Ticketing fees can range from very simple (or non-existent) to exceedingly complex, with multiple stakeholders all contributing to the final structure. At their simplest they provide a way for a ticketing company to generate revenue in order to cover the costs of providing a ticketing service. At the opposite end of the spectrum they represent a key pillar of the commercial model not only for ticketing companies, but as a significant revenue driver for both venues and large promoters.
Inside & outside fees
The first two types of ticketing fees fall into one of two groups – either inside fees or outside fees. In the sections below we define what face value means for a ticket, and how face value is related to inside and outside fees.
In order to be comfortable with the way in which ticketing fees are structured, it's helpful to understand the concept of face value. The face value of a ticket is generally what is thought of (and often communicated in event advertising) as the ticket price, before other fees or charges are added.
General Admission: $50 + booking fee
In this example the face value of the ticket is $50, regardless of the price actually paid for it. Often the ticket itself will also say $50 on it.
In event advertising, presenting ticket prices as the face value only is the right thing to do in many cases. The cost appears lower than advertising prices with fees included, and often it's not possible to know exactly what the fees will be as they can be dependent on the number of tickets purchased, the sales channel, and the payment type. Advertising only the face value of tickets is especially justified if the customer's able to purchase a ticket without paying any additional fees – for example at the door on the night.
Commonly ticket prices will be advertised with the face value and an asterisk or subtext to indicate the price is "plus booking fees", "booking fees may apply" or similar.
Booking fees (sometimes called outside fees or simply ticketing fees) are charged on top of the face value of a ticket. For example if the face value of the ticket is $50, the booking fee might be $3 for a total of $53 per ticket. These fees are classed as outside fees because they sit "outside" the face value of the ticket.
Booking fees may be charged at a fixed nominal price per ticket, a percentage of the ticket price, or both (for example 2.9% plus 10 cents per ticket). Booking fees are sometimes capped so that regardless of the number of tickets purchased in a transaction, the combined booking fees will never exceed a set limit.
As booking fees are usually charged by the ticketing company they're generally considered a cost to the ticket purchaser rather than the event organiser. Often they won't even appear on the report of charges for an organiser in their ticketing reconciliation. This is despite such fees sometimes comprising as much as 10–15% of the total cost of a ticket purchase.
Service fees by contrast are classed as inside fees because they sit "inside" the face value of the ticket. These are charges generally considered to be paid by the event organiser to the ticketing company (or at least collected by the ticketing company), and they appear as an expense in the organiser's ticketing reconciliation reports. These fees will be deducted by the ticketing company prior to settlement of ticketing funds to the organiser.
Inside & outside fee example
A ticket has a face value of $50, with an outside fee of $3 and an inside fee of $1. For an order with a single ticket, purchasers will pay $53 ($50 + $3 outside fee). Event organisers will receive $49 ($50 - $1 inside fee).
If a venue has entered into an exclusive agreement with a ticketing company to provide ticketing services to their hirers, often the fees charged (on the inside, outside, or both) will include rebates paid back to the venue periodically. In this way venues have another potential revenue stream available to them beyond venue hire charges. See more about rebates below.
The third type of ticketing fees are those charged on the transaction or order itself. This often includes payment processing fees, delivery fees (often seen even for print at home or digital tickets) and fixed transaction charges. Transaction fees are often related to the quantity or type of tickets being purchased, but equally may be a fixed fee unrelated to the specific details of the order. An order might attract multiple different types of transaction fees, or none at all.
Payment fees (also called credit card fees or merchant service fees) are charged to cover the costs of processing payment for a ticketing order. Historically these have usually been a fixed percentage (e.g. 1.75%) but increasingly they also include a fixed fee component (e.g. 1.75% plus 10 cents).
The cost of processing different payment methods can vary considerably. For example processing an American Express card is usually more expensive than Visa; corporate credit cards can be more expensive than personal cards; and international cards tend to be more expensive than domestic. Sometimes these differing costs are taken into consideration when charging payment fees to ticket purchasers, and sometimes a combined aggregate fee is charged which approximates the average cost of the different payment methods accepted.
Payment fees are sometimes set up to be as cost-neutral as possible, only recovering the merchant service fee expenses by passing them through. Other times payment fees are a profit center with considerable margin added to the rates being charged for the processing itself.
Delivery fees are often charged when tickets are not delivered digitally, or include other physical items or merchandise. This might include souvenir tickets or lanyards, clothing, and other merchandise. Delivery fees may differ depending on the type of service (e.g. registered mail, courier), delivery timeframe, and urban or rural recipient address.
Delivery fees are also sometimes charged for digital delivery of print-at-home or mobile tickets.
Some venues contractually require hirers to charge a per-ticket or per-transaction venue levy which may go towards building maintenance, parking, or other services. These venue levies will often appear in aggregate as a transaction fee, or less commonly as an outside fee on each ticket.
Finally, it's not uncommon to see a fixed transaction fee charged on ticket orders. Sometimes this is instead of outside fees on each ticket, but equally may also be in addition to outside fees.
A ticketing checkout could be configured to limit the maximum number of tickets that can be purchased by a customer in a single order. This may mean multiple orders are necessary to purchase the desired number of tickets, and therefore multiple transaction fees are charged.
Rebates are one of the least well-understood aspects of the ticketing business model despite arguably having the greatest impact on the level of fees charged by ticketing companies. By design rebates are opaque. These are fees charged by the ticketing company within the usual inside, outside, and transaction fees, but redistributed to other stakeholders such as the venue or promoter. The proportion of any ticketing fee which will be rebated is almost always undisclosed to other parties.
The most common type of ticket rebate is paid to venues by their (usually exclusive) ticketing provider. This rebate often forms a key pillar of the venue business model, effectively allowing them to charge a per-ticket fee (indirectly through the ticketing company) in addition to any other commercial arrangements for venue hire.
Venue rebates might come from any of the fee types mentioned above – inside fees, outside fees, or transaction fees.
As venue rebates are generally not disclosed to the hirer this can be a source of frustration for event organisers. They may be told when hiring the venue they must use a specific ticketing company, and the ticketing company fees are (sometimes signficantly) higher than the fees charged by other ticketing companies at non-contracted venues; or higher than the fees charged by the same ticketing company at other venues. The ticketing company is blamed by hirers for being too expensive, when often the greatest impact on ticketing fees is the rebate the venue requires.
Our venue receives a 50% rebate on all inside and outside fees. In the previous example above the combined per-ticket fees were $4 (an inside fee of $1 and an outside fee of $3). In this case the venue would receive $2 (50% of $4) and the ticketing company retains the remaining $2.
Whilst less common, event organisers will also sometimes require a rebate from ticketing fees. This is most often seen as a rebate on the inside fees deducted from the settlement of ticketing funds when they're paid to event promoters.
As a result of these rebates the inside fee expenses to the promoter are higher, resulting in a lower settlement of event funds. This settlement is often the subject of further distributions by the promoter e.g. to the artist, band, and/or artist management, based on pre-agreed proportions. At some time subsequent to those distributions being made, the promoter would receive the inside fee rebates back from the ticketing company. As above with venues these rebates may be a key aspect of the commercial model for the promoter.
Whilst not technically a rebate, ticketing companies will often pay venues an annual fee to enjoy exclusive rights to provide ticketing services at a venue. This payment is sometimes called a licence fee or "key money" and might be paid at the beginning or end of the year or contract term. It may be subject to ticket volume assurances by the venue, which is where the difference between rebates and key money become less distinct. As with other expenses incurred in providing the services, a ticketing company will expect to recover these key money costs through the imposition of various ticketing fees.
Some jurisdictions have enacted consumer pricing laws and regulations related to the advertising and sales process for event tickets. It's worth ensuring you're aware of which regulations apply to you and ensuring you're compliant with all relevant legislation.
Be aware some jursidictions regulate the advertised price of tickets, and may require you to ensure the most prominent price shown in event advertising is the total minimum price a customer would have to pay to purchase a ticket through the sales channel being advertised, including all fees and charges.
For example this might mean on the first page of your ticket sales process online, showing prominently the total price that has to be paid for a single ticket bought through that website.
A related concept is drip pricing for ticketing, the situation when fees are added (and only become visible) as a customer goes through the purchase process. In a drip pricing scenario only the face value is shown on the first page of a purchase process, but unavoidable fees and charges are added on subsequent pages before payment. The practice of drip pricing is regulated in some jurisidictions.
Mighty Tix is an easily customizable SaaS-based ticketing system enabling promoters & venues to generate significantly more revenue from events than is possible with a third-party ticketing company.