Ticketmaster on hidden fees: “We get it” — is the travel industry next?

To get an idea where this nonsense with hidden fees is headed, consider what just happened at Ticketmaster.

The ticket broker, which has been harshly criticized for not featuring an “all-in” price for its tickets, announced to the world yesterday that it would rebundle its prices.

“We get it,” wrote Ticketmaster’s CEO, Nathan Hubbard. “You don’t like service fees.”

He continues,

You don’t like them mostly because you don’t understand what the heck they are for.

…

All of the research we’ve done, and all of our conversations with fans like you tell us that the way we present these fees in the check out process is a huge frustration for you and hurts ticket sales. You just want to know UP FRONT in the buying process how much of your hard earned money you are being asked to pay for a given seat.

If we are as transparent as possible with you sooner in the purchase process, you can make the decision about how much you want to pay to go to an event.

The problem is that historically we haven’t told you how much you have to pay for a given seat until very late in the buying process. And our data tells us this angers many of you to the point that you abandon your purchase once you see the total cost, and that you don’t come back.

The data also says (and this is the important piece) that if we had told you up front what the total cost was, you would have bought the ticket! So by perpetuating this antiquated fee presentation, fans are getting upset, while we and our clients are losing ticket sales.

This is interesting one a few levels.

First, it suggests Ticketmaster has long known that service fees were making its customers crazy. Just as the travel industry, from airlines to resorts, surely must know that their fees are driving travelers nuts.

Why didn’t Ticketmaster act sooner?

Second, its research says people wouldn’t abandon a purchase and might, in fact, go through with it, if they had an all-inclusive price. I believe this applies to travelers, too. Look companies like Southwest Airlines and Homewood Suites and Four Points, where almost everything is included. They’re doing fine, aren’t they?

Third, and most interestingly, is that Ticketmaster calls the practice “antiquated.” Ouch. A la carte pricing is outdated. True, certainly, for concert tickets. True for travel, too? I think so.

What is the travel industry waiting for? Ancillary fees may work in the short term, but long-term, they will drive your customers away. Ticketmaster knows. Some of the most successful companies in the travel space already do, too.

What part of antiquated don’t they understand?

PS: Speaking of fees, you can still take the Consumer Travel Alliance poll on airline fees. Your feedback is important.

(Photo: Rick/Flickr Creative Commons)

  • Jake

    I’ve avoided Ticketmaster for years because of this practice, and will probably continue to do so for as long as they had it in place – call it the penalty time, if you will. After that, I’ll take another look at their product and see if the price is fair.

  • noah

    There’s a huge difference between TM and airlines. People have plenty of choices for entertainment, many of which do not include unbundled fees. There is very little choice in terms of long distance travel — nobody’s taking Amtrak across the country.

  • Roberto

    I don’t think Ticketmaster service fees are truly analogous to airline ancillary fees. Ticketmaster service charges are mandatory, whereas airline ancillary fees are optional, and often aren’t charged when the ticket is purchased.

    Another thing to remember is that Ticketmaster fees are HUGE! Think of booking tickets. One person, say, is going to book a $100 concert ticket for a group of 5. But when he gets to the checkout page, the price is $140. Well, purchaser now needs to get permission from friends to spend $140 or he’s going to get left holding the bag. Will the whole group agree to the new price? Maybe so, or maybe not.

    Airlines tend to include the mandatory fees in the cost of the ticket. So if you see a $350/seat quote on AA.com, the final cost on the confirmation page is going to be $350/seat. Of course, you will be forced to pay to check a bag, etc., but that’s another matter. This is different from ticketmaster, who piles on the big surcharges before the initial purchase is even made. The customer can, and it seems often does, say, “forget this.”

    Even hotels are a little different with their mandatory resort fees. They ding you with ‘em at checkout, so it’s too late to refuse the initial purchase. I’m not saying what they do is right, just saying it’s different from ticketmaster.

    That being said, I try to avoid booking tickets through ticketmaster because their fees are HUGE and they really torque me off. Not always possible, but I always try. Good for them for quoting an inclusive price, though.

  • Katie

    Of course, it doesn’t change the fact that Ticketmaster and other ticket sellers charge ridiculously high amounts for stuff they can’t explain, like a venue fee and a handling fee and a convenience fee. If I can ONLY buy a certain ticket through Ticketmaster, how is that “convenient”? I’ve cut way back on my ticket purchases because of the fees, and I don’t think that will change just because they tell me earlier in the process how much I’m being gouged.

  • cjr

    “You don’t like them mostly because you don’t understand what the heck they are for.”

    Maybe it’s just me, but this reeks of arrogance and a complete lack of understanding of people who are sick and tired of fee after fee after fee.

  • Liz

    At least the airlines don’t charge you to print out your own tickets, at home, on your own printer.

    Yet.

  • Mel

    I’ll be interested to see this in effect. I’ve never begrudged a service fee, but what has always ticked me about Ticketmaster (no pun intended, honest) was that the charge isn’t per order, it’s per ticket. There is no more work involved in processing my 4 tickets for a concert than for 1, yet I’m charged an additional $12.50 for each one. So, for years I’ve gone stright to the ticket window at the venue for my tickets, rather than deal w/ Ticketmaster. I’ll give them the benefit of the doubt….once….and see how it goes under their new operating model.

  • David Z

    I don’t think Ticketmaster service fees are truly analogous to airline ancillary fees. Ticketmaster service charges are mandatory, whereas airline ancillary fees are optional, and often aren’t charged when the ticket is purchased.

    No worries on that, Roberto. Analogies can only compare so much, as long as they try to help understand a certain point or two.

    In this case, a point here is consumers essentially want travel vendors to display an all-inclusive price (perhaps preferably on one or two pages after) prior to purchase.

    Maybe it’s just me, but this reeks of arrogance and a complete lack of understanding of people who are sick and tired of fee after fee after fee.

    Or…they’re also showing their frustration at how or why people complain they’re charging high fees for what TM believes it “needs” to make money still. I guess TM can honestly reason out, “we believe this is our way of making money”, and some people will nevertheless be turned off and probably avoid them altogether.

    Our local records office (birth, marriage, etc.) charges a lower fee if people file straight there, but will have to endure somewhat long lines and (sometimes) the hot weather. They have a (slightly?) higher fee for the same processes, but will deliver to them within a few days and avoid the inconvenience of lining up and all.

    Of course, they’ve had some instances of screwing up something like inaccurate records, delayed delivery, etc. Overall, though, they do an arguably adequate job.

    I guess a point here is people can either: a) find a more convenient method yet pay as less as possible, or b) endure whatever hardship to purchase a less expensive ticket for something, or c) pay a little more for a little more convenience. Someone’s bound to offer a balance on those, and surely people are waiting.

  • sue

    Wow, Ticketmaster has come to the completely wrong conclusion. I’ve been forced to use Ticketmaster enough times (because it was ONLY way to buy a ticket – for some venues you can’t even go to the box office), that I know there is going to at least an extra $15 per ticket. Its not that the fee is unexpected. Its that the extra fees are outrageously high. I avoid Ticketmaster wherever possible and will continue to do so. And one of the many reasons why this is not analogous to the airline industry is that Ticketmaster has NOOO competition and as I said before, some venues only make their tickets available through this horrible company.

  • James Craven

    CE:

    BRAVO, nice research!
    The OTA, GDS or third party company that automates airfare+fees comparison will shift booking biz their way BIG time! The airline that offers “value meal” type airfare re-bundles will also shift biz their way…Maybe Google/ITA will build an automated airfare+fees comparison site, are you listening Google/ITA?

    @CravenTravels

  • Sarah Di

    The ticket company that I have to use for my local venue drives me crazy because they’ll charge 2.50 for me to print my tickets. I’ve started just arranging to pick them up at will call because it’s worth the short drive for me!

  • Carver

    Count me in as one of those who understands the analogies between ticketmaster and airline fees simply don’t work.

    Ticketmaster is a monopoly. There often aren’t any alternatives to ticketmaster. However, tickets are a luxury item.

    By comparis, airlines are not a monopoly, there may or may not be any alternatives, and flying often is necessary

  • Steve

    I have a few thoughts.

    One is that Ticketmaster is only partially right that consumers’ frustration with the service fees is that they’re unexpected or not disclosed early in the ticket-buying process. As sue said, part of the frustration stems from the fact that the fees can be ridiculously high. One of my favorite artists had a recent tour in which the Ticketmaster fees were as high as 40% of the ticket price (since the tickets themselves were quite reasonably priced). *That* is what’s ridiculous about the fees. Furthermore, there are other aspects of the fees that are annoying, like the fact that if I want to print my ticket at home it’ll cost me more than it would to have the tickets mailed to me. How does that make any sense?

    The second issue is a more basic one that’s not specific to concert tickets: I think people are fed up with prices that don’t disclose all mandatory fees as part of the base price. I have no issue with true unbundling – separating out optional items even if the optional items are used by many consumers. But if I can’t avoid paying a fee, it should be part of the base price. When I go to the grocery store and buy apples for 99 cents a pound, I don’t go to the checkout to hear that “99 cents a pound is the base price. We also charge a 5 cents per pound fuel surcharge for the transport, a 3 cents per pound electricity surcharge for the power we use in the store, a 12 cents per pound service charge to pay our employees who stocked the apples and rang you up…” and so on. The charge for all of those ancillary services is built into the price of the item, as it should be.

    Third, @noah: “People have plenty of choices for entertainment, many of which do not include unbundled fees.” I would argue that depending on how you look at it, Ticketmaster’s monopoly has larger effects than the airlines’ does. It’s true that if you absolutely must travel across the country in a short period of time, the airlines are basically your only option. However, thinking in broader terms, people have other option for *travel* (especially if it’s a vacation). They can go closer to home, where car or train transportation is more of a possibility.

    While you’re right that in terms of entertainment, people have many choices, the fact is that for a great many musicians, the only way to see them is to suck it up and pay Ticketmaster fees.

  • Mike Z

    It is official, Ticketmaster and their leaders HAVE lost touch with reality. The reason people don’t buy the tickets isn’t because of the fees, it’s because the fees are insanely high! If the fees for getting your tickets were maybe $2 each, it would be a no brainer to click the buy button. Likewise, paying $6 total for a pack of tickets sent to your home would be worth the trouble. Paying $6 per ticket when you just bought 4 of them is insane, and that is on top of their usual fees.

    The last concert I paid to go see was STP about 10 years back. When I bought the tickets I had to pay almost $12 in service charges per ticket when the tickets themselves were $24 each. Since then many of my favorite bands have come and gone, but because TM is a monopoly and I refuse to pay $$$$ any more for the pleasure of giving them my money, they have not made a dime from me. I’ll bend over and take it from someone else for less fees.

  • MVFlyer

    While TM has decided to roll all fees and admission together, it can do this because the fees are fixed and required–there’s no choice there. In a sense, TM now is kind of lying about what their take is on the ticket, vs. what the ticket itself costs (although often times there are the same fees even when purchased at the box office, which I don’t understand).

    The airlines have made a big deal about ‘unbundling’, that is paying only for what you use. How would they do this…include all of the fees added to the fare when they quote the total, and then have you check off what services you don’t need? This would make airlines like Southwest much more attractive (and a reason the other airlines won’t go for it.

  • Cindy

    The other problem with TM is that when an event that you purchased tickets for has been canceled, they will usually refund the amount of the tickets, but will not refund the amount of their fees. By the time you get done paying the additional TM fees, you could buy another ticket to the event.

    Arenas and ballparks are even getting in on the “fee” bandwagon. Instead of simply raising ticket prices, they are adding a “facilities” charge. I thought that’s what the ticket was for – access and use of a facility!

  • Bill

    The issue is that the ticketmaster fees are 10% or less of the ticket price, whereas the airline fees are often as much as or more than the fare itself. BIG difference.

  • Meredith Putvin

    Here’s why Ticketmaster finally had a encephlo-rectal extraction (Head up tail).

    Several years ago, I heard rumbles that some Rock Artists were making a move away from Ticketmaster. Plus with the advent of E-Ticket sales, Venues could sell their own tickets and not have to pay Ticketmaster’s Fees.

    Ticketmaster is like the Expedia for entertainment. If you know how to navigate the system, you can find tickets for less. I NEVER use Ticketmaster. Period, end of Story.

  • Arizona Road Warrior

    If concert tickets were advertised at $ 80 with all fees included versus $ 60 without the fees included, they will sell more tickets at $ 60 instead of $ 80 even that the final price are the same ($ 80 = $ 60 + 20 in fees).

    There are some people that will pass at $ 80 thinking that the tickets are out of their budget, etc. At $ 60, they will say these tickets are in their budget and the extra fees are ‘acceptable’ to them…some will look at the $ 20 as a separate transaction; some will fall in love with the idea of going to a concert so they will ante up the $ 20; etc.

    It is like some airlines advertising fares to Europe…the fare is $ 299 to Rome. People starts to fall in love with the idea of traveling to Rome, etc. and they end up calling the airline, going to the airline website, etc. The reality is that the fare doesn’t include taxes and fees (another $ 400 per segment); the fare is one-way; etc. If the airline listed the fare as $ 1,400, it is my guess that they will get less response.

    It is the same for new houses. The builder will advertise that prices for new homes starts at $ 300,000 as an example. The model homes has every possible options. You will fall in love with the model, etc. The bottom line is that you are going to ended up spending an additional 20 to 30% of the base price of the house for upgrades…plus additional money for the closing costs, etc. If the builder list the price of the house at $ 400,000, there will be some people that won’t take a look.

    It is the same for cars.

  • fideauxdon

    Ticketmaster’s “apology” is lame and self-serving. It is analogous to the “apologies” that famous people offer when they’re accused of slandering others when they state” For thouse who were offended by my remarks which were taken out of context…”.
    They STILL don’t get it! Their fees are obviously designed to increase their profits, and they’re still excessive.

  • Steve

    @Bill: actually, IMHO you have it backwards. It’s the airline fees that are usually around 10% of the fare (at least domestically), while the Ticketmaster fees can be an obscenely high percentage of the ticket cost. As I said, one of my favorite artists went on tour last year and at some of the venues, the tickets were $25 but the TM fees were over $10.

    @Meredith Putvin: really? As far as I’m aware, the only way to avoid buying tickets from Ticketmaster for a show in which they’re the only primary seller is to buy them from a reseller (which may be more expensive, or it may be less expensive, depending on when you buy and demand for the show). And even then, Ticketmaster still gets its fees…just not from you.

  • Steve Surjaputra

    I’m wondering whether buying a ticket at the venue box office won’t result in a fee anyway.

    I bought a ticket for a show at the Gibson Ampitheater ancillary box office located at the CityWalk. I figured since I bought it at the box office, I’d save the ticketing fee (from LiveNation).

    Wrong. I was still charged a ticketing fee. I would’ve saved time if I ordered it online and picked it up at the will call window.

  • Barbara

    Count me in as another person who will forego an event to avoid Ticketmaster. I find their explanation to be patronizing. They don’t really care because all Ticketmaster is really saying is, “We’re now going to stick it to you upfront, instead of at the backend.” (Pun intended.) Pearl Jam boycotted Ticketmaster for three years and it very much limited their ability to tour. I’m surprised Ticketmaster is allowed to be a monopoly. Gouging is illegal in many states, but profiteering is the American Way.

  • http://www.thetravelinggiraffe.com Crissy

    I rarely attend concerts because of the price, fees or not, $140 to see a show is ridiculous. I suspect that some people might be less likely to bail out on a ticket purchase once the fees are bundled again – because when they looked and saw the price was $140 and they went to pay it was actually $140 – no shockers that made the price too much.

    It’s the same as the person who is aware of baggage fees but doesn’t want to pay them and would rather fly southwest because they know what they got with the price of their ticket.

    I think over time if the travel industry gets too greedy with fees they’ll find they’ve made it too hard to plan to travel and piss too many people off. Just like TM did.

  • Geoff

    I applaud TM!!! Airlines, cruise lines, tour companies alike, do not disclose the final price untill late in the booking process. The average 3 day cruise is advertised at 199.00 but the port charges and govermnet fees can double that price. Apple vacation, a huge company in the Pittsburgh market, adds 100.00 140.00+ at check out for taxes. There is a bill, I believe, asking the tourist industry to quote 1 single total price. I have doing that for years and believe the practice to be fair and productive. There is no whining at the end. Again thanks to TM!

  • Nobody

    Steve: “I bought a ticket for a show at the Gibson Ampitheater ancillary box office located at the CityWalk. I figured since I bought it at the box office, I’d save the ticketing fee (from LiveNation).

    “Wrong. I was still charged a ticketing fee.”

    That is correct.

    Ticket fees for events are not fees. If they were fees, what difference would it be to generate a ticket for a high price event or a low price? The ticket agent is treating it like a tax, just like the governments wanting their slices of the pie.
    In other words, “You want to have a parade in my city, you have to pay!”
    “But, Carmine, you can’t try to extort money from our school.”
    “It’s not extortion. And if you talk to me that way again, I’ll have your legs broken.”