Olivia Rodrigo and the Economics of World Tours
Courtesy of CNN
Former Disney actress turned pop star Olivia Rodrigo released her highly-anticipated sophomore album "Guts" and announced the world tour of the same name on September 13, 2023. Starting on February 23 and ending on August 17, the singer plans on performing 75 different shows in major cities across North America and Europe. Due to critical and commercial success with her music, the demand for the Guts world tour is massive.
Six days after announcing tour dates, Ticketmaster posted to X, formerly Twitter, that there were far more registered fans than tickets available. High demand is good news for businesses near show venues, as attendees are expected to spend hundreds of dollars on hotel tickets, travel, and dining. Additionally, local enterprises may raise prices due to the influx of demand, bringing them more profit. When Taylor Swift performed in Foxborough, Massachusetts, for the Eras Tour, hotels in the Boston area sold out and Airbnb's rentals bore prices as high as $1000 per night. Even train tickets to the stadium sold out a few short hours after release.
Although demand for the Guts world tour is good news for local economies, fans worldwide have been gathering on social media, frustrated by the cost of tickets. Originally, Ticketmaster claimed that standard tickets will range from $49.50 – $199.50 plus taxes and applicable fees in the United States, yet fans complained that the actual prices they paid were significantly higher than what Ticketmaster asserted. After waiting in the queue, some fans could only find high-priced tickets for undesirable seats. One fan complained that the ticket price in the "lower bowl on both sides of the stage and on the floor" went up to $842 (before fees) for one seat—way above the face value price.
Many Olivia Rodrigo fans have outed Ticketmaster in response to high ticket prices, accusing the company of price gouging and setting outrageous fees. Accusations like these are not uncommon for Ticketmaster. In recent years, fans of prominent artists like Taylor Swift and Drake have filed lawsuits against Ticketmaster. Moreover, it's not exclusively fans who see flaws with Ticketmaster.
Since the 2010 merger of Ticketmaster and its parent company, Live Nation, the Department of Justice has been investigating the company concerning monopolistic and antitrust business practices.
Despite all the blame levied towards Ticketmaster, Olivia Rodrigo's team is also culpable regarding the price of tickets. Artists and promoters often choose to set the most desired tickets for sale as Platinum Tickets—tickets whose prices are determined by the market's demand. For a tour like Rodrigo’s, where demand is high but the supply of seats is low, many fans are seeing prices that they weren't expecting.
Even though fans may dislike demand pricing, this pricing strategy deters scalpers from buying tickets to put on resale sites like StubHub while also allowing artists and promoters to bring in more revenue. Instead, most fans on a budget prefer that artists like Rodrigo opt to use Ticketmaster's Face Value Exchange program because it restricts transfer of tickets to keep them away from resellers and sets all resale prices to be the price the original buyer paid. Still, defenders of demand pricing argue that large tours are expensive. They necessitate that artists and management travel from city to city for months with hundreds of staffers and equipment.
"While you're leaving the venue the crew is breaking it all down, loading the trucks and moving to the next city where they rebuild everything before the doors open. Each of these people working the tour gets paid, hotel rooms, travel expenses and per diem," argues Eric Fuller, a consultant in the live music industry. After all, live music is a luxury, and many fans are willing to shell out hundreds of dollars on tickets, transportation, and accommodations to see their favorite performers. Allowing the market's demand to guide prices gives those working for the tour recognition for their work and dedication in arranging an incredible show.