A Discourse on Ticketing Fees
When I began writing for Ticketbud a little more than a year ago, we had recently transitioned our pricing model from a fixed fee per event to a per-ticket “service fee”.
It was not the smoothest transition.
Whenever you significantly change a pricing model, you’ll always be on the receiving end of some negative feedback. We expected this and took the proactive route in educating our customers why we were making the change. Many understood and continue to get immense value out of our platform. Others used us because of our old pricing model and moved to a solution that fit their needs.
However, we’ve now served more customers than ever before and you want to know the best part? Everyone has been able to get exactly what they wanted out of the platform.
I’m going to open up a bit here with what I’ve learned over the past year. I will be as transparent as possible and give you some history on why ticket fees are so maligned. I’ll also tell you why ticket fees (in small doses) are actually great for everyone.
You’ll see a lot of ticketing companies out there use marketing to claim that fees are horrible. There was a lot of commotion when Pearl Jam and Louis C.K. protested large ticket fees. Call them whatever you’d like — “convenience” fees, service charges, booking fees (used in England as I recall), or just plain fees. They’re all the same in the end and all equally despised.
The hatred for fees all stems from actions of the early event ticketing industry, of which Ticketmaster was the most infamous actor. The ticketing company charged huge, completely unexplained fees, sometimes more than 50% of the price. They also happened to ticket virtually every single large concert. The site even has it set up to make you pay a convenience fee to print your tickets at home. In 1994, Pearl Jam testified before Congress in an antitrust suit against Ticketmaster, but nothing came of it. Regardless, Ticketmaster’s actions rubbed everyone the wrong way. As a result, companies that collect revenue via ticket fees are criticized for this common attribute.
In 2006, when more ticketing startups came onto the scene, they won a lot of support for fees that made sense. How the sites charged fees was simple and transparent, and best of all, inexpensive. With Ticketmaster, it seemed as if their fees were divined by an oracle of Delphi and you were at their mercy. What’s the lesson here? Too much of anything is a bad thing.
I’ve learned that self-service ticketing sites that generate revenue from per-ticket fees work better for everyone. Event organizers can use the platform for free if they choose to pass on the small per-ticket fee to their attendees. This makes online ticketing MORE cost-effective than before, since event organizers will not be paying a fixed fee per event. Again, with per-ticket fees added on, event organizers will not be charged anything. Our opinion is that if you’ve done the legwork to produce an exciting event, a small service fee won’t deter attendees from purchasing. Per-ticket feels also enable the ticketing company to scale with more customer support and developers, thus creating a better experience for event organizers.
So what about companies that brag about having no ticket fees and criticize those who do? Well, they have to make their money somehow, and they do that through charging event organizers some sort of subscription or a fixed price per event. That’s great, but they can end up being too expensive to use (what if your tickets are $5 and you’re expecting 20 people?) or the functionality that they provide at the price isn’t designed for a larger scale event. Try running a Comic Con expecting 1,000 people off of a $29 per event site and you’re bound to run into some issues. Meanwhile, companies that utilize service charges can scale much more efficiently and more adequately fulfill your needs.
In addition, free events on ticketing platforms often carry no service charge as a courtesy. Often, it’s done in hopes that the user will create a paid event in the future. You’ll also see discounts for nonprofits and charities.
As an anecdote, back when Ticketbud had a fixed price model, we didn’t offer a customer support line you could call. It just wasn’t cost effective! So yeah, we were cheap — in more ways than one. And it just wasn’t very sustainable either, which is why we made the transition in the first place. It’s really been a win-win, where customers who might not have been able to afford $XX per event can now use us. We lost some larger customers that took advantage of us due to our flat pricing model, but that’s okay. I believe that a customer should use a company because they like the product, not just the price.
So, long story short, service charges have been unfairly maligned in the ticketing industry. Too often, people focus on the service charges and forget that with them, event organizers can use platforms for free. When an event organizer chooses to “eat” the service charge, then they’re only charged based off how successful they were. Ultimately it encourages companies such as ours to make YOU, the event organizer, as successful as possible. And if you’re a ticket buyer, you’re perfectly within your right to balk at fees that are too high. But, remember that companies that charge (fair) service charges aren’t out to get you, it’s simply a cost.
Ticketbud is an event registration software dedicated to helping you sell more tickets online.
