Why Concert Ticket Prices are So High

For those of you who spend money on concert and movie tickets, you probably wonder from time to time why prices are so high. The simple answer is that costs are high. 

Gross profit margins might sound high, but net margins, overall, tend to be highly variable and often less than you might think, depending on the drawing power of each artist or work. 

Though content owners get the clear majority of all revenues from theatrical exhibition of movies; video streaming; music streaming or musical live performance, each value chain has some nuances that dramatically affect net proceeds for each participant in the value chain. 

In the theatrical film value chain, studios and producers get 50 percent to 60 percent of the domestic box office receipts. 

And since distributors often are owned by studios, distribution gets 10 percent to 15 percent of theatrical proceeds as well. So a studio might get as much as 60 percent to 75 percent of the box office revenues as its share of a film release. 

In the video streaming business, rights owners get as much as 50 percent to 70 percent of ad revenues but a fixed fee for licensing of content. 

In the live music value chain, performers get as much as 85 percent to 90 percent of net profits after venue and production costs. But that often works out to about five percent to 15 percent of gross ticket proceeds. 

In the recorded music value chain, rights holders (record labels, primarily) get 70 percent of proceeds from streaming royalties. 

Value chain	Rights/content holders	Distributors / platforms / intermediaries	Exhibitors / venues / other key parties
Theatrical release movie	45–55% to studios/rights holders; average U.S. theatrical split often cited around 45% to studios and 55% to theaters, with the split shifting over the run of the film	0–10% to local distributors/marketing firms in some markets; in the U.S. the distributor is typically the studio-side party already included in the rights-holder share	45–55% to theater exhibitors on average, often higher for the exhibitor later in the run
Video streaming	About 50–70% to content owners in many ad-revenue-sharing arrangements; in licensing models, the platform pays a negotiated fee rather than a fixed industry-wide split	About 30–50% retained by the platform for operating costs and margin in ad-supported models linkedin	Usually no separate exhibitor layer; delivery, app stores, or device platforms may take a small cut depending on the channel, but there is no standard theatrical-style split
Audio streaming	About 70% to rights holders is the common headline split; one current source describes Spotify-style economics as about two-thirds to rights holders overall	About 30% retained by the streaming service/platform	Often embedded within the rights-holder side are labels, publishers, administrators, and collecting societies rather than a separate “exhibitor” layer
Live performance	Roughly 70–85% to artists/rights holders on many net-door or profit-split deals after expenses, though some club deals can be 80/20 in the artist’s favor	Promoters often keep about 10–15% profit margin after recouping costs, and ticketing platforms commonly take about 3–5% plus fixed fees	Venues may take around 10–15% in some concert-organization cost breakdowns, plus bar/concession revenue; venue/promoter economics vary widely

On the other hand, net profit margins in each business are far lower, and highly dependent on the drawing power of specific artists or their movies and shows. 

Value chain	Rights/content holders	Distributors / platforms / intermediaries	Exhibitors / venues / other key parties
Theatrical release movie	Studios/producers can be very hit-driven; a broad rule of thumb is low-to-moderate single-digit to low-teens net margins over a slate, but individual films can swing from large losses to very high returns	Film distributors typically operate on thin margins after P&A, overhead, and release risk; the distribution layer is often described as a low-margin business dougshapiro.substack	Theater chains tend to run roughly 5–10% operating margins overall, with concessions far more profitable than tickets
Video streaming	Content owners’ net margin depends on whether they are licensors or vertically integrated studios; pure licensors can earn attractive margins, but studio-backed streamers often see compressed or volatile profitability because content spend is heavy	Streaming platforms have mixed economics: large incumbents can post positive margins, but the industry is structurally capital-intensive; one industry estimate puts U.S. video streaming at a 27.7% profit margin at the industry level, while other coverage notes distributor-level margins can fall into the mid-single digits after overhead	Separate exhibitors usually do not exist in streaming; device/app-store/channel partners may take fees, but they are usually not the dominant profit pool
Audio streaming	For labels, publishers, and artists, net margins vary widely; top rights owners can be highly profitable on a portfolio basis, but the economics are fragmented because royalties are shared across multiple claims	Streaming services themselves generally keep about 30% of revenue, but net margins remain modest because royalties consume most of the rest; the platform layer is margin-constrained even when scale is large	No true exhibitor layer, though app stores, telecom bundles, and device ecosystems can capture small ancillary margins mozaic
Live performance	Artists can earn high net margins on successful tours after expenses, but the range is extremely wide because production, travel, and crew costs are volatile; many deals are effectively a profit split after recoupment	Promoters usually operate on modest net margins, often around 10–15% on a successful show after recouping costs, while ticketing platforms take much smaller fee-based margins	Venues and bars can be very profitable on ancillary sales; core venue/event operations often sit in low-to-mid single-digit to low-teens margins depending on utilization and concessions

Theatrical Film	Revenue source	How they earn	Approx. margin
Studio / producer	Box office split, home video, licensing, merch, IP sequels	Owns IP and distribution rights; receives ~50–60% of domestic box office gross (higher in week 1, sliding down). Also earns from VOD, physical, sync, and franchise extensions.	~7–20% op. margin Wide variance; blockbusters cross-subsidize flops. WBD studios: ~15%; Sony Pictures: ~7%
Distributor	Distribution fee from studio	Takes 10–15% of rental receipts as a fee for marketing, P&A spend, and logistics. Typically a studio division rather than a separate company.	Bundled in studio P&A costs can equal or exceed production budget
Exhibitor (cinema chain)	Ticket sales (40–45% avg. of gross), concessions, advertising	Receives the smaller share of ticket revenue after paying the studio rental, but concessions (popcorn, soda) carry 85%+ gross margins and are retained 100%. Concessions subsidize thin ticket economics.	~2–5% net margin Ticket GM ~30%; concession GM >85%. AMC/Regal operate near breakeven overall
Talent (stars, directors)	Upfront fee + gross/net participation	A-listers receive large upfront guarantees plus "gross points" (% of revenue). Net participation is rarely meaningful due to Hollywood accounting. Below-the-line crew earn flat wages.	Highly variable Top talent negotiates gross deals; most crew earn flat rates
Guilds / collecting societies	Residuals from downstream windows	WGA, SAG-AFTRA, DGA collect residuals when films move to TV, streaming, or physical media. Streaming residuals were a core issue in the 2023 strikes.	Pass-through Residual formulas set by collective bargaining agreements

Sources: RIAA 2024 Year-End Revenue Report · MIDiA Research Recorded Music 2024 · Warner Music Group SEC Filing (2024) · Spotify Q4 2024 Earnings · Netflix Q1 2026 Shareholder Letter · Live Nation FY 2024 Results · Film Industry Valuation Report 2024 · Hollywood Reporter Studio Profit Report · Music Streaming Economy — Artists' Share (Tschmuck 2024) · Global Value of Music Copyright 2025 (Pivotal Economics) · PwC Global E&M Outlook 2025 · Fulcrum: Movie Theater Valuation Guide

Live Music	Revenue source	How they earn	Approx. margin
Artist / headliner	Guaranteed fee + back-end % of net; merchandise; VIP packages	Major artists negotiate a guarantee plus 85–90% of net profits after venue/production costs. However, touring expenses (crew, transport, production, management commissions ~15–20%) consume much of gross take-home. Merchandise has higher margin and artists retain 70–80%. Net profit to artist after all costs: often just 5–15% of gross ticket revenue.	5–15% of gross ticket rev Taylor Swift Eras Tour: $1B+ revenue in 2024. Most artists net far less after costs.
Promoter (Live Nation, AEG)	Ticket sales revenue; sponsorship; ancillary on-site spend	Funds and organizes the show. Bears the financial risk. After paying the artist guarantee and all show costs, retains residual profit. Live Nation concerts segment: ~2.8% adjusted operating margin on $19B revenue (2024). Real profits come from Ticketmaster fees and sponsorship (higher-margin segments).	Concerts: ~2–3% op. margin Live Nation Ticketmaster: ~30%+ margins. Sponsorship: ~40% margins. Concerts itself is thin.
Ticketing platform (Ticketmaster, SeatGeek)	Service fees; facility charges; convenience fees	Charges buyers a service fee (often 25–35% on top of face value) and charges venues/promoters a per-ticket fee. Effectively a toll on every transaction. High-margin, capital-light business embedded in the concert ecosystem.	~30%+ op. margin Ticketmaster (Live Nation segment) is the highest-margin part of LYV's business
Venue owner	Rental fee; F&B concessions; parking; naming rights	Charges a rental fee (flat or % of gross). Retains 100% of concessions and parking — extremely high margin. Often also charges a "hall fee" of 15–20% on artist merchandise sold on premises. Naming rights sponsorships are pure profit.	Concessions: 60–80% GM Arena operators earn more from food/drinks and parking than from rental
Manager / booking agent	Commission on artist earnings	Manager earns 15–20% of artist's gross income. Booking agent earns ~10% of the show guarantee. Both commissions come off the top before the artist covers touring costs, making net artist take-home even thinner.	~70–80% of their commission Capital-light: no production costs, commissions are near-pure income

ources: RIAA 2024 Year-End Revenue Report · MIDiA Research Recorded Music 2024 · Warner Music Group SEC Filing (2024) · Spotify Q4 2024 Earnings · Netflix Q1 2026 Shareholder Letter · Live Nation FY 2024 Results · Film Industry Valuation Report 2024 · Hollywood Reporter Studio Profit Report · Music Streaming Economy — Artists' Share (Tschmuck 2024) · Global Value of Music Copyright 2025 (Pivotal Economics) · PwC Global E&M Outlook 2025 · Fulcrum: Movie Theater Valuation Guide

Recorded Music	Revenue source	How they earn	Approx. margin
Streaming DSP (Spotify, Apple Music)	Subscription fees; ad revenue	Pays out ~70% of revenue to rights holders. After paying labels, publishers, and operating costs, margin is thin. Spotify 2024: first full-year profitability. Gross margin: 32.2% (record high). Operating margin: ~9–10%. Apple Music: bundled into Apple ecosystem, not separately disclosed.	Spotify: ~9% op. margin Revenue: €15.7B (2024). First profitable year ever. Labels capture most of the economics.
Major record label (Universal, Sony, Warner)	~55% of streaming royalty pool; physical; sync; expanded rights	Receives the largest share of streaming royalties (labels + artists combined = ~55% of DSP revenue). Labels pay artists their contracted royalty share (typically 15–25% of label receipts for signed deals). Also earns sync fees, physical sales, and expanded rights (merchandise, touring cuts for 360 deals). Warner Music recorded music operating margin: ~26%.	~20–28% op. margin Warner: 25.9% recorded music op. margin (2024 Q1). Publishing: ~21%.
Music publisher	~15% of streaming pool (publishing/mechanical rights); sync licensing; radio performance royalties	Represents songwriters and collects mechanical and performance royalties from DSPs, broadcasters, and sync. Publishing revenue growing faster than labels in 2024. Sync licensing (TV, film, ads) commands premium rates and is highly profitable. Publisher op. margins: ~20–28%.	~20–28% op. margin Warner Music Publishing OIBDA margin: ~28%. Sync is the premium revenue stream.
Artist (signed)	Artist royalty from label (15–25% of label receipts); advances against royalties	Signed artists receive an advance (recoupable) and a royalty rate on streaming revenue — typically netting $0.003–0.005 per stream after label's share. Must recoup advance before seeing net income. Featured artists get ~16.5% of the streaming pool in the best-case scenario.	~3–5% of streaming pool Signed artist nets pennies per stream. Streaming is income; touring is where artists profit.
Independent artist (direct)	Full recording royalty via distributor (e.g. DistroKid, TuneCore)	Keeps 80–100% of recording royalties (after distributor fee). Avoids label split but has no advance, no marketing support, and no label leverage with DSPs. Very few reach meaningful scale. Spotify 2024: only tracks with 1,000+ streams/year qualify for the royalty pool.	~80–100% of recording royalty 100% of a very small number. ~8.2M artists direct on streaming in 2024 — most earn <$50/yr.
Songwriter / composer	Writer's share of publishing royalties via PROs (ASCAP, BMI, SOCAN)	Receives the writer's share (50% of publishing royalties) directly from Performing Rights Organizations. Not subject to label recoupment — flows regardless. On streaming, composers/songwriters receive ~10–15% of total DSP revenue through mechanical and performance rights.	~10–15% of DSP pool More stable than artist recording royalties — PRO collections are not recoupable

Sources: RIAA 2024 Year-End Revenue Report · MIDiA Research Recorded Music 2024 · Warner Music Group SEC Filing (2024) · Spotify Q4 2024 Earnings · Netflix Q1 2026 Shareholder Letter · Live Nation FY 2024 Results · Film Industry Valuation Report 2024 · Hollywood Reporter Studio Profit Report · Music Streaming Economy — Artists' Share (Tschmuck 2024) · Global Value of Music Copyright 2025 (Pivotal Economics) · PwC Global E&M Outlook 2025 · Fulcrum: Movie Theater Valuation Guide

Video Streaming	Revenue source	How they earn	Approx. margin
Streaming platform (SVOD)	Monthly subscription fees; ad revenue (AVOD/FAST tiers)	Charges subscribers directly (~$7–23/mo). Content is a fixed cost amortized across a growing subscriber base — scale is the key to margin expansion. Netflix leads with ~29.5% operating margin in 2025; Disney+/Paramount+ still unprofitable or breakeven.	Netflix: ~29% op. margin Disney+: breakeven 2024. Most others: still losing money. Scale is everything.
Studio / content owner	Licensing fees or internal content budget allocation	Can license content to third-party streamers (e.g. Sony licensing to Netflix) or produce for its own platform. Integrated studios (Disney, WBD, NBCU) use streaming to amortize content across multiple windows. Content spend is treated as an asset (amortized).	~10–20% studio margins Studios must generate enough licensing/windowing revenue to justify large content budgets
Independent production company	Production fee + possibly a backend royalty	Increasingly produces content as a "work for hire" for studios or streamers. Receives a production fee (typically 10–15% above budget) but often surrenders backend rights to the streamer. Little upside beyond the fee.	~5–15% on production fee No backend = no upside from hit shows. Streamers own all exploitation rights.
Talent / guilds	Upfront fees; streaming residuals (post-2023 deals)	Post-2023 WGA/SAG strikes: new formulas tie residuals to viewership data. Streamers now pay "success bonuses" for top-performing content. Still far lower than legacy TV backend deals.	Upfront fees; modest residuals 2023 strike resulted in higher minimums and viewership-based bonuses
Cloud / tech infrastructure	Cloud hosting, CDN, encoding fees from streamers	AWS, Google Cloud, Akamai provide streaming infrastructure. Netflix (Open Connect), Disney (BAMTech) have some proprietary infrastructure. This is a real but hidden cost in streamer economics (~5–10% of revenue).	Cloud: 20–30% op. margin AWS/Google benefit from streamer growth as infrastructure providers

Sources: RIAA 2024 Year-End Revenue Report · MIDiA Research Recorded Music 2024 · Warner Music Group SEC Filing (2024) · Spotify Q4 2024 Earnings · Netflix Q1 2026 Shareholder Letter · Live Nation FY 2024 Results · Film Industry Valuation Report 2024 · Hollywood Reporter Studio Profit Report · Music Streaming Economy — Artists' Share (Tschmuck 2024) · Global Value of Music Copyright 2025 (Pivotal Economics) · PwC Global E&M Outlook 2025 · Fulcrum: Movie Theater Valuation Guide

What a Race; What a Horse

 Sometimes you just have to truly admire what a horse can do. 

Why Metaverse Failed, AI Succeeds

“Metaverse” just never seemed to catch on, and the issue is “why?” While it is always possible to argue that the concept was simply “ahead of its time,” perhaps there were other issues as well. 

For starters, metaverse was a push toward more immersive, higher-fidelity digital environments. But as with other proposed advancements in digital media, it did not solve a broad, urgent problem for most users.

Television or movies presented in “three dimensions” also arguably are “more immersive” or “realistic,” but that never is enough to create demand. 

But some thought something more was at stake. The metaverse, some thought, would become the next computing platform, the successor to the mobile internet. 

But the technology was not compelling enough; the friction was too high; the value way too limited. The ecosystem, content base and network effects were not there. 

Compare metaverse to artificial intelligence, a general-purpose capability that can attach to almost any cognitive workflow and business process.

Use case	Metaverse value	AI value	Relative usefulness
Virtual meetings / collaboration	Moderate: better spatial presence, but often not better than video calls.	High: summarizes, transcribes, drafts follow-ups, and speeds decisions.	AI
Employee training / simulation	High in physical or risky environments, where immersion helps.	High: creates training content, coaches, quizzes, and personalizes learning.	Tie, slightly AI
Customer support	Low to moderate: immersive support is niche.	Very high: chatbots, agent assist, routing, and automated resolution.	AI
Sales / product demos	Moderate: strong for 3D visualization and experiential demos.	High: personalizes outreach, generates content, and qualifies leads.	AI
Entertainment / gaming	High: this is one of metaverse’s best-fit domains. dreamsoft4u	High: generates content, NPC behavior, personalization, and moderation.	Tie
Education	Moderate to high for immersive labs, historical reconstruction, or anatomy. dreamsoft4u	High: tutoring, summarization, feedback, and adaptive learning.	AI
Healthcare / therapy	Moderate: useful for exposure therapy, rehab, and visualization.	High: triage, documentation, diagnostics support, and patient messaging.	AI
Remote field assistance	Moderate: useful when a remote expert needs the user’s visual context. techtarget	High: guides workers, interprets data, and generates instructions.	AI
Marketing / brand experiences	Moderate: immersive campaigns can be memorable but narrow. dreamsoft4u	Very high: segmentation, content generation, ad optimization, and personalization.	AI
Commerce / shopping	Moderate: 3D storefronts help some categories like real estate or furniture.	Very high: recommendation, search, pricing, and conversational shopping.	AI
Design / visualization	High: strong when spatial understanding matters.	High: concept generation, variants, and analysis, though not always spatial.	Tie
Knowledge work / office tasks	Low to moderate: metaverse mainly changes the interface.	Very high: directly improves writing, coding, analysis, planning, and review.	AI

Where metaverse mainly extends what digital media can look and feel like, AI extends what software can do. 

A virtual world can make communication, entertainment, and simulation more realistic, but it still stays within the realm of mediated experience. 

AI, by contrast, is increasingly useful wherever humans are reasoning, drafting, classifying, predicting, summarizing, planning or making decisions.

AI adds value even when the interface stays ordinary, because it upgrades the work itself rather than just the container around the work.

Metaverse even if all the other issues had not been present) is “only” the next evolution of realism in electronic media, while AI is the next evolution of cognition. 

Perhaps virtual reality will someday deepen immersion for users. 

But AI, in principle, can affect almost every cognitive task because it can assist with language, judgment, memory, analysis, and creativity in almost every domain. 

And adoption barriers are quite low: people can use it right now, with low friction and no new hardware requirements. 

If metaverse was about the realism of the interface, AI  is about the augmentation of cognition itself. 

I don’t recall anybody arguing that metaverse was a general-purpose technology on the scale of electricity, in terms of impact,for example. It’s pretty hard to find anybody arguing AI is less than that.

When Making Productivity Assessments, Output Matters

Since productivity measurements involve a comparison of output compared to input, we cannot ascertain much by looking only at the hours people work. We have to compare those inputs to the outputs created during those hours. 

And that is the sense in which we must evaluate studies that suggest workers using AI sometimes wind up working more hours than they used to. 

To be sure, some of that might simply reflect time spent learning how to use AI. Some increased time might be consumed checking AI outputs for accuracy. 

But it is at least conceivable that outputs might be changing as well. 

AI automates routine tasks, freeing capacity and making more complex or additional work feasible and intrinsically rewarding. This can lead workers to voluntarily expand their scope, take on new roles, multitask more, or extend hours, rather than reducing total hours worked, one study found.  

Study / Source	Key Findings on Productivity & Hours/Complexity	Link
Ye & Ranganathan (UC Berkeley Haas, 2026) – Ethnographic field study	AI intensified work: faster pace, broader/more complex tasks (voluntary role expansion), extended hours without being asked. Felt rewarding short-term but risked unsustainability.	HBR Article; Haas News
ActivTrak (Observational, ~164k-443M work hours)	AI users showed intensified activity (e.g., +104% email, +145% chat, more weekend work); focused/deep work down ~9%; productivity via denser output rather than fewer hours.	Reported in WSJ/HBR coverage
Noy & Zhang (2023) – RCT with 453 college-educated professionals on writing tasks	ChatGPT: ~40% less time, +18% quality. Workers enjoyed tasks more; weaker writers benefited most (could tackle higher-quality/complex output).	Science
Dell'Acqua et al. (BCG/HBS/MIT/Wharton, 2023) – Field experiment with 758 consultants	GPT-4: +12% tasks completed, 25% faster, significantly higher quality (esp. "inside the frontier"). Enabled broader capabilities.	HBS Working Paper; MIT Sloan coverage
St. Louis Fed / Bick et al. (survey data, 2024-2025)	GenAI users: ~5.4% work hours saved (more for frequent users); implies ~33% higher productivity per AI-assisted hour. Aggregate ~1.1% U.S. productivity boost. Time savings could enable more complex work.	St. Louis Fed
Other experiments (e.g., coding/consulting)	Mixed: Gains often larger for juniors (enabling complex work); some show output increases without proportional time reduction due to scope expansion.	Various (e.g., Microsoft/Accenture Copilot trials)

In other words, it is possible that AI can result in workers doing more, rather than less; spending more input hours rather than fewer. 

That might happen because AI makes complex work more accessible and engaging. 

So working more, rather than less, is rational for career growth, intrinsic motivation, firm expectations or simply because the new work is interesting.

What we do not know yet is AI impact on productivity. We cannot only measure inputs. We have to know whether outputs have increased, and if so, by how much.