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Comment by jallen_dot_dev | Hacker News Reader

> 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.

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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.

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.

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.

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