Ticketmaster Sued in Canada for Scalping Tickets to Shows
bloomberg.com
bloomberg.com
The closest I've come to a reasonable explanation was in the Armchair Economist, but I remain unconvinced that they wouldn't be better off selling tickets at a higher price or engaging in some sort of price-targeting.
Concert tickets are a different beast since bands don't acquire win & loss records, but the public perception of face value still applies. During the season, prices can vary dramatically based on how good a team is playing. For example, Lions and Rams tickets we're going for $5 by season end. However, this almost never happens with bands on tour unless they require a reputation for sucking live. Also, what Ticketmaster doesn't make very public is that they often split their "convenience fees" with the artist.
I'm still not sold on the public-backlash argument for performers though. Couldn't price targeting reduce the public backlash? Eg. charge $50 for a limited number of tickets 3 months in advance, when the die hard, starving-college-student fans are ready to buy tickets, and $200 to the investment banker who buys tickets for his kid at the last minute.
Maybe I'm over-simplifying things, or over-estimating the money the scalpers are making.
http://ticketstumbler.com/blog/presale-passwords-faqs/
Presale passwords allow fans to gain access to tickets before the public sale. However, scalpers can pretty easily acquire them and the sales limits aren't very hard to game. What does tend to happen though is that the investment banker type (is that reference even valid anymore? :-D) can buy his tickets on the secondary market at the last minute from TicketsNow, which Ticketmaster owns, and sometimes the artist receives a cut of those proceeds. To people on Hacker News, market prices makes a lot of sense, but in practice they scare a lot of people away. Fixed prices are why Ebay acquired Half.com & Stubhub. And it's why places that deal with futures or more complex purchasing options like First Dibz have blown through loads of cash without gaining much traction; the people behind those sites aren't the target market.
What's also interesting is that artists tend to make more money from tours than CDs, merchandise, itunes, etc (as the label gets a significantly larger cut of the latter). So maybe there's some behind the scenes pressure to ensure sellouts and drive the type of sales that benefit the label most.
One final thought: if an artist becomes really hot (like the Flight of the Conchords currently) shows can be added...double or tripling supply in a given metropolitan area. The same thing cannot be done with sports.
But the main reason is risk management -- why take a risk with high priced tickets when you can be sure that the scalpers can guarantee you a sellout at the profit margin you're comfortable with? As fallentimes says, audience perception goes into it also -- Bruce Springsteen sells his tickets for about $100 which is well under market for an artist that appeals to an older crowd. He probably thinks he is doing his fans a favor.
If it is a large label that puts it on, they already have a "diverse portfolio" in some sense, so if one show bombs they can rely on others to balance it out. Even if they do need to manage risk, surely there is a more efficient way to do it?
Maybe you're right and it is the result of benevolence on the part of the artist.
Ticketmaster has such a terrible user experience, we don't even include them in our site listings (blog only) although we do include Ticketsnow. What is sort of funny: out of all the TicketStumbler ticket providers, they've been the most helpful.
Can't wait for that creative destruction to come about.
Actually spending on entertainment and culture has tended to do well in previous downturns - even severe downturns. Its another escape that gets a boost like alcohol, tobacco, gambling etc.
[piece begins at 15:25] http://podcast.cbc.ca/mp3/twtw_20090208_11769.mp3
http://www.usatoday.com/sports/basketball/nba/2008-10-13-nba...
http://nbcsports.msnbc.com/id/28141796/
http://bats.blogs.nytimes.com/2008/12/08/layoffs-at-mlbcom/
http://www.newsobserver.com/business/story/1297679.html
http://www.ticketnews.com/Broadway-ticket-sales-remain-slow-...
The real test for concerts will come in the summer.
I was one of the lucky few to get tickets directly from Radiohead at a pre-sale a few weeks before.
It is absolutely wrong for Ticketmaster, who has control over probably 95% of the tickets for every show, to turn around and sell them for double the price. It's a conflict of interest, and makes some shows prohibitively expensive. Ticketmaster is scum.