[jsabo]

For anyone else who is interested, I tried to find something about venues getting a cut but only found this (which also references a now shut down blog that I haven't checked for an archive of): http://www.laweekly.com/music/ticketmaster-and-servants-band...

Apparently during congressional testimony they mentioned that venues, and sometimes artists or promoters, get a cut of the service fee. They quote some mid-level promoters that dispute the promoter/artist fee but it doesn't really go into the venue statement. In my experience with small shows, the venue's money is baked into the ticket price, not the additional fees.

[pkteison]

The quote in that article is fairly accurate, I don't see why you dismiss it. It's congressional testimony so you can get it from the source: http://www.gpo.gov/fdsys/pkg/CHRG-111shrg54048/pdf/CHRG-111s...

"...Ticketmaster’s service charge is, you know, Ticketmaster was set up as a system where they took the heat for everybody. Ticketmaster frequently gets a minority percentage of that service charge. In that service charge are the credit card fees, the rebates to the buildings, rebates sometimes to artists, some- times rebates to promoters. So Ticketmaster has been the—we are like the IRS. We deliver bad news."

[jsabo]

I didn't mean to come across as totally dismissive, more that it was something I was unaware of and was sad I couldn't find more detail about. Good looking with the link though. I'm reading through that section now but it doesn't look like there's any follow up on that claim unfortunately. Assuming generously they're paying 4% of the ticket price to process CCs, it seems like there's still a pretty good chunk money going back to the venue.

[pdxgene]

Those cuts are typically referred to as "rebates", and yes, they're standard operating procedure.

There's an interesting history behind how this practice got started, that's a good lesson in how multi-party markets work. Back in the good old days, touring acts typically got a modest percentage of gross ticket sales for a given concert, leaving enough for the promoter and venue to cover costs and make a profit.

At some point (the 80s, maybe?), artist percentages started creeping up closer to 100% (in one ridiculous example, Jimmy Buffet got "105% of gross ticket receipts"), so venues and promoters had to make money on something other than tickets.

Since "ticketing fees" weren't calculated into the gross ticket receipts of which a percentage were due to the artist, they were a green field for exploitation and creative deal-making, like the "promoter rebates" referenced above.

In many cases (almost all venues above a certain size), venues sign exclusive ticketing company contracts that come with up-front bonuses or advances on fee rebates, which make ticketing companies kind of like cash machines (or payday loan vendors?) for venues.

The general public perception of "ticketmaster is evil" is, as with most things when you look beneath the surface, much more complicated than it appears.

Scalping itself is a related but different issue that ticketing companies and venues could certainly limit or end if they had the will, but the system works just fine for them, so there's really not much incentive to change.

[sources: various anecdotes from music industry veterans who will likely deny a lot of the above if pressed ;-]