The gig economy: ticket inflation is getting worse, so where does all the money go?

The news that Oasis were to reunite sparked a wave of euphoria across the nation at the end of last summer. But the nostalgia balloon was quickly punctured by the discovery that the tickets, initially priced at £148.50, had suddenly leapt to £355.20 due to dynamic pricing. The outcry quickly sparked a new debate about what constitutes a “fair” price for gig tickets, with the band themselves fanning the flames: Liam Gallagher told those bellyaching about the lack of transparency to “SHUTUP” and buy “Kneeling only” tickets for £100,000 instead.

Dynamic pricing, where the cost rises in real time in lockstep with demand, is hardly new. Parallels are often made with the surge pricing used on budget airlines and taxi-booking apps, although in the case of gig tickets, dynamic pricing means the price can rise in the few seconds it takes for consumers to complete their booking. Bruce Springsteen was caught up in the issue in 2022 for his US tour, as were huge acts such as Beyoncé, Harry Styles, Coldplay and Blackpink for their UK shows.

With costs rising across a number of industries and people’s pay packets being squeezed to breaking point, it seems reasonable to ask what truly constitutes a fair price. I spoke to a range of voices across the live music business – ticketing companies, agents, promoters and artist managers – to understand not just how prices are set but also what costs need to be covered by gig revenues.

Average ticket prices globally rose 23.3% in 2023 to $130.81 (£104.36), according to data from the live industry trade publication Pollstar, a figure that is almost 10 times the national living wage per hour (currently £11.44 but soon to rise to £12.21). That Pollstar number is, however, heavily skewed at the top end by huge acts charging huge prices for their huge shows. Go down the food chain from Oasis and Taylor Swift, who grossed more than $2bn last year, to mid-sized and smaller acts, and it becomes painfully clear that concert tickets are not the cash bonanza of common presumption.

Looking at London, which has the highest concentration of concerts and venues in the UK, tickets at the 5,000-capacity O2 Academy Brixton typically cost between £40 and £50 (before booking fees). A ticket for the 2,300-capacity O2 Forum in Kentish Town, north London, can land between £22.85 and £40. A ticket for the 150-capacity Windmill pub in Brixton could be as little as £6 but is rarely over £12.

How that revenue is broken down is complex, but the act you are paying to see only ever sees a fraction of that. “Ticket prices have barely moved in the 15 years I’ve been doing this, especially on a grassroots level,” says Matt Hanner, founder of booking agency Runway, who looks after emerging acts such as Aussie post-punkers Coldwave, with tickets to see them at the Prince Albert in Brighton in March costing £11.44.

Tom Schroeder is EVP of live agency Wasserman Music UK and his roster includes Fred Again and Raye, both of whom are now at, or approaching, arena level. “Having run 500-capacity and 700-capacity venues myself, the margins are tiny,” he says. “In the vast majority of cases, people are losing money.”

Phil Hutcheon, founder and CEO of mobile ticketing company Dice, set his company up in part to help smaller acts and independent venues sell more tickets and understands how perilous the economics are. “Mid-sized and small concert tickets are actually underpriced for what you get,” he says. “US tickets are typically 50 to 60% higher than in the UK. The US feels a bit too expensive and in the UK it feels like fans could pay a little more.” A music manager, speaking anonymously, explains that for at least one of their acts, who can play to 1,000 people in London, the cost of all their shows far exceed their fees, even with a minimal crew. At the smallest level, show losses can be substantial as they rarely sell out. “As a promoter, you can easily lose £1,000 on a 100-capacity gig,” says Hanner. “You are looking for acts that are going to move through the venues and get to a point where they’re making serious money, which really only happens at 5,000-capacity venues onwards.”

When acts get to the arena stage, things don’t suddenly become trouble-free. Overheads rise sharply and that has to be reflected in ticket prices. “On bigger shows, it’s hard not to spend money on production as the audience has a level of expectation and there’s a level of investment by the artist in having to do that,” says Niamh Byrne, co-founder of Eleven Management, which represents Blur, Gorillaz and Bastille, among others.

When spending on huge productions rises, acts will also have to ask for higher guaranteed fees to cover them. (When acts are initially booked, they are offered a fixed fee by the promoter but they may also share in ticket income if the show sells beyond expectations.) Unless arena and stadium shows completely sell out, promoters could still lose money: as the commonly quoted industry figure goes, profits are really only made in the last 10% of ticket sales.

As a result, some acts and promoters feel compelled to jack up prices to cover themselves. “For American acts [playing arenas in the UK], tickets will be well in excess of £100,” says Ian McAndrew of Wildlife Entertainment, manager of Arctic Monkeys and Fontaines DC. “Americans generally spend more on production and look for higher margins of profit. They can argue they less commonly come into the country so there’s a premium to see them.”

There are exceptions. Paul Heaton’s most recent tour has seen the former Beautiful South man play stripped-back arena shows enabling him to charge £35 a ticket. Most nights sold out and his planned show at the O2 City Hall Newcastle in December was upgraded to the city’s much larger Utilita Arena.

A bare-bones production, however, would not work for acts such as Dua Lipa, Bring Me the Horizon, Beyoncé or Kendrick Lamar. Their shows at arenas and stadiums need to astound. But as shows scale up, so do associated costs. McAndrew explains that an arena show requires at least six articulated lorries to transport everything, as well as a crew of around 45 people – from roadies and riggers to tour managers and sound/lighting engineers – who all have to be bussed or flown between shows. “The actual profit won’t be as significant as you might think because the costs are quite high,” he says. Ticket prices are usually set by the promoter who takes the biggest risk, typically working on 20% of profits after venue hire and the act’s guaranteed fee. The promoter will normally speak to the act and their agents about the proposed price to see if they feel it is not excessive for their fans or drastically out of step with the market. If they do not sell all the tickets, the act still gets their fee but the promoter absorbs the loss. “It’s a conversation between the agent and the artist as to what the ticket price should be,” says Byrne.

But what about the people selling the tickets? Laura Kramer, director and CEO of WeGotTickets, says ticketing companies may be the public-facing part of the business, but their cut of overall ticket sales is slim. WeGotTickets, for example, takes a maximum of 10%. It has to pay transaction charges on every ticket purchase and provide tools for event organisers, such as customer support and marketing, as well as handling refunds or rescheduled dates. “Our revenue is our booking fee,” says Kramer. “Without the booking fee, there is no independent ticket agent.”

While there have been legal changes in the UK whereby ticketing companies have to be fully transparent about precisely what extra costs – such as handling and transaction fees – are added to a ticket price, the business as a whole is not always transparent. There are shadowy shares of additional revenue split between ticket companies, acts and promoters. A megastar may negotiate part of the extra fees around tickets, classed as a rebate. A 2024 Which? study claimed such additional fees can add 25% to the price of tickets. There are also tales of acts securing a cut of venue bar takings and even the car parking.

And then there is dynamic pricing, an issue that only affects acts getting blockbusting guarantees anyway. It has been justified by the live business as an attempt to neutralise price gouging on secondary sites. McAndrew feels dynamic pricing has a role in the industry, but that role must be conditional. “It has a place if it’s limited and you’re essentially serving a customer who is happy to pay a premium,” such as corporate groups buying up VIP tickets for entertaining. Kramer, meanwhile, is fundamentally opposed to dynamic pricing. “I don’t think it belongs in live music at all,” she asserts. “It’s heartbreaking.”

Acts complaining about paltry payments from streaming, which followed on from the collapse of the more lucrative CD business, were instructed to play live more in order to make up for any shortfall in their income. But simply playing more shows is not a financial panacea – and there are only so many times they can play your local city or town before even the most loyal fans start to feel they are being squeezed. Ubiquity is the scourge of scarcity, the very thing live performance thrives on. Live’s economics are proving to be as imbalanced as those of streaming. The top 1% make fortunes; everyone else is just getting by.

In fact, argues Schroeder, “tickets are underpriced generally. People don’t understand the cost of touring to artists and how, in the vast majority of cases, people are losing money.” Fans may feel concert tickets cost too much, but they often cost acts far more.