Ticket Fees

[Justin Karr]

Folks,

Ticket Fees and Surcharges: what do you think?

I'm talking here about the fees or surcharges that the customers are
presented with when they buy tickets. This comes up a lot when we
talk to people about ATHENA Tix. Commonly, it goes like this: "ticket
fees are terrible, you should eliminate them."

For a long time, I thought of this as strictly a marketing question.
The cost to sell tickets needs to be recouped somewhere. Do we reveal
this cost explicitly to the customer or do we just raise ticket prices
and roll it in?

Recent conversations are bringing me around to the idea that there are
some real software design questions here too. One use case we are
considering is where ATHENA Tix will be deployed by Regional Arts
Councils to provide a ticketing service for their member
organizations. In this case, I think the system would need to provide
the flexibility for the RAC to pass the ticketing service costs off to
the customer if they decided that is what they wanted to do. This
might be implemented as multiple purchases in a single transaction or
as accounting rules on the backend or both or some other way
entirely. Also: what does it mean for coupons, vouchers, discounts
and other pricing decisions?

I'm interested to hear both philosophical opinions and technical
needs.

Many thanks,

Justin

[Ron Evans]

I feel like I'm filing this motion just to be on the congressional record of the project, but what other revenue streams could be discovered that cover the cost of ticketing but don't impose a per-ticket fee? What if there were no per-ticket fees?

Yes, mastercard and visa charge per transaction, but a flat-rate monthly fee paid by the arts organization could cover that. If we forget about the traditional revenue model for online ticketing/AthenaTix for a moment imagine what no per-ticket fees would do to the consumer. Let's see... I could buy online instantly with no penalty, or I could call the box office, wait on the line, maybe need to leave a message to be called back, etc. etc. The former is awesome, the latter wastes my time, but for some people, they still want to talk to a body, and don't mind paying that fee.

I know somebody pays the fees when I book a ticket online at American Airlines, but I certainly never see it, and it isn't a "convenience fee" that is passed on to me. It is marketing as "no fees" to buy online, but that I'll pay a $15 fee if I talk to a person to order my ticket. Now THAT'S incentive to buy online. In most states, it is illegal for a merchant to charge extra when someone pays for a purchase via visa or mastercard -- I don't know why that doesn't seem to apply in the online space, but it should. Credit card fees are a cost of doing business and should not be passed on to the consumer as a separate fee -- it should be looked at as a savings for the arts organization, who doesn't have to pay staff 10X that amount to sit around when nobody is calling.

Coming out with a no-per-ticket fee system would also totally shake up the ticketing world, and perhaps push us towards abolishing "convenience fees" across the board for events. There might be less risk for both Athena Tix (as a monthly service fee would cover all possible ticket sales or something) and an arts organization could budget for the monthly fee. It would be a huge driver for people to work with AthenaTix... the march towards zero was accelerated by Brown Paper Ticket's ultra-low fees, so somebody is going to get there. There are lots of open-source models that could provide AthenaTix with revenue streams other than per ticket charges. Just my .02, flame away.

Ron

Ron Evans, Principal
Groupofminds.com -- arts technology planning and audience engagement
Web: http://www.groupofminds.com | Phone: 408-646-9543
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[Tim Thomas]

So with BuyPlayTix I've explored this a lot, and I settled on two models (not saying they're the best models):

a) With authorize.net integration the company provides the ticketing gateway access. They negotiate their rates with their CC provider. They pay me a flat monthly fee, and get to set their own service charges to recoup the cost. This is better for a company with accounting infrastructure since they keep more of the funds and can deal with the fact that a ticket might bring in 22.35 or 23.01 depending on how the credit card charge works out. This model allows them to build in the cost of the credit card transaction into their ticket price if they so desire.

b) With PayPal integration I have a set fee. All transactions go through BuyPlayTix's PayPal account and then I disburse the funds to the individual companies at the end of the week, minus the service charges. This greatly simplifies accounting for small companies since they get exactly the ticket price. If they sell 22 tickets at $10/piece they get $220 at the end of the week. I charge the PayPal credit card percentage plus $1 per ticket in this case. 

It's interesting because I found in talking to small companies that "b" was really preferred. I guess the transparency of it is appealing. I figured out that I could also do $1 for every $20 of ticket. So sell a $10 ticket you have a $1 service charge. Sell a $25 ticket it's $2. The producers I talked to found that too complex. The industry is used to this percentage + dollar amount system.

As a customer I like the idea of building in the cost. But I think it's a bigger education and accounting effort for producers.

-tim

[Adam Huttler]

We need to distinguish between folks running their own installation of ATHENA Tix and folks using our hosted service.

 

Anyone who’s self-hosting should be allowed to charge fees or not, according to their preference/model, right? I don’t think that’s our decision to make.

For our hosted service, one idea we’ve been batting around is going to $0 fees but charging a monthly subscription charge to the ticket seller. One concern with this approach is that producers could feel like they’re getting shafted, since traditionally they’ve been able to pass those costs on to their customers.

[Adam Huttler]

Oops – sent my last note before reading this. Seems like we’re looking at a lot of the same issues.

 

From: athena-ti...@googlegroups.com [mailto:athena-ti...@googlegroups.com] On Behalf Of Tim Thomas
Sent: Friday, March 19, 2010 3:08 PM
To: athena-ti...@googlegroups.com
Subject: Re: [athena-tix-planning] Ticket Fees

 

So with BuyPlayTix I've explored this a lot, and I settled on two models (not saying they're the best models):

[Ron Evans]

I love the subscription idea. Now, where can they cover their costs for the subscription other than fees? Maybe that exploration is part of Athena's benefit too.

Sent from my iPhone

[Adam Huttler]

That functionality belongs in either the fundraising module or the “manna from heaven” module. ;-)

[Tim Roberts ARTS Australia]

Hi

I have been a lurker until now, ok time to come out ...

I agree with all the comments so far.

In particular,

1 - There should (and can) be a difference between the stand-alone and
hosted implementations of AthenTix.
2 - There is a difference (and a different revenue model/opportunity)
between ticketing, subscriptions, donations, merchandise, and so-on.
The model/s change/s depending on whether AthenaTix is just a
ticketing (i.e. transaction related) system or more, whether that is a
fund-raising system or a fully fledged CRM option (i.e. relationship
related and all the individual trasanctions that comprise that most of
which may be non-[direct]revenue related).
3 - The trend in other industries (as noted) is toward self-service,
and serving or doing the work yourself is perceived as cheaper or
free. That is a fact that the entertainment industry is going to have
to accept as a growing fact of life. The notion of ticketing services
generating an income is going to become increasingly difficult and
perceived as a consumer barrier.
4 - Inside and outside fees must be totally flexible and variable
according to each situation. If AthenaTic does not support this there
is not much point progressing further as all if not all other
ticketing solutions already in the market offer extensive flexibility
and responsiveness to different organisation, venue, promoter,
producer, funder, partner (etc.) permutations and combinations.
5 - If organisations/venues are taking the opportunity to exit the
traditional ticketing agency model let's reinvent the model. The costs
you mention are just that costs that can be accommodated in the price.
Rather than this cumbersome practice that has evolved of endless add
ons and outside charges. So many other industries avoid this and
recommend against such practice as adding barriers to purchase and so
many entertainment organisations (particularly the arts) do not need
to add barriers to purchase. In particular, if the event producer or
owner is pricing the event and the means of distribution what is the
justification for adding excess charges? Why not learn from other
industries and absorb the costs, particuarly as you have control of
them, a full understanding/disclosure of them and they will be less
than Ticketmaster or equivalent. Charge a simpler total price.
6 - Another trend is direct from the producer to the consumer, which
again is perceived and oft delivered as a cheaper alternative. Don't
fight the trend, move with it and take the opportunity it presents.
7 - There is one caveat on all the above the dominance of venue
exclusive ticketing contracts. That defines the parameters of what a
producer or event owner may do, unfortunately.

Hopefully, AthenaTix by being an affordable and powerful alternative
can continue to discourage venues from simply selling off the rights
of event owners to deal directly with their customers.

Just a thought - "convenience fee" = a convenient (and lazy?) way for
ticketing services to gouge consumers?

Tim Roberts
ARTS Australia
www.artsoz.com.au

On Mar 20, 5:42 am, Justin Karr <justin.k...@fracturedatlas.org>
wrote:

[dharmaroad...@gmail.com]

Some groups have ticketed events more or less frequently than others, many only sporadically. A monthly fee might be too expensive for those, but might be too little to cover the costs generated by large venues/producers. Would you propose tiered service?

Isn't it more flexible and fair simply to give organizations the option of paying the transaction fee instead of passing it on to the ticket purchaser?

[Adam Huttler]

Yes, that’s seemingly the cleanest approach, and I like that it isn’t paternalistic.

 

From: athena-ti...@googlegroups.com [mailto:athena-ti...@googlegroups.com] On Behalf Of dharmaroad...@gmail.com
Sent: Tuesday, March 23, 2010 1:45 AM
To: athena-ti...@googlegroups.com
Subject: Re: [athena-tix-planning] Ticket Fees

 

Some groups have ticketed events more or less frequently than others, many only sporadically. A monthly fee might be too expensive for those, but might be too little to cover the costs generated by large venues/producers. Would you propose tiered service?

[Tim Roberts ARTS Australia]

Yes it is fairer to give the organisations the opportunity to wear the
fees internally in the price. But flexibility should still be
paramount for the organisation to decide how and where they redeem
such a 'cost'.

It sort of comes to a philosophical dilemma or recommended best
practice, following on from Ron's question about exploring other
potential revenue streams, do you take a Tessitura autocratic approach
or other? I mean Tessitura decides who they sell to or license (and
not based on business model and commercial status), maybe AthenaTix
will have to as well?

i.e. AthenaTix is only licensed to organisations that are deemed
"fair" and "equitable" and do not pass on the fees externally to
customers?

I am only mooting a direction here to reinforce the need to explore
other revenue streams and business models as suggested by Ron.

There is limited point of developing software in a mature crowded
market if there is not a significant and enduring point of
differentiation. No matter how wonderful the functionality developed
in AthenTix it will only be emulated by competitors quickly. I have
reservations about the continued standard of functionality of
Tessitura (and its closed list of integrators), but I have no doubt
about the value of its differentiation in the camoflage of a "not-for-
profit" model (oh and the fervour of it's scientology-like following).
But despite that reservation the IP of users is collated and
distributed well with conference and mini-conferences and online. They
also stay on message with the exclusion of commercial clients and
importantly keep the homogenity of the community which is important to
the perceived 'democratic' nature of the development process.

Yes an open architecture model has a different form of democracy in
action, even adhocracy, but I think this all only highlights that
there are some significant strategic/philosophical issues that offer
both the greatest challenge, and opportunity.

Tim

On Mar 23, 11:41 pm, "Adam Huttler" <adam.hutt...@fracturedatlas.org>
wrote:

> Web:http://www.groupofminds.com<http://www.groupofminds.com/>  | Phone:
> 408-646-9543
> Service Requests: cont...@groupofminds.com

>
> Read our latest post: "Your arts message: Some examples of great marketing
> messages by for-profit companies"
> and sign up via email or rss at:http://groupofminds.com/arts-marketing-articles
>
> On Fri, Mar 19, 2010 at 11:42 AM, Justin Karr
>

> <mailto:athena-tix-planning%2Bunsu...@googlegroups.com>

> For more, visit:http://groups.google.com/group/athena-tix-planning?hl=en
>
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[Drew McManus]

This is a good discussion thread and it looks like consensus is
gravitating toward flexibility, whihc I agree is a better model to
adopt. It also seems as though the discussion has evolved from end
user ticket fees to Athena's potential business model and although
they are far from mutually exclusive, it is separated enough from the
ticket fee issue to be its own thread.

Another consideration here is the potential benefits in creating a
system that provides the flexibility for users to itemize or
incorporate fees as desired to hedge their bet as it were in response
to growing discontent with large players like Ticketmaster/Live
Nation.