Does Your Payment Platform Handle Live Concert Ticketing Splits Well?

Ticketing and live concert revenue splits can present significant challenges for payment and financial platforms. Digital Music News joined forces with Tipalti to explore how your payments platform should handle these unique splits.

Payouts and percentages vary based on contracts, but the example below provides a general schematic constructed by The Wall Street Journal. This graph illustrates where a concertgoer’s money typically ends up and how various revenue streams are divided among stakeholders.

Regardless of the payout complexity, payment infrastructure specialists like Tipalti can automatically bucket payments based on the live ticketing splits established for each event or contract. As you can see below, who gets paid from what can quickly get confusing if you’re not tracking percentages of each sale automatically.

Who Makes Money From Concert Ticket Sales?

Artists typically only earn money from initial ticket sales and merchandise sales at the show, while the promoter generally is only paid on the initial ticket value. The venue may receive funds from ticket sale fees, parking, and any food and alcohol bought while at the venue. Meanwhile, merchandisers only benefit from merchandise sales, while the ticketing provider receives a small portion of the fee collected on the ticket sale.

Across the live concert experience, a transaction typically triggers a percentage payout to a number of suppliers and partners. While obviously complex, payment infrastructures now exist to handle most aspects of these distributions automatically once details are plugged in.

Payouts are automated based on established contracts and agreements, total sales, distributions, fees, taxes, and other predetermined variables before the event’s start. Once a transaction engine is unified with a payment platform, sales across merchandise, food and drinks, parking, ticketing, concierge services, or all of the above can be bucketed, split, and accounted for in the unified system.

Selecting the right finance and accounting systems for your music and entertainment business means getting a granular look at how revenue is earned and how it should be split—with fewer headaches to deal with thanks to the automated process.

Compliance requires that the proper payment infrastructure is in place.

Payment compliance, often a complex web of requirements across several countries, can hinder future scale and success for emerging businesses. Tipalti offers several compliance features on this fast-emerging front, including anti-money laundering screening, regulatory compliance, fraud detection, tax compliance, audit trails, data security, and role-based access.

Regulatory compliance features also include collecting and validating the necessary tax forms from payees during onboarding, ensuring data is complete and correct in real-time. Tipalti automatically calculates applicable withholding tax rates for both U.S. and non-U.S. payees based on that verified tax data.

All payees are further screened against U.S. and international blacklists to prevent payments to suspected terrorists, money launderers, and drug traffickers. Part of that is achieved through transaction monitoring, as Tipalti uses GBG Compliance for automated, risk-based transaction monitoring to flag suspicious transactions.

Tipalti’s service ensures compliance with tax regulations across 190 countries, preventing non-compliance penalties and overpayments.