For a new concert promoter, Ticketing pricing can be a big mystery: why is it that a local band playing at a local bar only cost $5 to get through the door, but a ticket to see Beyonce can cost over $100? And what kinds of costs go into admission anyway? In this guide, we'll show you why finding the right ticket price matters, and how to set a reasonable ticket price.
The Breakdown of a Ticket Price
There's a lot to consider when you setting the price for a ticket. From the cost of the venue to the expected earnings of the band, you need to be able to set a reasonable price for all these factors. A low ticket price won't cover all your expenses, but a high ticket price might not get enough people to the door. When setting the price, here's what most promoters are considering:
- The agreed payment to the band: Most of the ticket sales should go to the artist.
- The venue/location: How much will the venue charge?
- Ticket fees: Making tickets available online usually costs an extra service charge.
- The capacity of the space: How many people are legally allowed to attend? If you can only fill 50% of the room, how much will you earn?
- Tiered seating or general admission: Are there better seats in the house that you can charge for, or is it standing room only (general admission) where everyone pays the same ticket price?
- The cost of staging and crew: Will you require a large crew to set up lights and sound in a stadium, or just one person for a small stage in a bar? The larger the crew and stage preparation, the more you'll need to earn to cover their wages.
- Taxes: Can vary depending on the state.
- Overall expenses: Most of your revenue come from ticket sales, and therefore, ticket sales should be able to cover the entire budget for your event or tour.
- Profit: What is your margin of profit, once you pay for expenses?
3 Tips for Ticket Pricing and Earnings
With all these factors to account for, setting the ticket price can be a stressful and difficult decision. Here are 3 tips to guide you:
Know your bottom dollar, but have a goal for your profits. The most important part of setting a ticket price is to know your budget and how you're going to pay for the expenses of an event or tour. For example, it makes little sense to set a ticket price at $25 dollars per person for 500 people if it's costing you, at least, $15,000 to run the entire show. Once you know how much you need to break even, you can think about how much you can reasonably set to make a profit.
Make a best guess for attendance: As any concert promoter knows, you can't guarantee the number of people who will attend a concert, but you can learn to make good guesses based on the band and location. You'll need to know how large your band's fan base is and where the fans are concentrated before you set a ticket price. For example, a popular international band that hasn't toured the U.S. in years will draw many fans that will see this U.S. tour as a once-in-a-lifetime opportunity. But if most of your fans are in New York, having a show in Minnesota will not draw many people and can be less profitable. Therefore, you'll need to make smart tour decisions and account for the pricing in these cities.
Remember not to alienate fans (or the band): Knowing your fan base's culture and expectations will also play an important role in setting your ticket price. The band's genre and culture will also be important. For example, the famous post-hardcore band Fugazi set their prices as low as $5 per ticket to as high as $10 to $15. In contrast, seeing the Rolling Stones in concert can cost $350 per person.
Why the discrepancy? Part of that reason Fugazi set such low prices was because of their punk rock philosophy, which created a desire for musicians to play without making the show unaffordable to fans. In addition, Fugazi approached music from a do-it-yourself model, and therefore, did not require a hired crew for the tour or even an agent. In contrast, the Rolling Stones must hire a huge crew to help them with gear, touring, and set up, in addition to playing a large venue for all their fans. The Rolling Stones also play with more theatrical performance, and with rock music all about rocking out, they'll need the stage space and loud amps to accomplish their goals.
By being smart about your ticketing pricing, you can succeed in the concert business.
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