4 Big Reasons Why Your Profits Are Decreasing

There is a lot of talk among brokers that profits are steadily declining and soon brokers will become a thing of the past. Some brokers blame the decline of profits solely on undercutters, but there are actually many factors to take into consideration such as:

1) Promoters are charging extremely high ticket prices – they are effectively cutting out the middle man by charging a premium price. Very high face value tickets are the biggest threat to resellers. Promoters are seeing they can hit the equilibrium price themselves so why let brokers reap the profits? Promoters have to find the price point that people can afford so the show will sell out, and also still be able to make a profit.

2) Never ending tours – a lot of performers seem to be on these never ending tours which drives profits down. People have already had their chance to see them so they aren’t willing to go into credit card debt like they were when a tour first came around.

3) The good seats aren’t sold to the public anymore. Very rarely will the top 10-15% of the seats in the house be sold to the public. Those seats are being bundled as a “VIP experience” sold well above the real face value. Casinos also give their high rollers the chance at the best seats in the house so they have first dibs as well. There are also charities or other groups that pay a lot of money to buy blocks of good seats from the promoter.

4) With ticket prices so high, even upper-middle-class fans have to pick and choose what concerts they want to go see and what ones are worth paying a premium for. A few years ago it made sense to see 6-8 shows a year, but now consumers are narrowing their scope to only 1 or 2 shows a year.

Some of you are probably wondering why I didn’t mention the current state of the economy and how it affects ticket sales. The fact is though; there will always be people willing to spend money on luxury items such as concert tickets. The reasons listed above are more direct threats to ticket brokers and they are all things that we should be aware of so we can adapt.