Over the last several years, music fans have increasingly been faced with sticker shock when buying concert tickets — leading many to ask why they’re paying so much to see their favorite artists. To answer that question, it’s imperative to look under the hood and consider the various factors that help determine the final price.

In today’s music industry, the bulk of artists make most of their money on the road. And to make a profit, or at least break even, artist managers, attorneys, booking agents, business managers, production managers and tour directors — as well as the artists themselves — all play a role in helping determine the right price for a show. But with production costs having risen dramatically since the pandemic, the right price is often substantially higher than it was 10 years ago. While touring crews have taken to doing less with more, scaling down their ambitions and juggling multiple jobs, fans spending hundreds of dollars to see a show often expect a spectacle — and a spectacle costs money.

“There are two pieces that really go into [determining ticket prices],” Omar Al-joulani, president of touring at Live Nation, tells Billboard. “One is that artists have given parameters around how much they need to make per night after tracking buses, staffing, production, commissions and then the profit margin they would want to make. The second is the cost of actually mounting the show: venue rent, advertising, stagehands, security, catering.”

Oftentimes, it’s the booking agent’s job to sit down with the promoter and negotiate the best deal for their artist.

“It’s definitely a back and forth,” says Chris Visconti, an agent at UTA. “There’s an honest discussion and collaboration around markets, because some can withstand a higher ticket price for a certain act, and some markets cannot. That comes down to a lot of real-world factors.”

Al-joulani explains that artist teams typically come in with price parameters, with the aim of ensuring fans at each price point have the opportunity to see a show. From there, the promoters and agents will both look at what prices recently worked within a market and provide guidance if a price for a market seems too high.

“The socioeconomic conditions of every city are different,” Visconti says. “Certainly in every country. We want to make sure it’s not a one-size-fits-all answer.”

Al-joulani says that at times, he has to tell artist teams that certain prices don’t work in particular markets. Ultimately, though, he’s not the one making the final decision.

“You debate whether an artist has to cut down their production, whether they can make the show smaller, there’s all these different levers you wind up pulling,” he says. “Ultimately, the artist makes the final call on what the fan needs to pay for an artist to go on tour.”

According to Ticketmaster’s website, a large chunk of the services and fees tacked onto ticket prices typically go toward the venue, which has its own costs, including security, bartenders, electricity and the box office. A much smaller percentage of those services and fees go to the ticketing platforms, which are told what the ticket price will be (minus the services and fees) by the promoters and artist teams. The ticketing platform used for a show depends on the venue, which typically has a partnership with a specific service. (For example, Red Rocks Amphitheatre utilizes AXS; Madison Square Garden and Sphere both have partnerships with Ticketmaster.)

Notably, the final price also depends on the venue’s size. Soft ticket rooms such as clubs already have the most expensive equipment built in, allowing artists to simply plug-and-play. That reflects in the ticket price, with shows in larger rooms often charging more to help cover the costs, while club shows can remain more affordable for fans.

“Labor is expensive, production is expensive,” says Eric Silver, a manager at Red Light Management whose clients include dance music artist Subtronics. “For a hard ticket place like Red Rocks Amphitheatre and The Gorge, it’s an empty place and you’re building everything. In the case of The Gorge, you’re even building the stage.”

Though putting on a show at a larger venue comes with additional expenses, Silver says the cost is often worth it — and can pay big dividends down the road.

“When we do these events at these hard ticket plays, they’re less profitable,” he says. “But we want to offer the best experience, and these hard-ticket plays are an investment. If you can show that you can sell out multiple nights at an arena, your value goes up to promoters for festivals, where there are less expenses.”

While the primary ticket price factors in touring and production costs, artist teams must also consider the secondary market. Al-joulani often looks at what prices sold on sites like StubHub and SeatGeek the last time an artist played in a city to help determine the price for an upcoming tour.

“We’ll look at whether a lot of tickets were transacted, whether brokers made a huge lift on a tour — that’s money not being paid to the artist or holder of the IP,” he says. “In the process — after the on-sale — you’ll look at the secondary activity and that may give you feedback on how to price releases, whether you should add a second show in a market or whether your tickets are priced correctly. And then you can always enact changes.”

When determining ticket prices, Visconti and his wife, Nicole Schoen Visconti, who works in the marketing department at UTA, also consider when a fan may choose to purchase. Some fans closely follow their favorite artists’ social media pages and sign up for SMS messages to be in line right at the on-sale. Other fans may need to wait a few days to purchase a ticket, holding off until their next paycheck. But there’s no clear answer on when in the cycle it’s best to have the lowest ticket price.

“You could punish [fans] if early bird tickets [are discounted] and then prices increase later on,” Schoen Visconti says. “With the economy and bills, some fans might not be able to make a decision until day of, or the night before. Do you drop the price to make it fair for them, but not the fans that were there first? That’s something we try to keep in mind.”

Part of Schoen Visconti’s role is to advise artist teams on the number of tickets a fan can purchase and the number of times a ticket should be allowed to transfer in an attempt to help combat scalpers. “It’s not something you can do in every state, because there are laws in New York and Illinois that you can’t limit how people transfer their tickets,” she says.

Ahead of the sales, Schoen Visconti works with clients to set up emails and SMS messages with pre-sale access codes, with the aim of getting tickets into the hands of fans. This isn’t always a foolproof system, however. In the wake of on-sales, agents, promoters and ticketing platforms look at the IP addresses for each purchase to see if scalpers managed to break through. If there are duplicates, the agents and promoters will inform the ticketing platform to cancel those tickets and re-release them back onto their primary ticketing platform. When it comes to using dynamic pricing — which includes an option to change the price of a ticket due to demand — the artist teams are ultimately the ones who make that call.

Those arguing in favor of dynamic pricing highlight that some fans are willing to pay a premium for shows, and ticket prices should adjust accordingly. But many artist teams feel dynamic pricing risks upsetting their audience, and opt against using it.

Silver says that when his clients do decide to utilize dynamic pricing, it’s put in place closer to the date of the show, versus right off the bat. “We probably weren’t going to sell those tickets anyway, and, if we do, it’s just a little bit of extra money,” he says. The profit from dynamic pricing goes back to the whole pot, split between artist and promoter depending on the percentage shares they worked out when first plotting a show.

At the end of the day, the process of pricing tickets is a delicate balancing act, as artist teams must weigh the price sensitivity of fans with what’s required to make a profit on a show.

“Our teams will sit and look at the Twitter threads and comments and take a lot of that into consideration,” Schoen Visconti says. “The artist definitely has their development and their own agenda, but they need fans to be there and support, and the fans should feel like they’re being supported.”

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