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How much do concert tickets cost? Depends on how much you want to spend

Taylor Swift performs during her Reputation Stadium Tour at U.S. Bank Stadium on Friday, Aug. 31, 2018. (John Autey / St. Paul Pioneer Press)

Not long ago, it was easy to figure out the price of a concert ticket. Yes, there are additional service fees and taxes involved, but tickets went on sale at a set price and stayed that way, barring any last-minute price drops to help fill empty seats.

But now, the answer to “How much are tickets?” is increasingly “How much are you willing to pay?”

Thank dynamic pricing, increasingly common approach promoters and venues are using to move tickets. Simply put, the tickets are priced like airline seats or rental cars and fluctuate depending on demand. It’s not exactly new to the industry; Ticketmaster announced it was going to start using dynamic pricing for some shows back in 2011. The company initially focused on large sporting events and later added arena and stadium concerts as well as some smaller-scale shows.

But the practice has become much more widely known to concertgoers over the past year, and it’s not because of transparency on the part of those selling the seats. It’s because of Taylor Swift.

Last year, the pop superstar used dynamic pricing for her fifth tour, which saw her playing stadiums exclusively for the first time in her career. But the pricing model confused and angered some fans while earning copious news coverage. Rolling Stone reported a third-row seat for Swift’s June 2 show at Chicago’s Solider Field cost $995 in January. Three months later, the same seat was priced at $595.

Despite the fuss, Swift had little to complain about. Pollstar reported the tour grossed $345.1 million across 53 shows, easily beating her previous record of $258.7 million for 63 performances in 2015.

THE COMPLICATED MATH BEHIND PRICING

The method used to price tickets, whether dynamically or otherwise, is a touchy subject in the industry. Representatives from Xcel Energy Center, Target Center, Target Field, Mystic Lake Casino, Treasure Island Casino and First Avenue either declined to be interviewed for this story or deferred comment to Live Nation, the concert promoting giant that owns Ticketmaster and did not respond to an interview request.

A spokeswoman from U.S. Bank Stadium issued this statement: “There are many factors that go into how ticket prices are determined for major events, including if an event will choose to use a dynamic pricing structure. We recognize that this process may vary depending on the venue or event, however, at U.S. Bank Stadium concert pricing decisions are made by the promoter.”

Renee Alexander, deputy general manager of entertainment and marketing for the Minnesota State Fair, was more forthcoming. To be clear, however, the State Fair is unlike other concert presenters in town as it’s a quasi-state agency run under the direction of the Minnesota State Agricultural Society. It doesn’t have the same pressures to maximize profits that other venues face.

“Ticketing is a very layered issue that’s very complicated,” Alexander said. “It’s hard to tell the story in a way that doesn’t make it super complicated.”

The easiest way to explain it is that an artist comes to a venue or a promoter with a guarantee, a set price they must be paid to perform a concert, Alexander said. Revenue from ticket sales must not only cover that guarantee, but also pay for venue staff, production costs and numerous other expenses involved in staging an event.

But the process comes with a seemingly endless array of variances and exceptions, depending on the venue’s business model and ancillary sources of income, like food and beverage sales. Casinos, for example, not only hope concertgoers will see a show on site, but that they’ll also do some gambling, hit the buffet and maybe stay the night in the hotel. Add in the fact that the terms of artist contracts vary wildly and it becomes easy to understand why it’s such a complicated process.

“The main consideration I look at is the artist guarantee,” Alexander said. “If we can cover that with ticket sales, I’m happy.”

Grandstand concerts are a way for the State Fair to attract more paying customers. The Fair makes money from the $12 gate admission tickets and gets a cut of every purchase made by fans across the entire Fairgrounds, not just in the Grandstand.

“Take, say, Xcel Energy Center. They’re not getting a percentage of what you spent for dinner at Cossetta before the concert. But if you’re at the Fair and you eat at Andy’s Grille or buy a beer at O’Gara’s, we’re able to see a piece of your whole evening,” she said.

RESALE MARKET’S ROLE IN INCREASING PRICES

Another key factor in ticket pricing is the resale market. As states have moved to legalize scalping in recent decades, the secondary market has exploded and is now worth some $15 billion a year, according to the Wall Street Journal.

In fact, resale giant StubHub inadvertently pushed Taylor Swift’s team to get more aggressive about pricing after the company put out a year-end list in 2015 touting Swift’s tour as its top seller that year.

“When I saw that, I thought, ‘They’re basically bragging about how much money they made off of us,’” Swift’s promoter Louis Messina told Billboard.

And there is plenty of money to be made. A ticketing company will typically earn around $3 for a seat sold at face value, while the profit on the resale market can approach up to 25 percent of the price the ticket sells for, according to the Wall Street Journal.

With record sales continuing to fall, touring has become a much more important source of income for musicians, which has upped the awareness of the profits the secondary market is taking away from performers.

“If somebody’s going to pay $500 for a $150 ticket, the band should receive the money,” Doc McGhee, who manages Kiss, told Rolling Stone.

Ticketmaster has long said it tries to stop the resale market from using technology to buy large batches of tickets and has instituted programs like Ticketmaster Verified Fan, which the company says is meant to “protect fans from the thousands of little scalper bots trying to scoop up tickets.”

At the same time, Ticketmaster now routinely allows scalpers to list tickets on its site, putting “verified resale” tickets into the mix with those at face value and VIP options. For pop star Pink’s upcoming May 5 concert at Xcel Energy Center, Ticketmaster offered $396.95 face value seats, “official platinum” tickets as high as $580 and “verified resale” options that topped out at $800.10, according to a check of the site Wednesday evening.

Alexander said the number of options available through Ticketmaster and resale sites can be confusing for fans. “And there are sites out there that make it look like you’re purchasing tickets from the Fair when you’re not. We’ll get a call saying, ‘I can’t believe you’re charging $500 for a Grandstand ticket.’ The first thing we say is, ‘Where are you seeing that?’ It’s tough, a lot of people clearly are not understanding the source.”

DYNAMIC PRICING IS HERE TO STAY

For now, it looks like dynamic pricing is going to become more and more common, not only for big concerts, but smaller ones as well. And fans are spending more than ever. According to Pollstar, the top 10 biggest selling worldwide tours of 2018 surpassed a combined $2 billion in grosses for the first time, an increase from $1.8 million in 2017.

Some local venues’ own websites no longer list prices at all, or simply include a line that says something like “ticket prices start at $29.95.” Target Center, First Avenue and the Minnesota State Fair are among the few major players in town that clearly list prices, high and low, on their websites.

“We’ve always been transparent about our pricing,” Alexander said. “You run the risk of customer service issues if someone sitting next to you paid twice as much for the show than you did.”

Some artists take a similar approach. Country legend Garth Brooks supplies enough entertainment to meet the demand. During his 2014 comeback tour, he was upfront about prices at the Target Center. All seats were $56.87, or $70.50 with service charges, with no VIP options available. As shows sold out, he continued to add additional performances, eventually playing for more than 203,000 fans across 11 concerts.

Brooks is doing the same for his upcoming shows May 3 and 4 at U.S. Bank Stadium, where all tickets are priced at $75.77, or $94.95 with fees.

On Broadway, dynamic pricing has been around for 20 years and theatergoers are accustomed to the practice, said Mark Nerenhausen, Hennepin Theatre Trust’s president and CEO.

“It’s not a new concept by any means,” he said. “It has gotten more sophisticated and it moves faster. We’re now able to make changes much more quickly, on a much smaller scale. It might even be a single row or something like that.”

And dynamic pricing doesn’t always mean the prices continually go up. If a show isn’t selling well, ticket prices can be dropped to attract more customers. “Because we’re a nonprofit, we certainly have a vested interest in filling our halls so as many people as possible have access to the shows,” Nerenhausen said.

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