Ticket thicket: Can't see forest for the fees
By Jonathan Takiff, The Philly News
October 26, 2006
NOBODY likes ticket-service charges, those seemingly random fees that boost the real cost of buying a seat to a concert or sporting event.
So when Philadelphians learned last month that the much-maligned nationwide organization Ticketmaster was to be replaced at major local venues by a homegrown ticketing operation joined at the corporate hip with the Wachovia Spectrum and the Wachovia Center, there was general rejoicing in the land.
Or at least some genuine hope that local consumers would get a better deal, now that a revenue-sharing "middleman," Ticketmaster, had been eliminated.
Comcast-Spectacor's president and chief operating officer, Peter Luukko, even promised more-modest fees "for family shows and minor-league sports" contests, as his new service on the block, ComcastTix, took over the ticketing at the two South Philly arenas and a few other area venues.
But so far, those hopes haven't exactly panned out.
In a Daily News study of upcoming Wachovia Center/Spectrum shows formerly on sale through Ticketmaster and now offered by ComcastTix, we've found that the compulsory "convenience" fees tacked onto tickets have soared 23 percent to 33 percent for concerts, and as high as 79 percent for one family/sporting event, which ComcastTix execs now say was a "mistake." In addition, the order-delivery fee has climbed more than 10 percent under ComcastTix.
Want to go see Barenaked Ladies Nov. 2 at the Wachovia Center? Besides the $60 face-value cost for a best-location seat, you'll have to fork over $10.25 per ducat for ComcastTix's brokerage service. Last month, Ticketmaster charged a $7.65 fee for the same seat.
Similar bump-ups have also been instituted for Bob Dylan's Nov. 18 Spectrum date, for Panic! At the Disco the following night at the Wachovia Center, and for Rock Star Supernova at the Wachovia Spectrum in late January.
One other comparison really left us in shock, pondering Luukko's words. The ticketing fee for the Harlem Globetrotters' 2007 tour appearance next March soared from $9.45 to $16.90 for the best ($160) seat under ComcastTix stewardship. The Trotters are scheduled for the Liacouras Center at Temple University on March 11, and the Wachovia Center the next day.
Even a measly $13 Trotters seat in the rafters carried (as of earlier this week) a surcharge of $7.35 - more than half the face price of the ticket, and quite the increase (72 percent) from the $4.25 fee Ticketmaster was getting for the same location last month.
"I'm really surprised at those numbers," said Gary Bongiovanni, editor-in-chief of the concert-business-tracking publication Pollstar. "Generally where a new operator comes to town, their pricing structure is close to what Ticketmaster was getting," he said.
John Page, chief operating officer of Global Spectrum, the arena-management subsidiary of Comcast-Spectacor, said, "We now have the ability and definitely will adjust the service charge for those Harlem Globetrotters seats." He was clearly embarrassed by that particular bit of "inadvertent" price gouging, when we brought it to his attention.
But by and large, Page defended the new price structure for ticket handling at the Wachovia Spectrum and Center, as well as for the Liacouras Center, the Sovereign Bank Arena in Trenton and the Borgata in Atlantic City, now also being serviced by ComcastTix.
\"We did an analysis, comparing our prices to other providers in the region and other markets, from L.A. to Chicago to New York. We'd like to believe that we're now pretty much in line with what the others are charging, maybe even a dollar or two under some," said the Spectacor exec. "Where the Kimmel Center would charge $11.50 [service fee] for a $55 ticket, we'll charge $9.30. A $29 ticket at the Tweeter Center carries an $8.85 service charge; on our system it's $8.40. Ticket pricing is a weird dynamic. It depends on the elasticity of the ticket market, what the market bears."
Page is on firmest ground talking about family shows and sporting events at the Wachovia Spectrum and Center. ComcastTix has held the line on fees for the current haunted-house experience "Nightmares X-Treme Scream Park" at the Spectrum, this season's "Disney On Ice" productions, and contests involving the Phantoms, the Wings, the Soul and the Kixx.
"You'll pay exactly the same service charge this year that you did last," vowed the exec. "But when you factor in inflation - and the fact that Ticketmaster probably would have raised its service prices in a new contract - we're actually saving you money, giving a discount, by maintaining those old prices." The service fee for an average $52 76ers ticket has gone up "modestly" from $7.20 to $8.10, Page said.
Bongiovanni compared ticketing charges to the nutty prices customers pay at a movie theater for popcorn and soda. In both instances, you're a captive customer, with nowhere else to turn. And in both instances, the fees represent "a significant profit center that's outside the contracted ticket-gross split that the promoter makes with a concert attraction" or movie studio.
(Although the Wachovia Spectrum and Center are simply rented to some promoters, like AEG Worldwide and Jack Utsick Presents, the arenas have enjoyed a long-term revenue-sharing relationship with the area's dominant show-producer, Electric Factory Concerts/Live Nation, conceded Page.)
Ironically, the cost of setting up a ticket-fulfillment service has been going down, not up, said Bongiovanni. "At the annual convention for arena managers, there are now lots of companies showing and selling turnkey computer operations, to get even smaller arenas into the business."
And with most customers now relying on their computers and the Internet to place orders and print out bar-coded tickets, companies like ComcastTix can also make do with a smaller infrastructure of retail ticketing outlets (currently in 20 Acme markets, soon to grow to 28, versus the 55 Ticketmaster walk-in locations in the Delaware Valley) and fewer phone operators.
"More than 70 percent of ticket sales are now going through the Internet," said Page. "The rest are split between phone orders and walk-up business. The beauty of Internet sales is that once we have a customer's e-mail address, our state-of-the-art system allows us to offer more value-added services - like advance-sale ticket notifications, prepacking the ticket with the parking fee, refreshment and souvenir money, and allowing ticket-holders to electronically 'forward' their tickets to others, when they can't use them."
FYI, there's still no service charge tacked on when you buy a ticket at the Wachovia Center/Spectrum box office, "but the time and cost of driving down here discourages most people from doing that," added Page. Over in Camden, by comparison, the Tweeter Center imposes a $5 box-office fee.
Other local presenters, like the Kimmel Center/Academy of Music, have set up their own ticketing businesses, and Live Nation (operator of the Tweeter Center, Theatre of Living Arts, Tower Theater, Electric Factory and now the House of Blues) is "considering setting up their own service when their contracts with Ticketmaster run out in 2008," said Bongiovanni.
World Cafe Live also purchased its own computerized ticketing system but doesn't use it as a profit center, said general manager Neil Sulkes. "If you buy a ticket at our box office ahead of the show - or it's a very low-cost $5-$10 event - we charge just $1 additional. That simply covers the fee we owe the company that supplied our computer hardware and software. Otherwise, we charge a flat service fee of $3 for an upstairs show, or $4 for a downstairs [main-room] show, and that goes towards paying our full-time ticketing staff of three and part-time staff of five."
Sulkes, a former general manager of the Liacouras Center, noted that "many venues vary the ticket service charge in proportion to the ticket price. But really, there's no correlation. Apart from the added processing fee from a Visa or Mastercard, your cost of providing the ticket is the same if its face value is $20 or $150.
"The philosophy at World Cafe Live is to give our customers a fair deal and a great experience on all fronts, so people don't feel they're being exploited, taken advantage of. We even e-mail our Internet customers a couple days ahead of a show, to remind them that it's coming up and their seats are reserved."
Original article published by the The Philly News.
