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Comment by iambateman | Hacker News Reader

I think there’s a massive point which gets missed on this question…

A lot of these tickets get resold on the platforms themselves. If a reseller buys the ticket, and then sells it again to the end user, Ticketmaster gets paid twice.

This point results in at least hundreds of millions in revenue. Now, if one of the platforms “cracks down” and makes it harder to buy and sell people will prefer another platform.

So platforms have a huge disincentive to do anything about resellers.

Also…more obviously, demand pressure drives the price, so scalpers are helping create a market and getting paid for it.

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>if one of the platforms “cracks down” and makes it harder to buy and sell people will prefer another platform.

1) what other platform? I'm not too intimate with this, but part of the revolt over the Taylor Swift contrversy came from how Ticketmaster as exclusive use to most of the big venues. That seems to be the other half of the issue not talked about in this article.

2) I thought this issue would be as simple as banning resales, but after reading the kind of tech (and money they pay) to invest in the scalping... idk. It'd kill off the casual scalping of someone who buys maybe a half dozen tickets. people paying hundreds for fake numbers and specialized browsers won't be deterred. And the demand for the tickets comes from the celebrities, so it's a pretty safe market as long as the concert industry stays up (so, no more COVID. Even then, it's not like it's hard to pull out).

Yup, TicketMaster/Live Nation is fully vertically integrated. They own venues, they manage artists, they sell merch - and yes they run the ticket platforms. The contracts basically require everything to stay in the family.

Sounds like theres a lot of missing legislation. The situation creates a huge conflict of interests.

Then again, scalping itself out to be illegal; it’s just a form of exploiting someone else’s work to extract money from average folk without creating any value or meaningful work.

I'm honestly not sure anymore if scalping should be delegalized. I'm increasingly convinced that it's only the problem because everyone is in on it, with artists using scalpers as "heat sinks", to get more money while pretending they're the victim, and everyone is well compensated for the role they play in the scheme. If that's the case, then the entire structure is the problem, and it starts with artists exploiting the audience looking for moral/spiritual role models.

I did some research in to this this year in the context of maybe trying to start a business to solve this - and this was the conclusion I came to. There’s lots of threads here on HN about it too. It’s a structural, market-wide issue where the primary service Ticketmaster provide is reputation laundering, and in return, large agents and promoters agree to continue to use Ticketmaster despite their reputation.

I don’t know what the solution is.

Like, don't go to overpriced concerts? How much more obvious than this should the solution be? None in that chain create value, so no need for you to feed their greed.

Isn’t it basically auction-based pricing with more steps? That’s not a fundamentally evil thing.

Scalping is exploitative and should be illegal when it’s for water and gasoline in a hurricane recovery zone.

I’m unconvinced that there is a harm when the scalping is for section 102 row 14 seat 11 at a OneDirection concert.

Lots of people want to vacation in Ibiza, so it’s expensive. Lots of people want to sit in section 102 row 14 seat 11, so it’s expensive too.

Just because someone with more money buys the seat doesn’t mean the person with less money was exploited. If that were the case, we must require all seats to be sold at the exact same price across the stadium and that price must be low enough for even the poorest person to attend.

Okay, so scalping is illegal in a hurricane. Is it also illegal for outsiders to choose not to provide goods to the sticken area because the sale price doesn't justify the cost? See https://www.youtube.com/watch?v=6jKl-SgJQVc , https://www.youtube.com/watch?v=uZuxdXmSoj4 , https://www.youtube.com/watch?v=HFXYO1W_JXw .

Now explain how scalping basic necessities in a hurricane is any different than real estate speculation.

Either way, you're buying something people need, in an effort to restrict demand, raise prices, and resell at a profit without having to add any real value.

Seems to me they could ban resales by making there be a name attached to each ticket. Just like the airlines. You need ID matching your ticket to get into the venue.

No more scalpers.

They’re already doing that and it’s disgusting.

On the contrary, I think it's excellent. Turn up, show your ID along with your ticket, and you have not been screwed by a scalper.

Need a refund? Log on to the site, get a refund, and your ticket goes back into the pool for a round 2 public release.

Those are all possible without data mining. Have always gotten a decent ticket when I planned ahead and resellers have helped me out on more than one occasion when I didn’t.

Oh, and they were usually poorer folks that I’d much rather get a brokerage fee than ticket master.

Those poorer folks already paid ticketmaster the brokerage fee when they bought the ticket.

Resellers in the sense of those scalping are not "helping you out". There wouldn't be a shortage if they didn't scab everything available.

it's no different from airline tickets

It should be. The "threat model" is entirely different, on the way to insignificant.

> If a reseller buys the ticket, and then sells it again to the end user, Ticketmaster gets paid twice.

So basically scalpers are being paid to be the scapegoat so Ticketmaster can make more money, at the expense of artists and fans.

That's right, there's no incentive from TM to "fix" this.

No, Ticketmaster is the scapegoat for artists.

Extra transactions mean extra credit card fees, the artists would strictly be better off with demand based pricing. Ticketmaster however gets to double dip and play contract shenanigans.

As a general rule more complex contracts favor the side with more experience. For example many people get hosed when leasing a car, there’s simply more levers a dealership can adjust to favor themselves.

You're looking at this from a strictly monetary lens, but the entertainment industry lives and dies on reputation. It's worth a lot of money to have someone else take the fall for the inevitable results of high demand.

Ticketmaster's one job is to launder the artist's reputation. They find ways to milk the show for more money than fans think is fair and keep a chunk of that extra cash as their fee, which from the artists' perspective is well-earned. Ticketmaster gets the blame for the scalpers and fees, the artist stays clean, and everyone makes more money than they would have if there was no one willing to be the bad guy.

You blame Ticketmaster for the double-dipping because that's what the artists are paying them for: to take the blame.

That’s a common theory, but artists like Taylor Swift are willing to take the blame and avoid Ticketmaster.

Ticketmaster has a monopoly position and is exercising monopoly power here.

Taylor Swift explicitly put the blame on Ticketmaster for the entire 2022 fiasco [0][1]. There was no taking responsibility, and she certainly wasn't avoiding Ticketmaster during that event. If she's avoiding a relationship with them in the future (I can't find any evidence of that), I'd wager it's because of their technical incompetence in handling her volume, not the sale price and the scalpers.

[0] https://www.nytimes.com/2022/11/18/arts/music/taylor-swift-e...

[1] https://www.cnbc.com/2022/11/18/taylor-swift-slams-outside-e...

Ticketmaster is still a monopoly.

What I meant is she’s avoiding the resale/scalping thing via Verified Fan to minimize the impact of scalpers. It’s still run through tickmaster.

https://help.ticketmaster.com/hc/en-us/articles/978700273934...

But Verified Fan isn’t universally applied. The individual artist make separate deals requiring it or not and they take the blame for the hassle of requiring it. I suspect but don’t know that Tickmaster also takes a larger cut for the “overhead” of Verified Fan, making this a classic monopolist lose lose situation.

PS: Rereading what I said I really wasn’t clear.

And in turn Ticketmaster is the scapegoat that shields the artists from blame. The primary service that Ticketmaster provides is to protect the artist's reputation while ensuring as much money as possible gets made per event.

But don’t artists get less because scalping happens? That is, if they priced tickets higher to start, there would be more revenue going to the artists and less going to middlemen.

The scalpers are often affiliated with the artists, directly or indirectly. Katy Perry's contract was leaked in 2011 and she had reserved the right to sell tickets through "Resellers" [0]. And as the grandparent notes, many of the scalpers sell their tickets on Ticketmaster, which in turn has a contract with the artists.

The artists would get more in the short term, but all this outrage that's currently directed at scalpers and Ticketmaster wouldn't just go away—a lot of it would still exist but be directed at the artists themselves.

[0] https://www.vulture.com/2011/05/katy_perry_reserves_the_righ...

That Katy Perry contract solves a large piece of this puzzle for me - if we are selling to scalpers direct then there has to be a deniable way for the scalers to have got the tickets another way - for example confusing ticket purchase processes

That’s how Nike does it too

Raising the face value of the tickets would eliminate scalpers but at the expense of reputation. That's why Sony and Microsoft didn't just raise the cost of the PS5 and Xbox Series X during the 2 years or so when they were sold out everywhere and only available through scalpers or if you were lucky enough to buy one at face value.

People look at high prices as "the seller is just greedy" even if they're arguably justified by the demand. If you can just relist those Taylor Swift tickets you bought at face value on Ticketmaster, they are "sold" as far as Swift herself and her record label are concerned but Ticketmaster can make extra money and presumably pays a kickback to Swift and her label. If she ceases to be the "current thing" and demand massively drops for her concerts to the point that face value is overpriced, the scalpers are left with the losses.

Sometimes scalpers do lose money. Anybody who thought Playstation VR2 was going to be high demand like the PS5 lost a ton of money getting rid of that thing below face value. Likewise, if you try to scalp tickets to an Inter Miami game on the assumption that Messi is going to be playing and it comes out that he actually won't be because he got hurt playing the last place team on the Wednesday before a Sunday game[0], you're the one who ends up losing money from the unsold ticket not the soccer teams. Which is why nobody selling high demand goods or services really cares that much about stopping scalping.

[0]: https://www.dailymail.co.uk/sport/football/article-12546567/...

> Raising the face value of the tickets would eliminate scalpers but at the expense of reputation.

They could rise the face value, but sell the first say 80% tickets at considerable discount (so that the price matches what the ticket costs today). Although perhaps this could also tarnish their relation with fans, who want to see their idols as "pure" and not commercial entities they are.

But not in the scenario described, where the artists get no additional money from resales.

Not directly, because that would look bad and would miss the point.

The thing is, they don't need to get additional money from the resale directly. If resale makes their events more profitable, their contracts with the venues and Ticketmaster will be more favorable.

This take is widespread and it's just wrong. Most artists are hired by organizers and just paid a flat fee for performing, the company then selling and promoting the event. Can you imagine what it'd take to organize an international tour otherwise? Some huge names may also run their own operation (Pearl Jam where notorious for this) but still just some of the time, they'll still do some shows in festivals or different countries where they are just hired to perform and not selli ng tickets themselves.

> Most artists are hired by organizers and just paid a flat fee for performing, the company then selling and promoting the event.

This is true, but most artists aren't insanely popular with millions of fans, most artists are little-known gig workers. In this thread we're talking about the big names, which can and do operate by different rules.

The Guardian interviewed several artists in these big tour situations and they say artists get most of each ticket sale, after taxes and royalties (though they obviously also have expenses to pay, so it's not pure profit). If you're claiming otherwise, where does your inside knowledge come from?

https://www.theguardian.com/music/2017/jan/30/where-does-con...

Man, that article dances around the issue, huh. When I say most I mean arena selling artists. Small time artists don't get their tickets scalped. Ever heard those stories of artists putting silly requests just to make sure the organizers complied their terms to the letter of the contract? That's a tell they're not running their own operation. Sure, some do. But if they're touring internationally or doing festivals they are getting hired.

Source: that's literally what the companies behind lolapaloosa, monsters of rock, et all do.

Even the biggest artists still need promoters (Taylor Swift has a promoter... it's Massina Touring Group, Beyonce is with Live Nation). The reason is obvious... star's can't afford the capitol costs of their own shows. Renaissance had a capitol budget of over 100 million. Beyonce's net worth is about 500 million... she's not going to tie up 1/5th of her net worth in a single tour! For someone like Olivia Rodrigo, the economics are even worse. Guts probably will have a capital budget in the 10-20 million range (or higher!) but Olivia's net worth is about 5 million. The promoter's advance is what allows artists to actually have their tours. The promoters are the ones who actually own and sell the tickets. They have a lot of power over decisions like whether or not to use dynamic pricing.

Anybody ever floated the idea that it's all tax evasion?

Company sells ticket officially at 50, black market clears at 150 off the books.

Were I'm from it's the most popular take. Doesn't have to be done by the company itself, could be just some insiders doing it for their sole profit.

Simple fix then, ban reselling.

The artist and TM still get the revenue, but the scalper gets inventory they can't move.

What about the fans?

Similar to airlines, let people buy standby tickets, at the event, check attendance, if there is space let the stand bys in. TM still gets paid twice, scalper has garbage, and fans get in.

What about fans who can't go? Buy the insurance at checkout, if you can't go the insurance comps for the cost of the ticket.

That would just return them to the status quo ante where scalpers sell through third parties.

If you tied tickets to names and required ID at the venue (allowing refunds in case you couldn't make it), this wouldn't work and scalping would basically end overnight. The fact that neither Ticketmaster nor the performers nor the venues has ever taken this simple step is the proof that it's not in their interest to do so.

Note that events where the promoters are actually interested in having people show up instead of in scraping for every dollar (e.g. PAX) do this, and it works fine.

Or proof that getting in would take much longer if they did that. Anyway, there are legitimate reasons someone might want to resell, like no longer being free on the event date, so I’m not sure even legitimate buyers would prefer such a strict system.

> there are legitimate reasons someone might want to resell, like no longer being free on the event date

Which can also happen with airplane tickets. What makes it ok for an airplane ticket to be strictly tied to an ID, but not for a show?

The airline is allowed (in fact, required by law) to use security as a reason to pursue a policy that’s favorable to them. Do you like the experience of going to the airport and wish more things you did were similar?

I've been to a few events that required ID check for entry and it was pretty streamlined.

It seems to work OK as long as there is enough capacity to get everyone in quickly.

Refund with a small charge seems fine to me.

Yup if you applied for a refund, your ticket(s) could go back in the pool for someone wanting to get one/some last minute.

If it/they are picked up, you get your money back minus transaction fees and perhaps a small penalty, and if it doesn't, you don't - but at least you tried and someone else had a chance to get it.

Ticketmaster obviously doesn't GAF / care.

(The above was for a last few hours or days cancellation type scenario; there could be variations to this where if the event is months out, you could get an instant almost full refund etc - benefits could very well be linked to a premium subscription service perhaps. Lots of ways here to play.)

This is how Ticket master works in Norway, where it's illegal to sell above face value.

Or, more specifically you set your own price with the max being what you bought it for.

I want Norway Ticketmaster.

I agree, but Devil's advocate, consider

1) when buying for young kids. Minors don't always have ID and are rarely expected to have them in public.

2) when you buy for a group. You may not have everyone's ID on hand at once, and it makes it harder for honest friends to get tickets together. You don't need to sit together at PAX.

> 2) when you buy for a group. You may not have everyone's ID on hand at once, and it makes it harder for honest friends to get tickets together. You don't need to sit together at PAX.

Have a day or two window to assign the names to the tickets. Sure it is a small window for scalpers too but not really enough to make it work properly (and you could still force at least one of the tickets to be locked to a name at the moment of sale)

The way I've seen it done is:

- kids do not need ID because they usually don't have them

- every adult in the group needs to have their name registered at ticket purchase time

If you immutably tied tickets to names, everyone's name would have to be verified to be Mr. Ticket Master, grand scalper.

Thom Yorke did this when I saw him live in Oakland. All tickets had to be picked up at the Will Call counter, showing an ID. Then you could only go into the venue to the ticket check from Will Call (there were temporary barriers guiding the crowd).

On the other hand, I had an extra ticket. I did manage to sell it for face value by organizing the deal just as I approached the pickup counter (someone else knew how to play the game), and we did a quick cash transaction for face value.

  > If you tied tickets to names and required ID at the venue

Solution sounds worse than the original problem.

What happens if I want to gift somebody a ticket? What happens if I don't want my name associated in a database for going to a gay artist's show? What happens if my wife is sick on show day so I invite my neighbor instead at the last minute?

Airlines allow gifting credits for flights, do the same for tickets.

Gifter only gets refunds in credits not tickets.

Then on acceptance, the receiver has the credit and only gets refund to them.

Doesn't PAX just the badges out? They are readily and frequently resold, online and at the venue.

More effective would be having to show your ID at the venue with no reentry.

"Scalpy McScalper. Looks good to me. Enjoy the show!"

Also actual fans sometimes can’t make a show and need to resell their tickets

What is stopping the existence of a refund mechanism there?

Everyone in the entire chain. From artist to venue to promoter/booker to ticket platform. None of them want to refund. Not just for the obvious, but they make a killing selling ticket insurance.

Then scalpers have zero risk if they overbuy, encouraging scalpers even more.

If you restrict refunds to be permissible only until a certain point before the event, that will create a window in which unsuccessfully scalped tickets are released back into the pool for general public, bypassing scalpers. If scalpers choose to hold onto the tickets beyond the point, they wouldn't really be able to liquidate. I'd say that we shouldn't let perfect be the enemy of good, with regards to refunds.

you have to make tradeoffs. If you want to ban reselling, you ban reselling.

Scalpers locking out fans is a universal concern. How often do you hear the success story of "I can't make the concert so I sold the ticket online". Come on. An industry has propped up. This is small potatoes.

But people buy stuff everyday that they never actually use. Why should tickets be sacred?

Yes, and many people make effort in selling or giving away stuff they know they won't use, whether to get some money back or to reduce the waste in our economy, or both.

Because artists don't want to play to an empty room. Even for a lot of money.

Standby tickets at the venue fixes this. Similar to airplane tickets, which can be oversold, standby tickets accommodate those who really need to use a ticketed service.

And how will standby tickets be rationed? By auction? By first-come-first-serve? You still have the same fundamental problem of scarcity.

I doubt there would be that many no-shows, demand for tickets far outweighs supply (usually). People who were making causal purchasing choices hitherto may be more cautious as a result, that's all.

Insurance or refund only to buyer fixes this.

This is only a problem because concert venues want to charge below market price and have the scalpers take the heat while they get their cut both ways. You can’t magically get around the market price. If you price too low you’ll have scalpers. If you beat the scalpers you’ll just have not enough tickets and a few people get tickets at below market value. Maybe that’s more fair but if you’re a fan that doesn’t feel comfortable buying tickets to a concert a year in advance, it’s likely you’re not going to be able to go at any price.

People just don’t want to deal with the reality that the Taylor swift tickets that start at $40 or whatever were never real to begin with

> People just don’t want to deal with the reality that the Taylor swift tickets that start at $40 or whatever were never real to begin with

This.

Here's a much more optimal semi-auction style solution. Tickets go on sale for 20 days, each day, all the seats and spots are worth the same price, you can buy anything, the price is always the same.

Day 1, the price is $2000. Day 20, the price is $10. So you'd only pay $60 at most for a ticket? Sure, just check in on day 16.

Since we start the price at the higher-than-scalp price, there's no scalping opportunity if you are paying the 'real market price'.

For someone like Taylor Swift, the tickets would sell out at $2000 on day 1. Then what? Her fans burn down her private jet on the tarmac for being greedy.

The entire reason performers want their tickets sold below market value is so that non-rich "real fans" can actually afford them. All of the other shenanigans going on are there to get around this issue (and the performers definitely get a cut) while protecting the performer's shield of plausible deniability.

If image is such a concern, sell (1/x) of tickets at the max possible price, give away the other (1 - 1/x) the day before the show for free. Ban transfers on the free tickets.

Not just image. If normal fans figure they can't go no way, they will loose interest overall.

Who gets those (1 - 1/x) tickets? Will there be a massive queue? In that case, people are paying with time instead of with money. Time is not free, and opportunity costs are real.

This "love" is a lie. A "real fan" is one who wants to be skillfully lied to.

Or you could say a “real fan” is someone who never goes to concerts and only pirates music. Then they have no incentives either way and only listen to music they enjoy!

I agree with you and that's called a Dutch auction or descending price auction. https://en.wikipedia.org/wiki/Dutch_auction

But inevitably, someone (such as the vocal people in this thread) is going to complain that it means only the richest fans can afford to attend the concert. No duh, being rich means you are able to afford things that some others can't.

One of the reasons that artists want their tickets to be accessible for less-wealthy fans is that those fans are often more invested. Expensive tickets lead to a lot of rich people who are there to be seen and to experience an exclusive event rather than people who are specifically interested in that artist.

You find similar effects at sporting events (which is part of why nearly every soccer club has a "supporters' section" with ticket prices deliberately kept very low).

That's true. But there will still be some kind of rationing going on. If there are a thousand seats but a million fans, then 99.9% of them will be disappointed. Sure, you can lower the price, but then the winners will be either first-come-first-serve, or lottery, or nepotism.

Instead of banning resale, why not just allow resale at face value? The French open(tennis) does this and makes it possible to still get tickets at a reasonable price up until the day of the event.

Because you don't handle the money. If A shows up to the concert with tickets originally purchased by B, you have no idea how much A paid.

Banning resale is not about selling per se but banning the changing of ownership. The person who paid is verified to be the one attending.

In Norway it's by law not legal to resell tickets at a higher price. That means that all listings on reputable buy/sell sites will immediately be taken down if you try.

It of course still happens, but in a smaller scale. You can't base a business around it, exactly.

What? In my example, Person B buys the change of ownership from person A at face value...its pretty clear how much they each paid.

Absolutely no resale is just shifting the risk to the consumer, and affecting the 99% of people who want to see a good show. If the agency takes away the profit of resale, while still collecting a small fee on change of ownership, and allows customers to have flexibility in changing circumstances...its a win win win.

> its pretty clear how much they each paid

By what surveillance method is this?

Or you mean there is a locked down trading platform, and only there can tickets be traded? What prevents additional money from changing hands via an off-platform backchannel?

A law could discourage that, like the one in Norway your sibling comment pointed out.

In Hungary the best resale platform is TicketSwap and they only allow selling up to 10% or so more than face value, I think that's a good system.

> Simple fix then, ban reselling.

In Norway they introduced a law[1] that forbids reselling for a higher price than that printed on the ticket.

I do recall there was a lot of talk about scalping in the years before this law, and I haven't heard much since. I also noticed a drastic decrease of scalpers trying to sell tickets outside the venue.

[1]: https://lovdata.no/dokument/NL/lov/2007-06-29-86

>In Norway they introduced a law[1] that forbids reselling for a higher price than that printed on the ticket.

For sale, desirable ticket at face value and $500 peanut. Only willing to sell as a bundle.

> If a reseller buys the ticket, and then sells it again to the end user, Ticketmaster gets paid twice.

Yeah, but Ticketmaster doesn't own the tickets.

Nor do they decide the fees. Or even keep most of the revenue from the fees. All of that is decided by the promoter, possibly with the artist (if a big enough name) and to some extent the venue.

Ticketmaster (Live Nation) own the venue.

That's a similar argument to maximizing GDP. If all we care about is that number rather than the quality of transactions happening, then we can't really make useful or accurate conclusions or predictions about the health of an economy.

> If a reseller buys the ticket, and then sells it again to the end user, Ticketmaster gets paid twice.

Definitively not if it happens like this article describes, with what the scalper selling being a ticketmaster account.

Yep. Ticketmaster makes profit from selling out to scalpers and then double dips on their StubHub and whatever other sites they own too. They also own the venues and dip out of that pool as well.

> Now, if one of the platforms “cracks down” and makes it harder to buy and sell people will prefer another platform.

Huh, they only have to ensure that the price of the resold ticket is reasonable ...

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