The Little Secret Of The Concert Business

Some of the biggest acts in music are hitting the road this summer: Beyonce, The Rolling Stones, Jay-Z and Justin Timberlake, just to name a few.
 
But have you tried to get tickets to see your favorite megastar?
 
You can call or go online the moment tickets go on sale, but they can be sold out in seconds.
 
Why is it so hard to get tickets to the hottest concerts?
 
That's the subject of today's Just Explain It.

You might think these concerts sell out so fast because of the high demand for tickets. But the profitable little secret of the concert business is just how small the supply of tickets actually is. In some cases, as little as seven percent of all tickets for an event go on sale to the general public.

[Related: Pricey Tickets for Rolling Stones Tour Test Limits of Live-Concert Market]
 
That was the portion of tickets up for grabs to the general public for a Justin Bieber show earlier this year. An investigation by Nashville’s NewsChannel5 found that out of close to 14,000 tickets at the city’s Bridgestone Arena, just over a thousand were available for the public onsale. Public onsale is the time tickets go on sale to the general public.
 
Why were there so few tickets available? Two words: Pre-sales.
 
Almost 5,800 of those Bieber tickets were made available to American Express customers. And another 2,900 went to people who paid to be in his fan club. Additional tickets are reserved for the artist, the tour, music industry people, promotions, and others, which left very few tickets for the public onsale.

Bieber is far from the only artist to sell so few tickets to the broader public. Pre-sales can make up the bulk of ticket sales for many concerts. In addition to pre-selling through credit cards and fan clubs, venues and ticket-sellers like TicketMaster also have pre-sales.

So, why are there so many pre-sales? It’s a business decision. Credit card, fan club and venue lists are valuable consumer data. It’s better to target potential ticket buyers who have the money and interest in a performer to guarantee the arena dates sell out.
 
That’s important for one major reason: Money. With declining record sales, concert tours are one of the few remaining places where artists can make a lot of cash. For example, Billboard magazine named Madonna music’s top-Moneymaker last year with earnings of more than $34 million dollars. More than 93-percent of that, an estimated $32 million, was made from her tour. Madonna’s tour was also the top-grossing of the year. By comparison, the physical and digital album sales portion of her earnings was estimated at just $1.5 million.
 
And whether or not you get in on one of those pre-sales, you still have to compete with scalpers. Using multiple credit cards and computer programs to bombard ticket sellers with thousands of requests, scalpers buy up large quantities of tickets to resell for a profit.
 
[Related: Kid Rock, Rolling Stones on Scalping, Summer Tours]

If this seems unfair to you, you’re not alone. Lawmakers in New York and New Jersey have put forth bills that would encourage more transparency about how many seats are actually available during public onsales.
 
What do you think? Have you had trouble getting concert tickets? What have you done to see your favorite artists? Give us your feedback in the comments section below, or on Twitter using #JustExplainItNews.

Loading...
  • Hong Kong protesters renew fight on China's National Day
    Hong Kong protesters renew fight on China's National Day

    Hong Kong (AFP) - Hong Kong protesters who braved thunderstorms to stage their third night of pro-democracy rallies began massing Wednesday at the city's Golden Bauhinia Square as China's National Day holiday lent their campaign for free elections fresh momentum.

  • The US Ebola case: 5 things to know
    The US Ebola case: 5 things to know

    Health officials on Tuesday announced the first case of Ebola diagnosed in the United States — a man isolated in intensive care at Texas Health Presbyterian Hospital in Dallas.

  • Ferguson demands high fees to turn over city files
    Ferguson demands high fees to turn over city files

    WASHINGTON (AP) — Officials in Ferguson, Missouri, are charging nearly 10 times the cost of some of their own employees' salaries before they will agree to turn over files under public records laws about the fatal shooting of 18-year-old Michael Brown.

  • Islamic State: Arab female F-16 pilot stirs debate in Muslim world
    Islamic State: Arab female F-16 pilot stirs debate in Muslim world

    Last week Mariam al-Mansouri, a F-16 pilot from the United Arab Emirates, was introduced to the world. Smiling out from under her helmet and hijab after launching air strikes in Syria, part of a US-led campaign against Islamic State, her image went viral.

  • 'Keeping Up With the Zimmermans': George's brother wanted to 'rebrand' him as reality TV star
    'Keeping Up With the Zimmermans': George's brother wanted to 'rebrand' him as reality TV star

    George Zimmerman's brother wanted to turn him into a reality television star. "I learn a lot from watching 'Keeping Up With the Kardashians,'" Robert Zimmerman Jr. told GQ.

  • First Ebola case diagnosed in the United States: CDC

    By Julie Steenhuysen and Sharon Begley (Reuters) - U.S. health officials said on Tuesday the first patient infected with the deadly Ebola virus had been diagnosed in the country after flying from Liberia to Texas, in a new sign of how the outbreak ravaging West Africa can spread globally. The patient sought treatment six days after arriving in Texas on Sept. 20, Dr. Thomas Frieden, director of the U.S. Centers for Disease Control and Prevention (CDC), told reporters on Tuesday. He was admitted two days later to an isolation room at Texas Health Presbyterian Hospital in Dallas. U.S. ...

  • Kurds seize Iraq/Syria border post; Sunni tribe joins fight against Islamic State

    By Isabel Coles and Jonny Hogg ARBIL Iraq/MURSITPINAR Turkey (Reuters) - Iraqi Kurdish troops drove Islamic State fighters from a strategic border crossing with Syria on Tuesday and won the support of members of a major Sunni tribe, in one of the biggest successes since U.S. forces began bombing the Islamists. The victory, which could make it harder for militants to operate on both sides of the frontier, was also achieved with help from Kurds from the Syrian side of the frontier, a new sign of cooperation across the border. ...

  • ‘Gapgate’ solved: Here’s why the Galaxy Note 4 has a gap between its frame and display
    ‘Gapgate’ solved: Here’s why the Galaxy Note 4 has a gap between its frame and display

    Don’t mind the gap, says Samsung. Earlier this week we started hearing reports out of Korea that some Galaxy Note 4 owners were annoyed by a gap that they found between the Note 4’s frame and its display that was apparently wide enough to fit two pieces of A4 paper inside. Now, however, AndroidCentral has discovered that this isn’t a design bug… it’s a feature. FROM EARLIER: ‘Gapgate': Samsung’s Galaxy Note 4 might have a big manufacturing problem After reading through the Galaxy Note 4’s user’s manual that came out this week, AndroidCentral found that Samsung actually talked about the gap in one section, as the company admits it designed the phone to have a gap on purpose. “This gap is

Follow Yahoo! News