackmail ...
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RE: When web services go bad: Ticketmaster's outrageous tax on culture - it harms society
yantangseo 17th Sep
@RickB9
Taking both! Thank you! cheap replica watches =)
0 Votes
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This is exactly why monopolies are bad.,,,
Basic Logic 3rd Oct 2009
If there was an alternative source of tickets for the same event, these ripoffs would cease.

The government should ban "exclusive deals" like this. The only beneficiary is Ticketmaster.
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Same here...
TucsonGuy 3rd Oct 2009
We've looked at attending several events in the past year, but after seeing charge after charge pile up, we've canceled the order and stayed home or done something else. It is ridiculous!

And... what's with the $2.00 charge to print out the tickets ON MY OWN PRINTER?????? When you see all the services out there that will convert anything to PDF at no charge, it is hard to imagine that it costs Ticketmaster 2.00 to serve a page up to me that lets me use my own printer, paper, and ink to print it out!

With so many people complaining about funding for the arts being cut, etc., I think Congress could generate a great stimulus package for the arts simply by nailing Ticketmaster to the wall!
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Contributr
Charging to print your own tickets...
foremski 3rd Oct 2009
Ticketnaster does this so that if you don't have a ticket you can't scalp it.
That way it can use its own subsidiary to sell scalped tickets. Earlier this
year it was trying to sell Bruce Springsteen tickets at up to $200 a piece
through its TicketsNow subsidiary when regular priced tickets were still
available.

http://springsteeninformationcenter.wordpress.com/2009/02/04/bruce
-springsteen-ticketmaster-ticket-scam/

Exclusive ticket deals should be outlawed.
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Even if regular priced ticket's aren't available
jctcom 5th Oct 2009
How does it's own subsidiary get tickets to scalp in the first place??

The only way is if Ticketmaster sold them to themselves!

Wow they found another new way to rip us off!
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Shipping
ferricoxide 5th Oct 2009
Not to mention that the various shipping "options" are double or more the cost of the selected shipping method. I *know* it doesn't cost them more than the cost of a first class stamp to mail them via regular post. And I know how much FedEx and UPS charge for overnight, early-delivery service (less than half what TicketBastard charges you).

And, unlike the article author's experience, they charged me for will-call at the last two events I went to.
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Same ol'
johnfenjackson@... Updated - 4th Oct 2009
Ah, some good old-fashioned journalism: highlighting the iniquities of a greedy company. I've added my vote to the 'put Ticketmaster out of business' lobby.

Once you've done that perhaps you would examine why VISA charge 4% of a transaction. It doesn't sound much does it? But every company has a computer and is already paying for their network. Every consumer has a computer and is already paying for their network. So if I spend $1000 why should VISA get as much as $40? Wouldn't an extra 4 cents of network and computing time be enough, regardless of the amount transacted?

Before VISA though, there is another industry which richly deserves to be dissolved (richly deserves, get it?). Consider the cost breakdown of an iTunes song: the artist gets only 10 cents from the 99. And you were worried about a 100% mark-up from value to charge!

I realise I don't understand the scale of the computing and network power to market, manage and distribute goods digitally on a global basis. No doubt a combination of Intel, Microsoft, Yahoo, Apple, IBM, DELL and HP could do it though. What's that you say - there is a working prototype in Sweden developed for peanuts? What's that called then? wink

There is another group to be taken to task here. Not sure what you call it in the US. Where is the watchdog organisation alledgedly protecting consumer's rights? Still asleep one suspects.

See also http://talkback.zdnet.com/5208-10532-0.html?forumID=1&threadID=69904&messageID=1338439
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Contributr
Mastercard and Visa...
foremski 4th Oct 2009
Yes, you are right, 4 per cent is probably too much to charge but there
is more than network costs involved, there is considerable security to
consider too, and they are lending money and taking some risk there.
Compared with Ticketmaster 4 per cent seems down right cheap and a
bargain.

Yes, the iTunes breakout doesn't seem fair, and partlky that's due to
Visa and Mastercard costs, which are much higher than 4 per cent in
this case and closer to 30 to 40 per cent because they don;t handle
micropayments well.

What about Amazon and their Kindle? It will charge newspapers as
much as 80 per cent to distribute their content. Surely the technology
is the commodity and the content is where the value lies? At least
Amazon/Kindle doesn't try to claim exclusive rights but maybe it will
yet...
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Liability
ferricoxide 5th Oct 2009
The difference between TicketBastard and the various credit card companies is security and liability. For instance:

if someone steals your credit card and runs up a bunch of charges prior to you having the card canceled, they on the hook for the bogus charges.

If there's a data breach, either through VISA's (et. al.) or one of the credit processors, they're on the hook for any damage done.

Overall, I don't hold the fees against them, especially since it doesn't come directly out of my pocket.
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Best to leave Visa out of this discussion
NEJim 5th Oct 2009
Visa/MC have Discover, American Express, Cash and
Checks competing with them. You'll notice not
every retailer accepts all forms of payment, they
make choices that force Visa to compete with the
alternatives.

Try to buy a ticket without TicketMaster...
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Competion with Visa/MC
owner@... 5th Oct 2009
With the exception of the Illinois DMV that only accepts Discover (I don't know anyone who has a discover card anymore), every place accepts at least Visa/MC. I wouldn't consider what they have a monopoly. What I would like to know is what is Live Nation's relationship to Ticketmaster. They kinda popped up all of a sudden a year or so ago and seem to dominate the Ticket market...at least here in Chicago. I would like to see it go to the individual groups selling thier own tickets on thier own web sites or the venue's website. I think Tickmaster and other ticket agents started out as a good idea to make getting tickets an easier task, rather than standing in lines and camping out at the venues like back in the 70's and 80's. Unfortunately, like pretty much everything else in Corporate America, greed took over and they just figured out more ways to grab more cash from it's customers. I took my daughter to see her favorite group earlier this year, along with 2 of her friends and the 4 tickets cost me about $125...I believe the tickets themselves were $15 each. $60 for the tickets and $65 for all the fees. My wife and I recently saw Disturbed and the ticket prices also nearly doubled the cost and that was through Live Nation. It is disgusting.
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Not sure this is really news
bobtran Updated - 4th Oct 2009
Ticketmaster has been mugging concert attendees in Colorado for over 30 years. In the 70's the prices were reasonable but then they started to climb and there doesn't seem to be any ceiling in site. Just one MORE greedy US corp that believes you are spending money that they are entitled to. When nose bleed tickets have reached $150 per seat and crowds are exceeding 30,000 (That translates to $4,500,000.00 per event) you have to start asking if the return on investment is actually worth it. It isn't to me anymore and Ticketmaster is the main reason.
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ann another coloradian being ticketraped....
ivanotter 7th Oct 2009
As a Denverite, I feel your pain...
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It may be a steep price - but it's not a tax.
CobraA1 4th Oct 2009
I'm beginning to hate how people are calling
ANY high price a tax. Especially since I'm
taking some economics classes.

A tax is something that the government gives, and
generally affects both the seller and the buyer
negatively.

It may be a steep price, it may even be a monopolistic
price - but it's not a tax. Can we stop with this
"tax" language please?
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Contributr
You are right...
foremski 4th Oct 2009
...it's not a tax in the sense of a government levied charge but I'm using
the term in it's more general meaning, a charge that exists on every
transaction (Ticketmaster transaction.) As such the meaning is clear,
imho.
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It's more like emotionally charged language.
CobraA1 4th Oct 2009
It's more like emotionally charged language designed to rattle the anger of people. I've never heard the "general meaning" being used for anything except axe grinding.
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Maybe, but it is accurate
rickmstern 5th Oct 2009
From dictionary.com:

1. a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc.
2. a burdensome charge, obligation, duty, or demand.

I think that #2 is appropriate in this case
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I read "tax" as intended by the author...
jhughs 5th Oct 2009
and the use of the word "tax" didn't rattle me anywhere near as much as the actual fees in the article, which are ridiculous compared to other online vendors. Anything that puts a strain on a system is a "tax". So yes, government taxes tax the economy. Anyway, "Outrageouse FEE on culture" wouldn't have the same ring or meaning; he meant it as a strain.

As far as axe grinding, I say fire it up! When it was "scalping" this sort of practice was illegal. Now, somehow, it's okay? Definitely not.

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Red Herring
portetl 5th Oct 2009
Your comments about axe grinding & "emotionally charged language" are red herrings and irrevelant to consideration of the point. If you disagree with the point at hand say so and support it. What is wrong with axe grinding when the underlying point is valid? Do you have a reasonable argument as to why the high markup is acceptable?
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re: red Herring
owner@... 5th Oct 2009
Exactly. As a metalhead who likes to go to concerts. I defintely have an axe to grind...which is a fitting phrase since a guitar is often refered to as an axe *grin*
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Not only clear, but accurate.
Dr. John 5th Oct 2009
You used the term correctly. Don't sweat it.
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the meaning is clear ...
JonWayn 5th Oct 2009
and the disgust is mutual. Call it what you will, its a charge (ahem - surcharge) above and beyond the price of the commodity being enjoyed that we all hate
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re: You are right
owner@... 5th Oct 2009
Since Corporate(ist) America owns our government anyway, as attested to in the Health Care and Energy debates, does it really matter if it is a corporation or the government? A tax is a tax is a tax. Tax...fees...charges...sounds like a tomAtoe/tomahtoe issue...
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What a load of BS !!
Stan57 8th Oct 2009
What a load of BS !! Theres no "general Meaning " as to the real meaning of the word TAX. Dont change the language for your own feel good articles or anyother reason.

A fee charged ("levied") by a government on a product, income, or activity. If tax is levied directly on personal or corporate income, then it is a direct tax. If tax is levied on the price of a good or service, then it is called an indirect tax. The purpose of taxation is to finance government expenditure. One of the most important uses of taxes is to finance public goods and services, such as street lighting and street cleaning. Since public goods and services do not allow a non-payer to be excluded, or allow exclusion by a consumer, there cannot be a market in the good or service, and so they need to be provided by the government or a quasi-government agency, which tend to finance themselves largely through
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Taxes may be good. These charges are not.
rarsa 8th Oct 2009
"more general meaning"...

The meaning of a tax is not a money grab.

It is meant to go back to society in services. Ticket master's charges do not go back to society.

People talk about Taxes as if it was a bad thing. Government waste is a bad thing, taxes are not. Pay to build roads, The military, public servants and in Canada even Health care for everyone!!.

Taxes help society move forward.
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Actually, No
ferricoxide 5th Oct 2009
A tax is simply a levy placed upon an entity (person, business, etc.) or a transaction. While the most known context for this is governmental, it is not limited to governmental actions. I suggest that, as part of your economics classes, you also consider looking things up in a dictionary.
0 Votes
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Try a better instructor
lobert 5th Oct 2009
This post is an example of what's wrong with our education system. If the writer
is being taught that the levies that Ticketmaster is assessing aren't taxes in the
classic sense, then that person needs a new economics instructor.
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Sheep
agrussner 5th Oct 2009
Ah, you're such a TOOL. Ticketmaster is a thief but you just don't get it.
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They just don't get it...(sigh)
slingzenarrowzuvowtrayjissforchin 5th Oct 2009
CobraA1:

Well said! Thanks for posting that. You saved me the trouble of having to make the same clarification...for all the good it did.

In my experience the importance of semantic precision is utterly lost on many people, most of whom react precisely as Mr. Foremski did; "You know what I meant."

In fact, I don't. I have never seen any coherent meaning of the word "tax" that dissociates the act of confiscating money under legitimized coercion (or the threat thereof) from the governmental entity that levies the tax. That has been the "common meaning" since the times when kings did it with impunity.

Tax? The implication is that Ticketmaster has the authority to compel you to pay under penalty of fine, imprisonment, or some other attack on your property. That's simply not true. You can just say no to their service. You can't do that with a tax.

What is the point of calling something by a name that implies it's something completely different than what it actually is? Oh, wait...you already covered that one too:

"It's more like emotionally charged language designed to rattle the anger of people."

Yep. My bad. I forgot that the purpose of these ZDNet blogs is to generate hits, not actually inform...and certainly not to adhere to any sort of standards of journalistic integrity.

The point, for those who don't get it, is that this kind of semantic imprecision has consequences. People read such nonsense-speak and they start using it in their own speech. Eventually it migrates into their thinking, and...BAM! ...now you have people who cannot think critically about the issue of "tax" because their own definitions are fuzzy and incoherent.

It's called entropy?the tendency toward disorder?and it applies to language as much as it applies to any other system.
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You too are misinformed
Dr. John 5th Oct 2009
The word was used in the 13th century in the manner the author used. Because YOU haven't seen it, doesn't mean it doesn't exist. It means simply that you are ignorant. Perhaps in the future you should spend a few moments investigating that which you plan to criticize.
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Quite eloquently put
JonWayn 5th Oct 2009
but suffers from a fallacy of bad logic:

Tax? The implication is that Ticketmaster has the authority to compel you to pay under penalty of fine, imprisonment, or some other attack on your property. That's simply not true. You can just say no to their service. You can't do that with a tax.

When I go to CVS to pick up the newspaper and the cover has the price printed as 50c, but the total cost turns out, with tax added, to be 53c, that is a tax. However, I have the right to say no just the same as with the offerings og ticket monster
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What?
Eleutherios 5th Oct 2009
First, you sound a bit full of yourself. Relax! Yeah, it's a tax, as in sales tax. Whatever you buy you have to pay a sales tax on (at least, that's the way it works in California: You pay the state 7% of any good you buy). Ticketmaster is doing the same thing, they apply their own tax (100%) to whatever you buy from them. You seem to confuse semantics and trope.
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Wrong...
ivanotter 7th Oct 2009
may I direct you to:

http://talkback.zdnet.com/5208-11474-0.html?forumID=1&threadID=69921&messageID=1339896

Or in case you are too lazy:

Tax
?noun
1. a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc.
2. a burdensome charge, obligation, duty, or demand.

See the second one? Does NOT need to be governmental. And I would definitely call these "surcharges" burdensome.
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Agreed
Mark Zivin 5th Oct 2009
Stick to your guns - you are absolutely correct that this is NOT a tax. It is a totaly outrageous monopolistic fee, but as you correctly point out - it is not levied by a government entity. And, while others have said - "what's the difference if the underlying point is correct" - the difference is that loose language leads to psychological manipulation by factions that have vested interests.
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You too.
Dr. John 5th Oct 2009
A dictionary is a useful thing.
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Very True
jmgroft@... 6th Oct 2009
For those too lazy to drag out the book, you can click here:

http://dictionary.reference.com/browse/tax
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It is a tax
Dr. John 5th Oct 2009
You're studying what I already hold a doctorate in. Yes, it is a tax. It's just not a tax in the number one definition of use for the word as a noun. As with most words in the English language, tax has more than one definition and use.

Tax
?noun
1. a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc.
2. a burdensome charge, obligation, duty, or demand.
3. a strain.
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agreed
JonWayn 5th Oct 2009
even without consulting a dictionary, remembering contexts: to say something or an experience is taxing, is to say it is streneous. Which, implies that something that exerts a strain imposes a tax. Its not always cool (can I say that) to deduce meaning from usage but I think it works here

peace out
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The Term "Tax" predates Government
Reality Bites 5th Oct 2009
It's just a term for a levied fee.
tickmaster are the troll under the bridge exacting their crossing toll/tax from all that venture near.
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Tax - it is an old usage, but it is correct
barewd 6th Oct 2009
Websters defines a tax as, among other things, a charge, cost, bill, etc., it is an old usage that goes along with another definition which is to over use something. I think you should get your head back out and look at what the author is saying instead of worrying about the use of the language.

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Perhaps if you explained how TicketMaster could provide services for free?
Vesicant 4th Oct 2009
Since you have no idea how much it costs TicketMaster to provide its services, you have no basis to say they're extortionate, except that you just don't like paying the fees. And service fees aren't unique to TicketMaster. A locals arts venue that used to use TicketMaster now runs its own ticketing service, and the arts venue wants 10% for online sales.
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No one said...
mail@... 5th Oct 2009
they should be free. That is just taking the argument to a ridiculous level. I agree they provide a service, but that service is not worth that much of a markup. Of course, as with any monopoly, you have no choice but to pay. It is unfair, and they should open up the market and see how well they fare with competition. I would guess, poorly!
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Perhaps if you explained how TicketMaster could provide services for free?
phleroy 5th Oct 2009
10% is a far cry from 100%. I'll take the 10% any day, and I am sure you can avoid it if you pay at the door there. No freebie's with Ticketmaster.
0 Votes
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Not Free At Door
ferricoxide 5th Oct 2009
At least with the venues around here, there's a fee charged for at the door purchases, as well. This comes from the fact that the door purchases still make use of the TicketBastard systems to track ticket sales and seat allocations. Yes, the fee is lower, but it's still there. It's why you'll generally see venues advertise two prices: a cheaper one for "advanced" sales and a more expensive one for "at the door" sales. Just because you don't see the fees doesn't mean they aren't reflected into your ticket price.
0 Votes
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Is it cheaper to pay people in booths handing out hundreds of tickets each
invmgr@... 5th Oct 2009
Than an automated unmanned webservice, capable of issuing 10's of thousands of tickets in a few blinks of an eye? A handful of IT people replacing hundreds or even thousands of ticket booth personel across the country.

It is flat out monopolistic greed. Counting just the $5.40 convenience fee. A 50,000 ticket event nets a cool $270,000, more than (1/4 of a million dollars) just in the convenience fee. All the while raking in truckloads more money and contributing to the unemployment of ticket booth personel. Evil

Justify that.

Oh and your local arts venue? 10% of that $13.50 ticket would be $1.35 which seems way more reasonable by comparison.

Companies like Ticketbasterd give capitalism a bad name.

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My apologies, that is $5.90 convenience $5.40 hidden.
invmgr@... 5th Oct 2009
that comes out to $515,000 or over 1/2 million dollars, for a 50,000 ticket event. Meanwhile contributing to the unemployment of ticket booth operators. Pure profit for doing nothing extra.

Justify that
0 Votes
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....that comes out to $515,000
sfaid 5th Oct 2009
There really should not be any 5th graders on this site. My 11 year old daughter could show you how to multiply with decimal points.
0 Votes
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Do The Arithmetic
Cardhu 5th Oct 2009
The arts venue charges just one tenth what Ticketmaster charges.

"Extortionist" is too strong a word. Ticketmaster is clearly a monopolistic price gouger.

That should be enough for any smart buyer to make the intelligent decision to take their business elsewhere.

Yep, I agree with the majority here. Boycott Ticketmaster.

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