The event promoter's business model

Overview

Event organisers or promoters are in a stronger position to leverage ticketing when they can choose which ticketing company they use, or even choose to run their own ticketing system. In most cases however this isn't possible because the only suitable venues for the event might already have exclusive ticketing relationships in place.

Below we'll cover the ticketing options for promoters when hiring a venue with an exclusive ticketing relationship (contracted venues), and the additional strategies available when hiring a venue which doesn't dictate the ticketing service used (open venues).

Contracted venues

Ticketing often forms a key part of the venue business model. As such when a promoter hires a mid-sized or large venue, both the ticketing relationship and the ticketing fee structure will likely already be set.

However this doesn't mean there's no room to move. Venues will often have the ability in their exclusive ticketing agreement to redefine fees on an event by event basis, should they want to. This is a discussion to have with the venue before signing a hire agreement, with the outcome likely dependent on how flexible the venue is willing to be in order to secure the booking. If the event is expected to be significant for the venue, and the promoter has multiple venues they could choose from, or they have a series of events to bring to the venue under one agreement, all of those factors will create a stronger position from which the promoter can negotiate.

The important thing to keep in mind in discussions with the ticketing company is that they consider the venue their primary client, not the promoter. Any changes to ticketing arrangements will need to be agreed by the venue first who will then instruct the ticketing company as to the updated requirements.

Standard fees

In order to lower the ticketing fees the venue would have to agree to a reduction in their venue rebate, and the ticketing company may lower their net per-ticket fees at the same time. Both will be looking at their overall expected revenue from the events, and the expenses they'll incur in delivering the promoter's requirements. Higher expected ticket volumes at higher average prices, alongside lower demands for on-site services and personnel, are all factors that can lend weight to an argument for lower fees.

Sometimes a venue's exclusive ticketing agreement will specify multiple fee structures for different types of events. It's worth asking which fee structure they're using, if there's a lower one your event might qualify for, and what you would have to do (or provide by way of services on the day yourself) to qualify for the lower fee structure.

Rebates

It may also be possible to ask the ticketing company to increase one or more of their fees to provide a promoter rebate.

This could be a small increase of the booking fee on each ticket which is collected and returned to the promoter in the final settlement of funds. Likewise a transaction fee could be added, or increased in value by a small amount, and provided back to the promoter.

Another strategy larger promoters sometimes use is to ask the ticketing company to increase their inside fee to provide a rebate. As described in the ticketing fees reference this means higher costs to the promoter in the initial event P&L and a lower net settlement of event funds, from which subsequent distributions to artists, management, and others may be made on a pre-agreed percentage basis. Separately the amount of the increased inside fee is rebated to the promoter as a revenue stream not subject to the division of event funds settled earlier.

Open venues

Venues without an exclusive ticketing contract can be much easier for promoters to work with, as the promoter can bring existing relationships such as ticketing with them. This is especially important for tours, where working with a single ticketing company across all dates allows for consolidated reporting — and potentially greater insight into commercial and audience data than would otherwise be possible.

Promoter contract

Like venues, promoters might also enter into an exclusive agreement with a ticketing company. This relationship would only apply when the promoter books a venue with no exclusive contract already in place, as contracted venues will not allow them to bring their own services in.

By entering into an exclusive agreeement the promoter may be granted concessionary ticketing fees, and potentially an increased level of service. The ticketing company may also agree to provide marketing support for each event, such as promotion to their local database of potential attendees.

It's worth noting that even if the promoter has an exclusive agreement with the same ticketing company the venue has an exclusive agreement with, the promoter's negotiated terms will not apply at that venue. Again, the ticketing company's primary relationship is with the venue.

No contract

If neither the promoter nor venue has an exclusive ticketing agreement in place, it's still worthwhile for the promoter to negotiate with one or more ticketing companies, rather than simply accepting their "rack rate" ticketing fees. This is especially true for larger events.

Between fee discounts, creating additional fees to be rebated, service improvements such as providing box office or ticket scanning staff at no charge, and marketing support there are many potential requests to be made. These are all ways in which one ticketing company might add considerably more value to a promoter (and their event) than others. It never hurts to ask.

Software

Finally if the promoter has the option, running their own ticketing software instead of using a third-party ticketing company might make the most commercial sense.

The same outside fees, transaction fees, and payment processing fees could be added to each transaction but instead of being split between the ticketing company (and potentially the venue), those fees would all become revenue for the promoter and add to the event's bottom line.