A scalper who used bots to buy millions of tickets, now wants to stop them | Hacker News Reader

A scalper who used bots to buy millions of tickets, now wants to stop them

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134 pointspmcpinto319 comments

I spent some of my formidable years scalping and brokering event (mostly broadway) tickets in various forms. The company I co-founded made a few million and I learned an expensive lesson in equity at age 18 (I opted instead for the $14/hr salary).

We worked in broadway (meaning the style of show, not just the street), and I met the Wiseguys folks at secondary market trade shows, but I had no idea they were this big, and to be honest didn't care.

We always got tickets long before they ever went on sale, as does almost anyone who has been in the game a while. We would buy tickets up to 18 months in advance, and we're a security blanket of guaranteed sales for the artists and venues. We thought the retail sales were always a losing bet (except for, ironically, the artists and venues that tried to fight scalpers).

When we started figuring out how to circumvent the safeguards (deciding deliberately not to use bots or "spinners" as they used to be called), we realized we didn't need to because most of the venues loved us. Just like the wiseguys, they didn't want to be in the business of scalping and arbitrage, they just wanted to move all of their tickets quickly and efficiently with as little loss as possible. So if we wanted to buy 5,000 of 10,000 seats for a show they were thrilled, and we'd get a discount. When a show was about to go on sale they'd call us. Then thy may turn around and say "sorry tickets are on the secondary market, we don't like scalpers" but usually that was PR-style BS. They wanted someone to absorb that risk.

There are certainly artists and venues (e.g. Metallica) that hate scalpers and try to fight them. But we noticed that really only eliminates the "beer money" scalpers and leaves all of the money to the more sophisticated one. I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing, and I find that most venues and artists want to maximize profits and, more importantly, minimize risk anyway.

> I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing, and I find that most venues and artists want to maximize profits anyway.

How would a scalper get around ticketing that requires presenting ID that matches the name of the person on the ticket?

I've been to a few shows that were like that for pickup up tickets at the will call booth. I suppose you could get them there and hand them off to the true purchaser but that would require boots on the ground at each show.

Also, not sure how do deal with ID presented at the door to get into the venue if it has to match the ticket purchaser.

(All of this assumes no resales to rename the ticket owner)

> How would a scalper get around ticketing that requires presenting ID that matches the name of the person on the ticket?

The article mentions a workaround for this:

> So-called "paperless" tickets are an antiscalping measure that requires the purchasing credit card to be presented at the venue on the night of the concert. This requirement makes scalpers' lives much harder but is regularly circumvented by the most serious operations. Wiseguy, for instance, told its wholesalers to ask their customers for their credit cards before a sale happened. Wiseguy then used its bot to buy paperless tickets directly on fans' credit cards.

That's one way. There are a few more. I know people who would have three credit cards, buy 24 tickets, and fly around the country picking them up. One guy I talked to had seen Metallica every time they played in the past 10 years and made a good chunk of cash doing so.

The scalper could "sell" their front-row ticket to someone else who buys a cheap nosebleed. Then they get in with the cheap seat and go sit at the better spot. Clumsy but it would work.

> who buys a cheap nosebleed

What does this mean? That the person gets punched in the face? Do you just mean mugging people?

Nosebleed seat means a seat at the very back of the house. Because it is usually very high up, the idea is that the atmosphere is thin and it makes your nose bleed. Basically what the person is saying is that the fan can buy a very cheap ticket and exchange it for a much more expensive ticket that the scalper bought.

I think he's referring to a seat that is not a good seat. Normally called nosebleed seats because the altitude is so high it could make your nosebleed. I think.

This is one of many downsides of PDF ticketing. Fraudster buys a nosebleed, edits the PDF to fake a great seat. Ticket scans just fine at the door, since it has a legit barcode. (If the scanner displays the real section/row/seat for that barcode, the person working the door could cross-check it, but I've never seen that happen.)

> I spent some of my formidable years scalping

I think you mean formative years.

Did you ever get hit buying lots of tickets for a show and then unable to sell them?

Damnit, and now it won't let me edit.

Nah, when we bought big sets we knew they would sell. We had a model that could predict it somewhat accurately. Worst case scenario we'd sell for face.

In the early days when we had no data things were much more difficult, at a few $200 tickets, but wasn't a huge deal.

> Did you ever get hit buying lots of tickets for a show and then unable to sell them?

This happens, but it's not too common. More common by far is selling at under cost. it's a market like any other, and brokers absorb some of the risk for the hope that it pays out.

Put it this way, you may not want to spend $60+ per ticket to see an artist you are interested in, but at $50 a ticket? or $30? At some point, you can usually move them, and depending on how many you have, the trick is moving them while not crashing the market at the same time (not to imply huge amounts of tickets, for events not selling well there may not be much on the market to begin with).

>I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing, and I find that most venues and artists want to maximize profits and, more importantly, minimize risk anyway.

What about charging more, so there is less (or zero) spread between what scalpers can charge vs. the official price (or whatever they call it)?

Well, there's that ;)

But there are reasons they keep prices low as well. There's a "full house effect" that comes when every seat is full (can you imagine being at a play where half of the seats are empty), as well as just offloading the risk and getting cash in advance. It was hard to find someone with 500k to put into tickets speculatively.

Right, I just have a hard time believing that filling up the house is just so risky and difficult that they'll take an ~80% loss on revenue (5x scalper markup) just to be sure of it.

That model would require a level of risk aversion from the sellers that implies they should just be buying government bonds with their capital rather than running concerts.

Well most of the time there isn't a 5x markup, either.

How do scalpers beat will call with photo ID?

That spikes the prices of big shows insanely high. Buy 8, sell 7, meet at venue. I've seen Metallica tickets that were $100 face go for $5,000 each because of this.

> The company I co-founded made a few million and I learned an expensive lesson in equity at age 18 (I opted instead for the $14/hr salary).

Don't feel bad; even if you got equity, your savvier business partner like would have found a way to devalue it. I once got "equity" in the form of 0.0001% of a 6-person non-VC-funded startup.

Nah, I had an option to take 30% in lieu of salary. Was doing $3m/yr in profit. Equity isn't inherently evil.

Surely you were offered the 30% before the company was making £3m/yr in profit?

I think that's the parent's point.

Yes, isn't that the point of equity? I can do math

Say that a tickets market value is $500. What if they charged $500, then gave a $400 rebate after you walk in the door? They would of course limit the number of rebates per person.

A more concrete implementation that might work well if people are uncomfortable dealing with money in this way: give away goodies valued at the difference at the door. eg everyone get the album, a T-shirt, 2 free drink tickets, etc...

As the article mentioned, they forward customer credit cards to purchase the tickets, even two levels deep. So the bot can use credit card numbers from the actual fans.

You would definitely have to stop bots.

> I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing,

I have seen such a system. A festival near me has a limited number of tickets available each year (due to site and staff restrictions) with surprisingly high demand. Their solution is to do a lottery that gives people an opportunity to buy tickets, requiring the name of each individual ticket recipient at purchase, then they match the names on each ticket to IDs at the gates. The only way to defeat this system is with fake ids.

I can think of a half dozen ways to beat that, at varying levels of legality

Go on... You're describing something that's incredibly puzzling and leaving everyone's curiosity burning!

Sell by auction. Let buyers bid up to the natural market value. Avoid sniping by running it like a real auction: having no fixed ending time and only finalizing a sale when there have been no bids for a period of time to be sure everyone has a chance to bid up to whatever it's worth to them.

But I want tickets below market value. It's only fair I should have them.

Ok that actually works, but market value will change drastically over time, and fans would be in an uproar

> fans would be in an uproar

fans who don't pay top-dollar. Why not focus on fans who do?

you're preaching to the choir

Depending on the event, this could make things worse for the arts. Society is seeing a decline in arts attendance in terms of the "older styles" such as theatre and lesser listened to genres (jazz, classical). I'm no expert, but high prices only deem to pull the "common folk" away from events, away from culture.

Imagine if people were attending more events, experiencing more diversity, more art. Culture would probably be a bit less two-sided (in my opinion).

> Imagine if people were attending more events, experiencing more diversity

If more is being paid for tickets, this will encourage more events. Are you suggesting a small, wealthy population repeatedly go to the same events? How could would reducing prices cause "experiencing more diversity", when every ticket redirected to one person, deprives another.

Sure, but the group that runs the festival doesn't want to raise ticket prices.

The London New Year Eve fireworks required a ticket for the best areas, with your name on it and with photo ID check.

I think the reason for the photo ID check is for a security background check against that name, so I would assume they would be very serious when checking the ID.

Anyway around that?

"I have never yet seen a system that cannot be beat by scalpers"

easy, ID linked tickets that you pick up after entering the venue and get transacted at that point, and you cannot reenter.

You'd then need to have some nontrivial anti-counterfeit technology on the ticket. Otherwise, the name is just a label, and the barcode is a UUID that actually means it's a valid ticket. Someone could make a high quality copy of the ticket, keep the UUID and put new persons name over it.

What I would try is a "credit card required at entry", so at the gate the only person who gets is the one who inserts the (valid) CC# that was used to buy the ticket.

Gift debit cards (some are technically indistinguishable from normal) mapped to fake addresses, escort people in and leave.

> Metallica

That didn't work. Tickets for the Chicago show this morning under fanclub presale sold out within seconds. I tried to get them. (Even with a unique code) There are bundles of tickets being resold for nearly 4x their original cost. (Fan presale codes limit to 2 per person)

Original prices: 85/155:

https://www.stubhub.com/metallica-tickets-metallica-with-ave...

Do you have a scalper's view on Burning Man tickets?

AFAIK, it's not that no-one scalps them, but that it's a definite minority, due to community standards, slick moves by the Borg, and invalidating tickets that they find out get scalped.

Have never paid attention

"Wiseguy learned that Ticketmaster's CAPTCHA system had only loaded 30,000 unique images into its database, rather than millions. So Lowson's team downloaded every image they could find as a .jpeg file, stayed up all night typing them out, and taught their bot how to match the images."

Wow. I had the impression Ticketmaster had invested a lot of thought into anti bot tech. Apparently not.

What is more interesting about that statement is how did he learn that fact? Possibly some help from the inside? Or some other method...?

Probably just started saving them. The value on doing so was high enough that even if it was 10's of millions it would be worth doing. It's not particularly expensive (other than time) to do so.

Just scrape.. store the captchas, use Amazon Turk, have them store the image + word in a database to recognize automatically later, and then realize the database never seems to increase in size.

He might've tried to write a computer vision solution to solve TicketMaster captchas.

In order to test your solution, you need a bank of images to test from. So you download the first, say, 50k. And realize that you're getting a whole lot of repeats.

30k is still really annoying to get around without computer vision. But OpenCV is really, really fun and easy to use.

It's a CV arms race - the CAPTCHAs are meant to stay ahead of state-of-the-art CV tech. That's the entire premise behind reCAPTCHA - if you've solved it, then we've sold useful real-world problems and can move onto the next ones.

That's the entire premise behind reCAPTCHA - if you've solved it, then we've sold useful real-world problems and can move onto the next ones.

The original premise of reCAPTCHA was to help crowdsource the digitization of books by providing spam bot prevention. It's slogan was "Stop Spam, Read Books." up until 2014.

Exactly. I had a typo where I meant "solved" but put "sold".

reCAPTCHA directed the efforts in the spambots arms race towards a real-world problem - reading old books.

The birthday paradox.

After a few hundred to low thousands of manual captcha's, someone goes Hey... I've seen this one before!.

After 2-3 duplicates, they're pretty sure that the corpus is small. At that point, it's worth writing a script to grab as many captchas as possible. They can then manually analyze them.

A back of the envelope calculation shows that with 30 people, they should be able to solve all of the captchas in a working day, even accounting for breaks.

The files could have been numbered consecutively.

If they had just scraped ~205 images, they would have a > 50% chance of getting a repeat.

Indeed, by the "birthday paradox." And, by the "coupon collector's problem," the expected time to have seen all 30,000 images is about n*log(n) ~= 310,000 random images.

https://en.wikipedia.org/wiki/Coupon_collector's_problem

One method is to use capture-recapture sampling. He takes a sample of the images of size N and remembers them. Then he takes another sample of the images with size M and notes that K of them are repeated. Then an estimator for the total number of images is given by NM/K.

Or more concretely, if you take a random sample of 100 images and remember them, then take another sample of 100 images and you recognize half 50 of them. Then you're reasonably confident that 100 is half of the images.

(This does assume that the images presented follow a discrete uniform distribution but it's probably a good assumption given how people write software.)

Ticketmaster celebrates scalpers.

Yup. They just want to be the scalpers

They already are to some extent:

http://www.thembj.org/2013/10/ticketmaster-and-the-business-...

> "There's an emotional aspect to what artists do, which is to say 'I'm not willing to charge $500 even though clearly the market value is $500. I'm going to charge $100, and at the end of the day someone else is going to make that money,'"

The bots are just a symptom. Seems like this is likely the root of the problem. If the primary market was efficient, then there would be no secondary market, and the whole point of developing these bots and sophisticates scalping systems would be moot.

Even with an accurate primary market, the secondary market would exist. For example, and artist may sell out their event, but then become more popular, causing tickets to be worth more. Some percentage of people will decide that they would rather have the profit than the ticket. Ticket holders may also find they are unable (or no longer want to) attend, so may want to sell their tickets.

Sure, just as any other good with a functioning supply and demand.

>Seems like this is likely the root of the problem.

The artist/venue wins because the show gets sold out and they get to claim 'good guy' by offering lower priced tickets. The people who want to get rid of scalping are going to be really upset when they find out it means that Ticketmaster just implements a ticket auction.

But an efficient primary market disconnects you from your fans by advantaging richer customers.

Probably not the best way to get the crowd that actually care about your music.

If the value of the ticket is more than the price, you're just going to have what you have today: scalper-bots gobbling them up and re-selling them to those richer customers anyway. The people who can't afford the tickets still can't afford them. Whenever you price something under its value, you are just opening up an arbitrage opportunity for someone else.

They still can afford it, they just have less chance to get the tickets. I think it's somehow more fair than rising the price for everyone.

Ok, the problem seems like a clear-cut supply-and-demand one. So if artists don't want to look like a bunch of greedy jerks selling tickets for $500+ apiece, and there's only so many seats in the venue, why not increase the number of shows? Maybe the venue is too booked-up and the artists get too tired playing the same venue 5 days in a row and being on the road 5x as long, but it's a thought.

The other question I have is: decades ago, concert tickets didn't cost this much, even after adjusting for inflation, and that's when rock bands were in their prime. What happened? I'm pretty sure it didn't cost the equivalent of $500 to see Led Zeppelin in concert in the early/mid 70s, so why does it cost so much to see U2 (an old band now) in 2017?

>> decades ago, concert tickets didn't cost this much

I'm willing to bet it's because in the old days artists could release a record and make a living from that without even touring. Now the record, for most artists, is a promotional tool, maybe even a loss leader, for concerts. As for 'why don't they just play more shows' I'd say the reason is quite similar. In the past artists didn't have to tour enough. Now they tour for incredibly long periods of time so they can extend that further (unhealthy and maybe even impossible) or play more shows in fewer places.

When was the era of high royalties where bands got rich and didn't have to perform?

Take a look at Kate Bush for example. Didn't tour for 35 years. Most artists will perform but there was definitely an era where it wasn't necessary to putting food on the table.

Rock bands may have been in their prime back then but their fan base has probably yet to reach peak wealth.

> "I'm going to charge $100, and at the end of the day someone else is going to make that money"

That's what StubHub imagines the artists were thinking.

What I think many artists are actually thinking is "I'm altruistically going to charge $100 (or $10) so that someone who can't pay $500 can get to see the show". They believe in the lottery system and wish it worked.

More effective altruism could be achieved if the artists actually charged market value to buy a guaranteed ticket, and used some of the proceeds to 'buy' their own tickets to give away in a lottery.

This is a very narrow concept of efficiency. The person who drops $500 on a ticket doesn't necessarily like the band more than the person who can only afford $50. People are always citing models of price efficiency forgetting that perfect competition only obtains under very limited conditions, and that participants are theoretically free to enter or exit the market at any time.

Bands don't generally want to maximize revenue from any given gig, they want to maximize fan loyalty because it's the dedicated fans who spend the most money over the long term. Overly simplistic pricing models don't account for this. In economics your aim is to maximize utility. Money is only a proxy for this, and often an inaccurate one.

> Bands don't generally want to maximize revenue from any given gig

They do more nowadays. The old model of touring to drive demand for record sales has been turned upside-down. It is now sell music to drive demand for concert ticket sales.

Most (not all) artists now make much more of their overall revenue from touring and want to maximize the revenue there - without seeming too much like they are.

As well artists can sometimes have a narrow window of time to cash in.

I never even mentioned record sales. I'm just saying that bands want fans who keep coming back over and over. They Might Be Giants are a good example of a band with a very 'sticky' fanbase.

I did not say you did. I mentioned record sales because the balance of from where artists revenue is coming is pushing artists to get more of their money from their gigs as other revenue sources have declined.

The motivation to keep fans coming back and not seem "too greedy" keep things in check but the balance of motivations has definitely shifted towards: we want more money from live events.

Decades ago concert ticket sales might have been considered almost a loss leader.

OK but I am talking exclusively about getting people to keep coming back to future concerts, although clearly I have done a poor job of communicating this to you.

Bands want people to come back to future concerts. Yes I understand.

My point is that is just one of many factors influencing how bands price their events. And that range of factors has changed over time.

So you're nitpicking without addressing the point about _uility_

Exactly. Scalping exists because the ticket prices are lower than the marginal utility to the fan. Raise ticket prices, and there will be less scalping.

> The scourge of ticket bots and the immorality of the shady ticket scalpers using them is conventional wisdom

I very much disagree.

If I am willing to pay the asking price for tickets, I should be able to buy them. If you're offering them so cheaply that I will happily buy all of the tickets then you're offering them too cheap and you can't really complain if I buy them.

If it weren't for ticket-scalpers, die-hard fans who are willing to pay extra to secure a place would have no option. Thanks to ticket-scalpers, it is possible for die-hard fans to ensure they can get one even if the tickets are "sold out" by just offering more money.

This is a classic case of an inefficient market being made more efficient.

Without ticket scalping: the original seller sells all the tickets. Some fans get to watch the gig, and others don't, and the availability of tickets bears no relation to how much you're willing to pay to get hold of one, only to how quickly you decide to book one.

With ticket scalping: the original seller sells all their tickets more quickly. The fans who want to see the gig the most get to see it, with less chance of tickets being made unavailable by people who don't want to see it as badly (i.e. don't want to pay as much money), and the ticket scalper makes a profit. Everyone's a winner.

There is a middle ground of letting legitimate buyers purchase tickets and then selling them on the secondary market if they are unable to attend.

Automated bots/teams of people buying many tickets purely for the sake of profit doesn't benefit anyone other than the scalpers.

>Automated bots/teams of people buying many tickets purely for the sake of profit doesn't benefit anyone other than the scalpers.

He just told you - it benefits people who want to pay more but would otherwise have to rely on luck to buy the tickets - this is the entire reason the system works.

The people running the show could just sell the tickets using an auction mechanism. It doesn't make sense to let a middle man take a huge cut.

Well it probably does make sense for PR reasons. Nobody wants to be the band/team/event gouging their fans.

>Well it probably does make sense for PR reasons. Nobody wants to be the band/team/event gouging their fans.

Yes and this is why they exist :)

> There is a middle ground of letting legitimate buyers purchase tickets and then selling them on the secondary market if they are unable to attend.

And nothing stops those people from buying a ticket from someone who is no longer able to attend on StubHub. Bands aren't putting on a show so that their wealthiest fans can attend.

>And nothing stops those people from buying a ticket from someone who is no longer able to attend on StubHub.

And the difference between that and scalping to the buyer is ? If you can't bid on the price you're still relying on luck to get it which sucks if you want to pay more. So your argument was that only scalpers benefit - people who can now secure tickets at a markup also benefited.

The difference is that hundreds if not thousands of fans for a large event are not automatically pushed to the more expensive secondary market for no reason other than profit making by a few people.

It makes it nearly impossible for anything that isn't a machine to acquire retail tickets. When 496/500 GA tickets go to a bot, the scarcity and price are artificially inflated.

It's not "artificial" any more than the retail price was artifically low. It's a ticket, any price is artificial.

> it benefits people who want to pay more but would otherwise have to rely on luck to buy the tickets

Where I come from we call these "better seats" or "VIP passes" and they are sold directly through a venue. Not through middlemen that only add value through the scarcity they create.

> Everyone's a winner.

Except perhaps those die-hard fans who do not have the extra money available to see what may be a once-in-a-lifetime show.

Perhaps a more correct ending would be "Everyone who has enough disposable income is a winner."

If they're too cheap, then it would be everyone with enough disposable time to sit in queue and grab them before they sell out.

This is another reason scalpers are bad. Botting the process gives an edge in both speed and tenacity over legitimate fans sitting in the queue. Ticket allotment limits are only affecting legitimate users, as those scalpers who use bots can get around this with multiple sessions.

Time is distributed a lot more equitably than money, so people tend to find this sort of thing to be more fair.

> Time is distributed a lot more equitably than money

How so?

If you compare the ratio between the 90th percentile and 10th percentile of "wealth," when it comes to time then that ratio is around 1.5-1.7 for Americans (the 10th percentile male lives about 55 years, female 62 years; the 90th percentile is 93/96). If you look at income, the ratio between 90th and 10th percentile is over 10. If you look at net worth, the ratio is actually negative, because the 10th percentile has less than zero net worth.

If you expand it out to the 100th percentile then the difference is even more stark. The 100th percentile income is many orders of magnitude higher than the 10th percentile, while the 100th percentile time is less than 3x higher than the 10th percentile.

> when it comes to time then that ratio is around 1.5-1.7

If I employ someone, their time was mine; If it wasn't, they could use it to stand in line for tickets. This is a different thing from 'mortality', although I assume the wealthy have both better medical care, and quality of life beyond average male/female lifespans.

Even if you restrict it to free time, the disparity isn't that great. If time were distributed like money, then the average person would have only a few seconds of free time per day.

Only because personal free time is capped. But if you include work-hours, there is a discrepancy.

What do you mean by "the average person"? The median wrt wage? Because the average wage will be the same regardless of distribution.

What do you mean, if you include work hours? I can't think of any way to analyze a person's time which results in the many-orders-of-magnitude inequalities we see with money.

For "the average person," pick any reasonable meaning you like. I think they'll all work about the same in this context. The person who makes the most money makes orders of magnitude more than the average. The person who has the most free time has, at most, 168 hours of free time per week. If the inequality there were similar, than the average person's free time would be measured in seconds.

> What do you mean, if you include work hours

If I employ someone to do something, they are acting on my behalf, as proxy. These lose the free time I pay them for, and I gain it. Hence an individual that employs people maybe have more than 24 hours a day; e.g. If I pay someone to wait in line for an hour (for a ticket), so I don't have to, then I just bought an hour of free time.

> I think they'll all work about the same in this context

It sounds like you're just guessing then. I tried working it out, but it depends on what you are trying to measure.

Are you arguing that a person might have 1,000 hours of time each week if he hires a bunch of people to do work for him? That is not how it works.

I mean, you can define it that way, but then you and I are just talking about completely different things that happen to use the same spelling, and this discussion is pointless.

> That is not how it works

It depends on what you're trying to achieve. That time is a poor metaphor for distributable currency?

It still leaves healthcare and QoL as issues.

Who said anything about time as a metaphor for currency?

Health care and quality of life disparities still won't get you anywhere near the level of inequality seen with money.

> Who said anything about time as a metaphor for currency?

I did. You talk about distribution of time, then definite as an un-distributable thing.

What has mortality got to do with wealth inequality, if it isn't a metaphor?

Two different meanings of "distribution." Think "probability distribution," not "transfer."

A metaphor is when you literally talk about one thing, but are actually referring to something else. I'm not doing that here. When I talk about time, I'm actually talking about time. I'm comparing it to money, not using it as a metaphor for money.

As for what they have to do with each other, it's simple:

The usual way to allocate scarce goods is to use supply and demand to set an equilibrium price, and then let people spend money in order to obtain it. Another way to allocate scarce goods is to require people to spend time in order to obtain it.

People tend to consider the first way to be unfair, especially for goods with high emotional value, and whose cost to produce is not connected to the price. People tend to consider the second way to be more fair, because time is more equally distributed among humans.

The first paragraph is fact. The second paragraph is observation and speculation. No metaphors in sight.

A metaphor according to dictionary : "A figure of speech in which a word or phrase is applied to an object or action to which it is not literally applicable.". If you don't consider time to be transferable, talking of it in terms of a currency is exactly this.

> People tend to consider the first way to be unfair

Time and money are linked, so I see both ways as the same. I disagree with the above, some people thing this, but I have no idea what %.

I'm not talking about time in terms of a currency....

All I'm saying is: requiring people to give up time to obtain a scarce good tends to be seen as more fair, because time is more equitably available to people than money.

I can't understand why you keep thinking I'm somehow using time as a metaphor for money.

> I can't understand why you keep thinking I'm somehow using time as a metaphor for money.

I said currency. If you exchange one thing for another (or talk abstractly in terms of this), it's a currency.

> requiring people to give up time to obtain a scarce good tends to be seen as more fair

People too poor to take time off work, or with high-paid careers that leaves them little free time won't have time to spare.

People who are wealthy with no associated constraint on their free time (e.g inherited wealth, or retirees), the unemployed and children/students have plenty free time.

Why does the latter group deserve tickets more than the former?

> time is more equitably available to people than money

Time is more 'equally' (but not necessarily more 'fairly') distributed than time, but what does that matter? Daily toe-nail growth is more evenly distributed than money, and maybe more evenly distributed than time too, so should we ditch time in favor of exchanging good for toenails?

There's no exchange when you ask people to give up time in order to obtain something. That time is just lost. If it was a currency, then the people selling the goods would receive the time you spent.

Your toenail hypothetical, and much of the rest of your comment, entirely misses my point. I'm not saying we should do this or that. I'm merely saying that people find it to be more fair when there's a time requirement. That's not the same thing as "we should require people to spend time."

Yes there is, although it's not the same as a physical exchange.

If I initiate an electronic transaction, where my bank balance goes down by $10, and yours up by $10, that's an exchange, even though nothing physically passed between us.

If I solicit you to do something for me (in exchange for money) that means you spend an hour doing something (therefore not having that time free, but freeing me from having to do it (therefore freeing up an hour of my time), a similar exchange has taken place.

Time can perish, but it can still be used as a currency.

> I'm merely saying that people find it to be more fair

fair enough. Then I disagree that this is true, without proof, and also disagree this is relevant, without justification. I'd assume most people that thing this are part of a group with more time than money.

Sure, but some fan wasn't going to make it either way.

Why should the fan who is willing to pay more money have to miss out, in favour of a fan who is paying less money?

Why not? The only reason to believe this is to believe that having more money means you're inherently more deserving of things, no matter the wishes of the people providing those things.

It's not about deserving in any sort of moral sense. If I offer you $1000 for something you're selling, and someone else offers $2000, who are you going to sell it to?

He obviously is willing to give you more, so give it to him. That's fair. That's life.

EDIT: And if you sell it to me for $1000, don't be surprised if I turn around and sell it to the $2000 guy. He wants it more than I do, and he's going to get it one way or another.

Would your explanation still be as just-so if I chose to sell the item for <=$1000 to you because you are a friend or family?

There are numerous reasons why I could and would choose to go with the first person in spite of a lower offer.

But that's not the situation at hand.

It's three people offering me $1000 for something, I give it to you because you're the first person. Then, you turn around and say "hey, I'm selling this for $2000 because I never wanted it in the first place!"

The two other people who were waiting can't afford it. Some other guy comes along later who can afford it and pays up.

It's not fair, it's one of the nasty grimy sides of capitalism.

Scalpers are 100% middle-men who don't add value. The tickets would sell at base cost. All they do is artificially inflate the value of tickets.

> Scalpers are 100% middle-men who don't add value. The tickets would sell at base cost. All they do is artificially inflate the value of tickets.

Economic theory would say that

1) value, in contrast to price, is personal. Everything has a different value to everyone. For instance, it's a good bet French books have more value to me than to you, because I actually speak that language.

2) inflating value is impossible. Cannot be done

So scalpers inflate the price, not the value. And only because of an inefficient market. Why is a lower price market inefficient ? It's not at equilibrium. That means there are either shortages or oversupply. And indeed : your complaint points out exactly that : a shortage.

The scalpers actually do provide services for that profit :

1) they maintain ticket availability far beyond the original sale

2) they take risk away from the artist (some scalpers even in cooperation with the artist)

(I bet real scalpers would also point out that both of these, the investment and the extended availability involve actual work that needs to be done. As in answering mails, posting stuff online, going out to sell the tickets, ...)

So you're wrong on both fronts. They neither inflate value, nor do they lack services.

And frankly, the only person who can solve this for real is the artist : if they find a way to do enough shows so everyone can watch, that is (obviously) the only way to guarantee everyone can make it. This is not hard, but because of the risk rarely done. Ironically, more and earlier scalping is one of the things that would make it a lot easier for the artist to do this, at least financially. Some artists do this, but perhaps that is more work for less (average) reward for the artist.

Given these incentives, I would expect firstly that artists and venues would scalp tickets themselves, and secondly that all attempts at stomping out scalping will both make the problem worse and merely be a method to guarantee more profit for the designated scalpers. Of course in practice those are also exactly the people who don't want to take the financial risk, and so you'll have pussyfooting all around, lack of conviction, general complaints by everyone, and screwups.

Good post. Everyone also seems to forget that scalpers sometimes have to sell at a loss if the event is not as popular. This is why event organizers don't mind scalpers and only pay lip service to stopping them.

> 1) they maintain ticket availability far beyond the original sale

By artificially and significantly suppressing it in the first place.

Why do you think that ? They neither increase nor decrease the available places.

Ever try to buy a ticket from the proper vendor 10m after the tickets have been released?

Saying that they maintain ticket availability for longer, it's a zero-sum game. The only reason those tickets are around longer than they otherwise would be, is because alternate purchasers were unable to get them.

Put another way, if 100 tickets at $50 sell out in a day, and scalped at $500 sell out in a month, yes, the same amount of tickets is sold. But 'ticket availability lasting for a month' is only there because the scalper has removed the ticket availability for the $50 purchasers.

> Put another way, if 100 tickets at $50 sell out in a day, and scalped at $500 sell out in a month, yes, the same amount of tickets is sold. But 'ticket availability lasting for a month' is only there because the scalper has removed the ticket availability for the $50 purchasers.

Economic theory say that this isn't true. They should sell out at similar speed regardless of reselling happening or not.

And from personal experience: efficient markets are better than inefficient markets. I've seen quite a few inefficient markets and they're ... well they're stupid. They impose ridiculous costs (like having to F5 continuously so you can "deal" with the shortage, but that's quite a trivial one).

And yes, scalpers make the market more efficient.

The presence or absence of scalpers does not change the basic problem : not enough spaces for everyone who wants to go. That cannot be solved by introducing rules against scalpers. In fact, the opposite is true. Seriously, the opposite approach would likely improve matters far more : create a large-scale scalping company that would pre-purchase large amounts of tickets as an investment and resell them later. The presence of this company would massively improve ticket availability by enabling and incentivizing artists to make more spaces available, and this would make everyone's life better.

I don't see why that's "fair" - your definition of fair is entirely based on an assertion that someone with more money should be able to get more things at the expense of others, even when the person/entity providing those things doesn't wish that to be the case. Or, in other words, your assertion is that capitalism is inherently fair, because you're defining fair as anything that is the result of capitalism.

All the arguments along these lines with respect to scalpers get caught in the "is-ought" problem [1]. You are describing the economic situation and saying "This is the way things are at the moment, therefore this is the way things ought to be". It is a leap that you don't really justify.

If people want to take a libertarian approach, why don't you say it is the person selling the tickets prerogative to do every legal thing in their power to limit prices. It is their show after all.

It would be as if I started selling piggy back rides to my friends for $10. When some random guy realizes my friends really like piggy back rides (for whatever strange reason), so he buys all my piggy back rides. I'm all booked. He then turns around and tries to sell them to my friends for $20. What the scalper apologist arguments are saying is that any attempt by me to tell this scalper to get lost is somehow wrong, because I am disturbing the natural order of things. It doesn't take into account that I care who I carry.

To be clear, I'm not saying artists only selling to "poor people" is the sole right way or something of that sort. I'm just arguing against saying that second price auction is the only way to do things.

[1] https://en.wikipedia.org/wiki/Is%E2%80%93ought_problem

> If I offer you $1000 for something you're selling, and someone else offers $2000, who are you going to sell it to?

But audience are not fungible. If you are to spend an evening with someone there are more important considerations involved than who will pay you the most money to do it, and trying to buy their way to that privilege could be a strong negative indicator.

Well, why should the fan who is able to pay less money miss out in favor of the fan who has more? Are people fundamentally more deserving for having more disposable income?

The Artist (ie the provider of the 'value') is not making more profit, they have set what they feel their work is worth. Scalpers add no value and simply take. Automation of scalping is bad for everybody involved (edit: except of course the scalpers themselves), as typically bots will buy out tickets to popular events extremely quickly, leaving legitimate fans out in the cold.

Are some people fundamentally more deserving for having the time to wait in line outside a venue, or click reload on their computer for hours? It's funny that we implicitly accept that money is the way of assigning resources to their most valued use for most everything, but for some reason that logic doesn't apply to concert tickets.

If the performer were concerned about actually helping poorer people attend (rather than simply virtue-signaling), they could raise the ticket price to market value, and implement a lottery system for some block of tickets, similar to what the producers of Hamilton do. Best of both worlds!

This is just a concert we're talking about. Not healthcare. Not food. Not baby formula. Totally expendable and not crucial to life.

> Well, why should the fan who is able to pay less money miss out in favor of the fan who has more? Are people fundamentally more deserving for having more disposable income?

Yes, that's what money represents in the current society. You might as well ask whether people with higher income are more "deserving" of better houses, schools, cars, holidays, restaurants, airplane seats. I don't know why concert tickets should deserve a different treatment.

> Automation of scalping is bad for everybody involved (edit: except of course the scalpers themselves), as typically bots will buy out tickets to popular events extremely quickly, leaving legitimate fans out in the cold.

On the contrary, it's extremely good for legitimate fans who e.g. have a job and can't take time off to buy tickets at the exact minute they were released.

Why should the fan who is willing to pay more be prioritized over the fan who was prescient enough to buy tickets on time?

> Why should the fan who is willing to pay more money have to miss out, in favour of a fan who is paying less money?

They shouldn't necessarily have to. They should have to do the same amount of waiting in line, or struggling with whatever online box office system is in place.

Having more money doesn't imply being more deserving of going to an event. Without scalpers it would be more about the effort and desire to attend.

If you don't have time because you're working too much, consider that a sacrifice you're making to be more wealthy.

> If you don't have time because you're working too much, consider that a sacrifice you're making to be more wealthy.

Funny how we scramble to defend making anything that needs investment in time/effort/emotion/people, but can't be bought, into something that can eventually be purchased by someone with enough wealth. As if that's the most just state of affairs.

It sounds like you're saying it's humorous that we don't like rich people dropping loads of cash on things that should be fairly available to everyone?

I don't see the funny.

I'm saying it's funny how we tend to find excuses to justify and moralize that behavior. The top-level comment does this by explaining why driving up the cost of a commodity by creating scarcity is a good thing because rich people who don't want to wait in line can now cut it, while everyone gets to pay more assuming they can afford the new price.

By funny I mean tragic.

What's really funny is they argue against people being voluntarily able to enter in to other kinds of contracts (eg, requiring the name it's sold to match who attends) to do it.

They're not advocating a free market and society, they're advocating a serf market and society.

Scalpers don't create scarcity. They aren't buying tickets, and setting them on fire.

The artists are who create scarcity, by virtue of not having enough capacity to serve all fans willing the pay the retail price of the ticket. (Or by not doing tiered pricing, cheaper ticket distribution by lottery, etc.)

>> Except perhaps those die-hard fans who do not have the extra money available to see what may be a once-in-a-lifetime show.

The problem with this logic is that you assume since the "die-hard" fan does not have the money, he will simply give up and be shut out of being able to go.

As someone who was, and still is a huge music fan, I always plan the gigs I want to go see around when I was getting paid and my budget. I was able to balance seeing fairly unknown bands in small venues before they got big (once saw Korn and Marilyn Manson open for Danzig. Or HedPE, System of a Down and Static-X open for Fear Factory) with the larger, more expensive shows like Red Hot Chili Peppers, Linkin Park, or RUSH.

Most of my friends who are also rabid fans will know when a band is coming and plan accordingly. The whole idea that "die-hard" fans are being shut out is nonsense. We plan, we plot, and we scheme to see the bands we want to. I even took a gig at a CD shop so I could go see bands for free. I didn't care how much I was getting paid because the perks of seeing a national act for free with two of my friends was payment enough.

To me a "die-hard" fan will find a way regardless. I would categorize more fair weather fans with the attitude you're conveying. If they get a ticket to a "must see" show, then cool, if not, well, it's not a huge deal to them.

Brought to you by Ayan Rand

I was saying that artists and ticketmaster and politicians are happy to sell the narrative that "ticket bots and scalpers are the problem and we can't do anything about it" when that is very much not the case. Lots of fans buy this, because they don't know any better. As a journalist, the writing I've seen about the ticket industry the last year has been so, so bad and so simplistic and so infuriating, so I decided to do this piece to fight a lot of these misconceptions

I'm glad you wrote it!

I was in quite a heated debate about this a few weeks ago, where everyone else in the room disagreed with me. Hopefully public opinion will start to reflect market reality in time :)

Because bands make less money they produce fewer shows which is another net loss.

Further, it's not die hard fans that use scalped tickets it's people with disposable money. If anything fewer die hard fans get tickets because a fan will showup at 12:00 to buy tickets but they don't build a bot to get them in the next 0.1 seconds.

This is incorrect. There's a false equivalence between the fans who want to see the gig the most and the fans who are willing to spend the most. The current system means that people with lots of money who aren't super interested will out compete raging fans on low incomes.

I'm not suggesting that basing it on first come, first served is ideal, but I think it's probably fairer.

If an event organiser/ticketer wants to use dynamic pricing, that's up to them. Sometimes they don't want to be cause they'd rather build or reward loyalty. Maybe they want to make sure that low income households have a decent chance of getting tickets.

The system above is advocating for efficient markets over everything else.

> There's a false equivalence between the fans who want to see the gig the most and the fans who are willing to spend the most.

This is how scarce resources are allocated. There is no fairer way to decide who wants something the most than to ask who is willing to give up the most to acquire it.

> If an event organiser/ticketer wants to use dynamic pricing, that's up to them.

Absolutely. And if a third party wants to buy tickets at the offered price, that's up to them.

> There is no fairer way to decide who wants something the most than to ask who is willing to give up the most to acquire it.

What is 'the most' for one may be pocket change for another.

"...There is no fairer way to decide..."

Now, this seems unimaginative. Surely, especially given all the feedback and critique on this thread, you can come up with other factors besides price that should influence fairness in this transaction?

We may decide that introducing other factors (like band loyalty or degree of enthusiasm for the show) is difficult, impractical, or threatens entrenched interests, but that's another issue.

We can't let enthusiasm for the allocation properties of markets ("it's Pareto optimal!") bleed over into value judgements about the outcome ("...so we all agree it's most fair!").

> There is no fairer way to decide who wants something the most than to ask who is willing to give up the most to acquire it.

A $200 scalped ticket is a few hour's work for us in the IT bubble. A $100 original ticket is a few day's work for someone on the minimum wage. Who is willing to give up the most in this case?

I completely agree. Only those with money should have the right to enjoy life. Or education. Or health services. Or their favourite bands, if that's the case.

Without education you accomplish much less than you otherwise would in life. Modern society is not sustainable without widespread education. Without health services your risk of death or disability increases. But if you can't see your favorite band live you substitute some other form of entertainment.

You reasoning is a pretty good example of why the median person should be very wary of anyone saying that free markets and their "efficiency" are a good thing, or will result in good outcomes for them. They will result in good outcomes for the richest, sure. We can agree to that.

You are conflating die-hard fans with die-hard wealthy fans which is a little silly. Not all fans have the same marginal value of pocket change. One median-income fan may be easily be more die-hard than another more blasé millionaire fan, yet he is also a die-hard fan of feeding his children. Just because he is unwilling to sacrifice his children to go to the concert does not mean he is less of a fan. The millionaire is not really a die-hard fan, but can easily pay, so he does.

So no, the fan who wants to see the gig the most does not get to see it. That's only true if everyone has the same amount of disposable income. They don't.

For the median person, "the free market" just means "the person with the most money gets to make all of the decisions." So much so that a person who cares much less can affect an outcome he hardly cares about, because he also does not care about the money involved, because he has so much of it relative to the median person.

"I mean, it's one banana, Michael. What could it cost? $10?"

Isn't this easily solved with a fan club that any member gets up to 2 tickets that are non transferable (physical printed tickets only via mail)? The benefit of being in the club is to getting access to these. Rich has a lot less to do it and then there are a lot less for the bots anyway.

People are lazy and will always choose the easiest option. If the only way to get good seats and cheap tickets is a fan club (e.g.) and you make that simple, people will change their behavior. If you can only get good seats on StubHub, that's where you'll go.

Scalpers join fan clubs and have people on the inside who can do name changes for them

However justifiable it might be, this ticket gouging is the reason I haven't seen a concert in almost a decade. Maybe I'm a cheap bastard because I refuse to pay hundreds for the few decent artists I've seen on tour, but it's not that I don't have the money.

The first NIN concert I went to, I only had to steer clear of certain mosh-pits. The last one I had to put up with a sea of "brighter than the stage" phones upheld to block my view. I don't particularly care if everyone knows I was there, and I can watch incredible videos from home while drinking Rhinegeist.

I do think Kid Rock's approach to sales (tickets and beer) is awesome, and I grew to respect him for thinking outside the box. It's just a shame that I'm not a fan by any means.

Your first two paragraphs seem to contradict each other. Is it the prices you're bothered by or the phones you're bothered by? They're two very different issues. Indeed I suspect if the primary market prices were higher we'd see less use of phones.

It's not contradictory at all. He's complaining about the prices, and then pointing out that the concert experience, even after paying a boatload for tickets, is very sub-par because of the bad behavior by other concertgoers.

If the high ticket prices guaranteed him a first-class concert experience (no bright cellphones in the air, etc.) then at least the high prices would have some justification. But as it is, they don't when the experience is so poor.

Usually, with other luxury goods and services, the prices are outrageous, but at least you can count on a premium experience. You're not going to buy a Bentley car and get the same crappy treatment you get at a Chevy dealership, for instance.

and so the tickets go to people who are willing to pay the price and enjoy the show, and the market continues to function effectively.

Thank you for explaining it better than I can apparently. I might have went off on a tangent, but you hit my meaning. Live events, at least where I live, have been increasingly meaningless when you go under the impression you're paying for a unique experience. I paid too much for NIN floor tickets in the past, but I walked away with no regrets.

This may be beside the point to market demand for tickets, and more of a systemic problem for lots of things. Maybe there's an increasing number of people who just need to appear awesome on social media, and are willing to pay more of a premium for second-hand, blurry proof of attendance. I know it's a cliche at this point, but with concerts it makes me particularly sad that people can't just be where they are.

> drinking Rhinegeist.

fistbump for a fellow Cincinnatian. I feel the exact same way about football (especially the Bengals). I can buy 10 cases of beer for what it would cost me to freeze my ass off at the stadium, and they are going to bungle it anyway. =D

Awesome, I was genuinely curious if anyone would recognize the beer. I've been seeing it further and further away from Cincy.

Ya their growth in reach has been amazing. Rhinegeist's biggest innovation that allowed them to explosively scale was actually around distribution. I've heard that it pissed a lot of other distributors off, who then lobbied the state org in KY and closed the loophole that they discovered.

Are you on the Cincinnati Tech slack channel? [0] Based on your comment history, I'm curious if I've run into you at a tech meetup at some point.

[0] http://cincytech.herokuapp.com/

Wow, I guess I'm really out of the loop on what they were up to. I've just become a big fan of Cougar, and being able to find it everywhere. No, I haven't been, but I will be now. Thanks for the heads up.

> I do think Kid Rock's approach to sales

Kid Rock is one of the few artists to actually solve the problem (if you view it as one) of a secondary ticket market. It's a market, it responds to supply and demand. He just increases supply until demand falls. For example, he's playing Detroit for 6 consecutive days in 2017. He did similar in the past.

You'll still have some premium tickets being resold over cost, but he's neatly solved the problem of fans not being able to make it to the show by actually addressing the underlying economics.

That is probably the most free-market way to solve the problem: just increase supply until you can sell to everybody who wants to buy.

No real market can ever be built on the idea of guaranteed sale. The idea that someone wants something is not sufficient to mean they can have it. Concert tickets are limited in number by venue and artist.

I disagree with the assertion that result is good outcomes for the richest. Many concerts, store sales, and such, also have people camp out for access.

Online systems have no person to person interaction requirement which makes it ideal for automated systems. So the real result is, when up against a machine bidding for a service or item you want of limited supply you will lose.

To prevent that might require limits based on some form of personally identifying the buyer and then restricting use to only that person. A bit privacy invading but it could be done. The only way it will get done is for the artist involved to force it.

Maybe that would be a better way to do it[1], but that's not actually what happens.

Buyers will still pay $500. They will just pay it to middlemen instead.

Fans will not "get to trade their time waiting in line" for tickets, so that the golden admit-one is rationed by die-hardness. Instead, such fans will be right there in line with those choking said lines for money. And which they're also better at.

Sellers could move to what you suggest. They could do a lottery, and they could lock the winners by ID to their purchase, completely non-transferrably. But none of them do it, because they aren't optimizing for what you claim they are.

If and when they start doing that way, those would be applicable points to raise in defense of that practice.

[1] i.e. if you replaced "charge $500 to the N highest bidders" with "charge $10 to N randomly-chosen chosen people".

> are a good thing, or will result in good outcomes for them

No one says that all individuals will be benefited by an efficient market. But they are a "good thing".

> Not all fans have the same marginal value of pocket change

Yet money is worth the same to the band anyway.

I want a Ferrari, but I'm not wealthy enough to afford one - who should be discounting my Ferrari?

> One median-income fan may be easily be more die-hard than another more blasé millionaire fan, yet he is also a die-hard fan of feeding his children

millionaires are also pretty rare, are there that few bands, playing that few concerts that millionaires get all the tickets?

What is I really really want a Ferrari, more than that lackluster millionaire - then do I get a discount?

Why are music concerts different to any other limited-supply product? It's entirely fair that "the fan who wants to see the gig the most" is not considered, because how, exactly, does anyone prove this is actually true?

> the person with the most money gets to make all of the decisions

The person willing to risk the most value. You want to make decisions without risking anything? Without having to work in advance to have enough to risk?

> because he has so much of it relative to the median person.

A wealthy person's money should only be able to buy things no one cares about?

Except that the system being discussed works as if ferrari released their new cars at $5000 -specifically to allow people with less money to afford it-

But released far fewer than people that wanted to buy a ferarri.

naturally a market of dealerships would snap up all the ferraris and sell them and much higher prices right? but that's not quite what ferrari intended when selling their cars at $5000. How they can get the cars into the hands of truly random people instead of always to the dealer is the problem here.

> that's not quite what ferrari intended when selling their cars at $5000

If this is what they intend, they could go about it differently; other posters suggest venues happily allow touts to take the risk away from the venue. A random lottery would be perfectly legal, and allow the ticket distribution to be random, if the venues desired this.

I'd also note, any company that actually did this, might not be able to maintain shareholders, since some companies aren't supposed to be anything but self-interested by design. Bands could always insist, though.

> If I am willing to pay the asking price for tickets, I should be able to buy them. If you're offering them so cheaply that I will happily buy all of the tickets then you're offering them too cheap and you can't really complain if I buy them.

And if I'm an artist who wants to ensure that fans without a lot of money can see me? Should I be allowed to offer a concert where tickets cost 20% of market value, or should "the market" step in and say "no. I'm the one in charge, and I say that once you reach a certain level of fame, only rich people are allowed to see you live. sorry, but you've outgrown your original fanbase."

That feels like kind of a sick attitude.

The solution here is either the invisible hand of the market, OR tight controls exercised at the artist's discretion.

>And if I'm an artist who wants to ensure that fans without a lot of money can see me?

Either run background checks on fans and only allow people without a lot of money to take those seats, or throw large enough events such that there's enough supply to meet the demand at your preferred price.

This really feels like treating the invisible hand like a religion. At all costs, price controls must be avoided! The will of the merchant is irrelevant! The only thing that matters is maximizing profit- any other solution would commit the heresy of denying power to wealth!

Seriously - either background checks, or rent out yankee stadium? No solutions in between?

What will of the merchant here is being thwarted? The question was how to fulfil the merchant's desires, and I gave several possible answers.

As long as there's more demand than supply, some mechanism will allocate the scarce supply to the buyers who want it most in the sense of being willing to pay the most for it. Any other system cannot be pareto-optimal.

> What will of the merchant here is being thwarted?

Allowing poor fans the opportunity to get in to a show.

> I gave several possible answers

No, you gave two. And the background check one was so ludicrous that you probably should have kept it to yourself. And you missed the most obvious, don't allow ticket resale. No need for hundreds of expensive financial investigations, and you don't have to rent out a stadium. Dedicated fans can still get a ticket, regardless of their wealth. Mission accomplished.

Why can't they meet the demand by renting a larger venue?

Banning ticket resale is also expensive at scale.

At some point, there's a limit to practical venue size. Football stadiums are probably the most common large venue readily available to rent, and that will only hold at maximum 60-100K. Large outdoor venues can hold a lot more people than that, but the logistics probably are a lot harder (most large outdoor events go for the "festival" approach, for all I know it is not worth it to do that scale for single artist events).

TBH I imagine (as implied in the article) scalping is "tolerated" a bit by venues because some of the risk of a dud event is offloaded to the scalpers. The main problem with high priced concerts is probably more in artist image. It's harder to have a "mass market" friendly image if your concert tickets are not really accessible to the "mass market". Branding is critical for artists; if chasing the short term dollar is bad for the brand, it may not be the best thing to do long term.

Allocating a section of low cost tickets via ID based lottery (ala Hamilton) is a great solution for this in my opinion.

> Why can't they meet the demand by renting a larger venue?

For a variety of reasons. If Sting reunites with The Police and goes on tour- sure, rent a football stadium. Some bands prefer smaller, more intimate venues. Some may have a hard time competing for the limited spaces at larger venues. Some may choose to avoid that level of fame. Who knows? It's none of my business.

Bands are always free to chase as much fame as they want, and to make their own policies about pricing or resale or whatever. I just think it's a little dystopian to say they're required to zealously follow some sort of capitalist ideal.

> Banning ticket resale is also expensive at scale.

Checking tickets at the door doesn't get much more expensive if you also require showing an ID with a name that matches the name on the ticket. You can even use the barcodes on most IDs, no fiddly reading required! Remember, you're trying to keep out the people who capitalize on scale, so if somebody sneaks in with a resold ticket and a corresponding fake ID, who cares? A 99% solution is fine.

>require showing an ID with a name that matches the name on the ticket

Then scalpers would just pre-sell tickets and buy it in the given name. There's an arms race and it's not easy to fight the market.

No, you show ID to buy the tickets too. This isn't brain surgery, folks- plenty of venues already do this. It's not perfect, but it's good enough to make scalping not worth the effort.

> And if I'm an artist who wants to ensure that fans without a lot of money can see me?

Which fans without a lot of money? How do they get picked? Lottery? Who can click the fastest? Who has no job and can stand in line for days?

> Which fans without a lot of money?

If you have more fans than seats, some people will be unable to attend. That's unavoidable. But the constraint you're replying to says "ensure that fans without a lot of money can see me", not "ensure that all fans get to see me". So your criticism is a little off target. Yes, those fans willing to show the most dedication might have an advantage.

But we can solve the majority of the "disproportionate power to the wealthy" by the simple expedient of only allowing one or two tickets per person, and matching ID to purchasers of the ticket at the door.

Release a gratis band-themed mobile game, with user ID tied to the phone owner.

In this app, allow the user to collect a free sweepstakes entry, with a 60 minute cooldown timer, to a maximum of 8 entries per calendar day. Whenever concert tickets go on sale, reserve a block on the floor from the Nth row to the back of the floor. (We all know that the spots all the way up front are for the groupies, superfans, and rich people.)

Allow users to allocate their entries to specific shows/venues on your tour. Hold a lottery for each show, and allow the users that are drawn to buy 2 tickets for $2, and an exclusive concert tee for $21. Allow a few winners to get gratis superfan passes, to meet the band, collect autographs, get the gratis ultra-exclusive VIP concert tee, scream and collapse on the fainting couch, or whatever it is your hardcore fans would most like to do. Close to concert time, if the venue is not actually sold out, do another lottery and make a second-chance offering to get any previously unsold tickets for $1 each. Any user that does not or cannot buy tickets can then spend their entries to get gratis/discounted merch or media files, or just get their remaining sweepstakes entries back, perhaps to try again on the next show.

The user arrives at the venue, and presents a certain screen of the app on their phone to be permitted entry.

This rewards dedication to the band (and its licensed merch). In order to maximize your chances, you have to check in every hour that you are awake and not at work or in school. You can't get those tickets any other way, and if you don't make the effort, someone who is more into the band will.

Also, the app itself can recruit and assimilate new people into your fanbase. And you can make sure that the band's own holding company controls the IP and app-based revenue, not the record label, promoter, or distributor.

Buy a bunch of cheap phones, farm out or automate playing the app. Sell the winning phones for profit.

Use app activity to scale the reserved bloc of tickets. Dedicated fans still get to attend shows. The goal isn't to maximize ticket revenue, but to fill venues with a quorum of fans and sell them status-signaling merch.

You can realistically expect your real fans to buy one tee per tour. Farmer accounts will likely show maximum sweepstakes entry activity and no game-play activity until winning a lottery, then will refuse all the merch upsells and never be active again. You can just dump those user ids into the "ignore" bucket and rescale your reserved bloc so that there are still enough seats for the real fans.

In any case, why would anyone buy a transferred fan club burner phone instead of a transferable dollar-priced ticket from a scalper? Why crack the proof-of-fandom test for a single artist, when you could break the CAPTCHA for all of Ticketmaster? The hypothetical attack you imagined requires greater effort and produces less profit than if you were just a regular ticket scalper.

How many artists, do you think, value their fans over money?

Plenty, I'd bet. I'd certainly expect the concentration of people with such ideals to be higher among the population of artists vs. the population of armchair economists.

But I think a better question is, how many artists should be free to value their fans over money?

It's not a question of "should". You can't beat the market. You can fight it, but you will lose. And so will your customers, most likely.

> Without ticket scalping: [...] Some fans get to watch the gig, and others don't, and the availability of tickets bears no relation to how much you're willing to pay to get hold of one, only to how quickly you decide to book one.

How quickly one decides to book a ticket seems like a better way to define a die-hard fan than how much money one has available for a ticket.

Sorry for the iffy analogy, but the first thing that comes to mind is hedge funds speculating over food [1], and the real-world impact that has on poor people that clearly have no say in the game.

Scalpers are making a ton of money by creating an artificial shortage of tickets, not because there were already people willing to pay such a high price. If fresh water would cost $100 tomorrow, I'm sure people will still be willing to pay for it (because they really want it, and that's the only price they can get it for). Doesn't mean that it's fair in any way.

[1] https://www.theguardian.com/business/2010/jul/19/speculators...

> If it weren't for ticket-scalpers, die-hard fans who are willing to pay extra to secure a place would have no option.

VIP tickets sold by the venue exist to solve the problem of "some fans might pay more than others to see the same show" and fans get extra value with their ticket purchase in the form of a VIP experience.

Tickets sold by scalpers don't have the added value beyond the value created by their artificial scarcity.

In my experience VIP tickets sell out faster than normal ones. I'm not saying I understand it, but there you go.

Here's hoping a cabal of billionaires don't start applying this logic to things like food or houses.

Ticket scalping hurts artist exposure by finding an equilibrium point on price alone, where many artists may really want to maximize audience size and not earnings from tickets. Concerts are like promotional events for their brand and many people buy albums, swag, post on social media about the event, and that's all beneficial to the artist. Ticket scalping removes the ability of the artist to maximize attendance (and potentially limits the groups in attendance to ones outside the bands core marketing demographics)

I think it is more complicated than treating tickets as widgets to be sold.

Solution: when buying a ticket, you pay an additional amount in deposit, which you receive back when you actually arrive at the venue.

This is easily circumvented because the deposit will simply be priced into the scalped price...

But it will become much harder to hoard lots of tickets. And it will be expensive to not be able to sell them all. It guarantees that all seats (for which a ticket has been sold) are actually filled.

That adds a lot of overhead (who is responsible for marking attendance? How is the refund managed, especially in the case of cash payments?), opens up new forms of abuse around how you count attendance, but most importantly doesn't prevent scalping from finding an equilibrium above the ability of a demographic to pay, and I am not even convinced it will stop scalpers from finding price points that have profit for them but lower attendances.

I mean, should you need a staff economist to price your concert tickets?

> I mean, should you need a staff economist to price your concert tickets?

If you want to avoid your tickets going to the people who are willing to pay the most for them then yes you're going to need an economist, and even then you will likely fail. (As you should, IMO)

Maximize audience size by renting a large enough place to meet demand at the price you want to sell at.

That's a better solution imo, but that assumes a perfectly flexible supply of venue space that often isn't there in practice. When it is, I also imagine the price is free to scale exponentially with venue size.

Also, say there simply aren't enough teenagers to make it reach an equilibrium point on price alone. This method still ignores the fact that the artist might want to optimize for something other than ticket revenue. A sold out venue of trendy twenty-something's is can be worth much more than a handful of rich die hard fans willing to pay tenfold.

Finally, it requires a really good handle on what that expected audience is going to be, not just what they can pay, which is hard to do.

>Also, say there simply aren't enough teenagers to make it reach an equilibrium point on price alone.

If there are scalpers, that means there are more people who want to come than seats available. If the price is, say, $50, then there's a certain number of people who would buy at $50. If that number of seats is made available, then the scalper incentive disappears.

>A sold out venue of trendy twenty-something's is can be worth much more than a handful of rich die hard fans willing to pay tenfold

I mean, if you want younger people, just make age restrictions. But you can have both by just getting a larger venue.

>Finally, it requires a really good handle on what that expected audience is going to be, not just what they can pay, which is hard to do.

Well that's where scalpers make the market more efficient, by having a lot of experience knowing what the expected audience will be.

It makes the market for the tickets more efficient, but that isn't what the artists are optimizing for. They want to be able to sacrifice ticket revenue for exposure. Maybe they want to select their audience for hardcore fans willing to spend time on getting tickets rather than money, maybe that translates into better brand referrals because it selects more devoted fans.

You're more okay with barring people over 25 and allowing scalping than disallowing scalping? Ideally, yes, the venue would resize to meet the needs of the artist, but this has already become a very complicated calculus, one possibly without the same solution space since there are a small number of fixed sized venues. It could simply be impossible to get the same audience by these methods.

> If the price is, say, $50, then there's a certain number of people who would buy at $50. If that number of seats is made available, then the scalper incentive disappears.

Right, but this assumes that there isn't an equivalently sized population of people willing to pay more that will buy them instead. My argument is that audiences aren't interchangable and that real harm is done when you force the artist to select the audience on ability to pay alone, as you are proposing.

Also, nothing says the scalpers get it right. They just go out of buisiness or make a loss if they don't. That doesn't stop them from getting it wrong and hurting the artist and the fans in the process.

>Right, but this assumes that there isn't an equivalently sized population of people willing to pay more that will buy them instead. My argument is that audiences aren't interchangable and that real harm is done when you force the artist to select the audience on ability to pay alone, as you are proposing.

The set of all people willing to buy at $50 is at least as big as the set of all people willing to buy at more than $50. Demand curves slope downwards. If you supply enough to meet all demand at $50 and price at $50, then everyone who would buy at $50 does and there's no extra seats.

There are several hypothetical problems with this in practice I can imagine.

First, it's still a problem of finite space. It is not going to be practical to scale out until supply reaches demand in many locations. There are only so many Friday nights in a month, which also makes fungible repeat shows finite, and repeat shows cost time that could be better spent increasing global coverage.

Second, price and venue-filling are signals of quality, so there may actually be some people who do not purchase tickets that appear to be too cheap or do not go because they do not feel invested when the ticket price is low. Then this results in empty seats which negatively impact the artists publicity.

Third, the discriminator when you have a low price point but low supply is the willingness to get in line. This can be a valuable metric to select audiences. Removing it makes it harder for artists to select their audiences.

>Third, the discriminator when you have a low price point but low supply is the willingness to get in line.

Not when they're selling online.

> It makes the market for the tickets more efficient, but that isn't what the artists are optimizing for.

As soon as you are selling tickets, you no longer have full control over that. If you want to optimize your audience, you need to make allowances, and that may mean a lottery of will-call tickets or something. You don't get to make money on those tickets by selling publicly and also have the the ability to fully craft who goes. That goes out the window once you decide you want to sell publicly, and IMO that's the way it should be. That's how markets work.

Bigger venues have different acoustics. Not all music genres are suited to big venues.

Then do more shows in the same place until demand is met.

But when everyone and their dog can attend, as opposed to just the <deserving demographic of hardcore fans>, the event stops being exclusive. What's the point of going, then?

Sure, it's exclusive when tickets are only available at high prices, but surely, you understand that to be the wrong kind of exclusive!

That's part of why the existing equilibrium of cheap prices+scalping=expensive prices exists.

This is partly why the ticket prices are so damn high - manufactured exclusivity. IMO a "true" fan is there for the music and performance, not so they can brag about their manufactured exclusive moment on social media.

The artists will pretend like they're performing for the fans, being the good liberals that they are - in reality they're rich partly because of exclusivity.

> What's the point of going, then?

Most people go to a show to enjoy the show, not to revel in exclusivity.

Also, it's weird to use "minimise audiences for exclusivity" in a thread started by "maximise audiences for side-channel sales"...

> where many artists may really want to maximize audience size and not earnings from tickets.

Then get a bigger venue or how about stay in a location doing shows each night until they do not sell out. The artist can absolutely change the supply to meet the demand if they so chose.

>Concerts are like promotional events for their brand and many people buy albums, swag, post on social media about the event, and that's all beneficial to the artist.

This isn't true. These days, musicians make the vast majority of their money in touring, from both ticket sales and merchandise (t-shirts) at the venue. They don't make squat from album sales. Notice how many old 70s-80s-era classic rock bands are out there touring. They aren't selling brand-new CDs; they're making money with ticket sales. Come to think of it, this is likely why concert tickets are so much more expensive than they were decades ago.

you'd also be surprised how much venues charge, worse than rent.

Not that the sales occur on premises, but the sales are spurred afterwards, much like how a television advertisement works.

I'm hoping this post is satire.

>Everyone's a winner

Except the people who badly want to see a band but unfortunately do not work for a trendy startup and therefore cannot afford the tickets in their increasingly gentrified city.

> If it weren't for ticket-scalpers, die-hard fans who are willing to pay extra to secure a place would have no option.

This is fantasy free-market nonsense. Fan clubs routinely get a round of ticket sales before it's opened up to the general public. It's quite common for an event to have tickets sold in batches to different groups, and for there to be pre-event events as well. If you're willing to pay extra, join a fan club.

It's also faulty reasoning - if other die-hard fans have already bought the tickets from scalpers, you can't just offer more money to the scalper and get one of their tickets. You can, however, buy directly off that other fan, but you can do that already anyway.

Louis CK went the extra mile to work with specific venues to circumvent Ticketmaster and eliminate scalping. Some venues have contracts with Ticketmaster and could not be used. It's totally doable if you sell your own tickets, but most artists (band managers) are not up for the challenge.

He explains:

“Most tickets are $50 or less. There are no ticket fees for any shows. My agent worked hard to accomplish this by negotiating in every city and finding venues that were willing to help us make the shows affordable. In some cases, the venues and I are splitting the ticket charges between us so you don’t have to pay it. In the end it’s worth it to me because I don’t want coming to see me to be a painful choice for anyone and either way I’m making plenty of money on the tour. I sincerely hope that everyone takes advantage of this by simply buying the affordable tickets and coming to the shows. For those of you who plan to take the opportunity of the simple and cheap ticketing on this tour to make a profit at the expense of my fans, please note that we are working hard to prevent scalping and that if you resell your tickets at an unfair price, you are risking having your tickets invalidated. Also if you purchase tickets to my shows from Stubhub or other scalping sites, that ticket may not be valid.

Source: http://consequenceofsound.net/2016/05/louis-c-k-announces-22...

Not directly related, but my dad used to take people to major tennis tournaments through a company he started. Many times, those who'd purchased tickets for the entire tournament didn't want to go to every match, so they'd ask him if they could sell him back individual tickets, happily taking face value. My dad, who speaks several languages, was nearly always able to move the tickets for far more than face value, and has told me many a story about getting to know professional scalpers across Europe. Every time I read a story about scalping it reminds me of him.

Here in Japan it's quite common to have ticket lotteries and ID checks for certain popular/easily oversold artists. Better odds are given to early-bird applicants and fanclub members.

Why is that so hard to implement?

If I remember correctly then Rammstein is doing this on their tours. You can only buy a ticket with your name on it and it will be checked at the entrance.

Live Nation and its ticket distributor Ticketmaster consistently promote scarcity by diverting the majority of tickets into the hands of resellers like TicketsNow, which is a Ticketmaster subsidiary so they can get the full demand rate in the secondary market. The artist gets a cut of this, it's all a scheme and nobody at Ticketmaster cares about the bots who fight over the tiny amount of released tickets.

Artists know they can charge much more for tickets, but can't do so overtly because everybody will cry in the media about them locking out their "true fans", so hence we have this scheme where bands like U2 scalp their own tickets to get paid what they are worth.

Also, doesn't Ticketmaster benefit from the scalping through more transaction fees anyway? Between TicketsNow and the increased transaction volume from scalpers/flippers, seems like TicketMaster can't really lose.

Live Nation owns Ticketmaster, and often the venues too, so in the end it all flows back to the promoter from drink pricing to ticket reselling. We used to joke in highschool that the guys punting tickets for 10x the price in the parking lot of shows were Ticketmaster employees and now they actually are.

In most cases, they aren't diverting tickets directly to TicketsNow, and if they are, it's a select few. They don't need to. They sell to the public, which includes resellers (whether they be fans or brokers), and that public then sells the tickets on TicketsNow, which show up as verified resale tickets on the ticketmaster/livenation website if barcodes are supplied (or you sell directly out of your ticketmaster account). You can actually list and sell some tickets this way prior to them being available to download, as it syncs the token for the purchase and sells that, and delivers when the tickets are actually issued (tickets routinely have a delayed delivery now).

Ticketmaster makes money on every sale (fees, as well as 7%-12% of the sale amount) so it's not like they are really losing anything this way. In fact, they may make more money, since even if the tickets sell at a premium on resale, if they don't sell for more than the cut the exchange takes, the broker still loses money (which ends up in the hands of the exchange).

It is true that some artists and venues are more amenable to this than others though. Some allow the ticketmaster sanctioned secondary market (TM+), and some don't.

In some cases they definitely are diverting directly, U2 only sold 1/4 of their tickets here through TM, the rest were held back for secondary market Seatwave and TicketsNow (both owned by LiveNation/TM). By directly capturing the secondary market the band can get a cut of this revenue, if they just allow the public to resell and TM gets all the fees the band makes less income.

Or just look at Eventbrite where you can only request refunds and can't transfer tickets.

Solutions exist, it's just that no-one who has the power to fix it is motivated to do so.

When the Rolling Stones did their last tour in 1981 --those were still the days when rock and rollers hoped to die before their geriatric years and The Who would perform their Final Tour just a year later -- the tickets (at least in the US) were by mail and via lottery. Payment was with cashier's check only and only two tickets per order. [1]

It would still work today. For fans with money, it would be less convenient than buying through a scalper. It would be more convenient than TicketMaster since ordinary fans cannot buy tickets through it anyway. It would raise costs for scalping businesses and somewhat level the playing field (it is impossible to completely level a playing field between individuals and well capitalized businesses).

Anyway, TicketMaster's business has changed less than the music industry and get off my lawn.

[1]: The price was an outrageous $16 each. But it was also the days of festival seating and the best seat in the house was a matter of will. Down on the stadium field, over the course of the day we had worked our way to within ten feet of the stage by the time the Stones opened with their new hit single, "Start Me Up." No really, get off my lawn.

Is it cool if I just sit on your lawn and listen to your interesting stories? I'll pluck weeds!

My bot already purchased all the tickets for his lawn in case you'd like to buy one.

That may meet your priorities and maybe even the band's but it most definitely does not meet Ticketmaster's in a world where they can offload all the tickets in 15 minutes and charge the maximum palatable fees with basically no variable costs.

And Ticketmaster is in control of this process, so...

After commenting, I suspect that the TicketMaster system meets the requirements of most bands. This is noted in the article for the reason you mentioned, but I think the current situation provides additional business utility to the performers.

$70 tickets don't segment the market in the same way $700 tickets do. The expected lifetime value of one $700 a ticket fan is probably much more than the expected lifetime value of a $70 a ticket fan. The $70 a ticket fan might be stretched and is less likely buy a hoodie and get drunk on craft beer and use valet parking...all of which the band gets a cut.

Some bands still do this. For example the Dave Matthews Band Warehouse club is pretty much the modern version of this. When you join the Warehouse, you get access to a pool of tickets only made available to Warehouse members. The pool contains a wide variety of tickets, and the quality of tickets a member can get is based on how long they've been in the club. Members can only buy a small number of tickets, I believe a max of 2.

Long-term members must make a killing reselling their tickets!

They only get two tickets. And I simplified the explanation a bit. It's a lot like a sports draft. The longer you are a member, the better your odds are of winning the lottery on the better tickets.

My favorite band is Wilco, and they have effectively eliminated scalping of their tickets. Here's how:

When you buy a ticket you can only buy 2 at a time and you must provide your name. To attend the show, you show your ID at the venue and they find you the the ticket(s) that match your name. At this point you and your guest must enter immediately and there are no "ins and outs".

So to scalp a ticket, you'd have to bring the person you sold it to into the show with you. That's a lot of effort!

Are there downsides to this? Sure. The first is that I'd gladly pay more to see Wilco but I can't but my way into the show. The second is if I buy tickets and something comes up I can't easily transfer them to another fan. Is all of this probably worth it to make sure that they can have an intimate connection with their fans and nobody else profits off their shows? Yeah, I think so.

I wrote this story and am happy to answer any questions you guys might have. Lots of information I ended up not using because the article was already incredibly long or I couldn't corroborate it (but believe it to be true from various interviews), etc.

Thanks for the article! I love going to concerts (actually I grabbed pre-sale tickets for Lady Gaga just last week) so I found it all super interesting.

can you explain some more details about the attempt of the prosecutors to argue for "hacking" based on their (apparently wrong) assumption that Wiseguy's system was using OCR to answer a Captcha?

this part just doesn't make any sense to me. you said

> The government argued that OCR-using bots would need to use Ticketmaster's source code to be implemented properly on the site, and would therefore be a "circumvention" of Ticketmaster's software.

I don't understand why they were trying to make this argument. OCR is a sub-domain of computer vision. It involves having a program look at an image and attempt to discern alphabet characters in it. This definitely _does not_ involve accessing the source code of the system. It's interacting only with what is shown publicly to normal users.

So what gives? Why did the prosecutor try to make this argument? It's technically incorrect in a serious way.

This is the exact question I came here to ask. Surely OCR is more "humanlike" and less "hacks" than the trick of indexing all of the images.

I've wondered if you could price tickets with an algorihm where they start out high and then over time or volume get cheaper and cheaper. If a scalper jumped in first they would pay a high price, later buyers could get tickets much more cheaply, if they come in later they won't have the desirable tickets which sold early.

How would this be in the best interest of the venue/artist who want to move tickets quickly and reduce risk? Seems like this would favor only those concerts destined to sell out or be popular.

Ideally it would maximize the revenue going to the artist and not to the scalper. Lets assume you worked it this way.

Artist X, playing 3 shows (Friday eve, Saturday Mat, Saturday Eve) would normally put tickets on sale lets say a month in advance for $20/$30/$50 (General Admission, Main Floor, Orchestra (rows 1-3)) each. Now in this new system they put tickets on sale 6 weeks before the event and in the additional two weeks prior the prices start at $200/$300/$500 and decay in price linearly by date to their 'marked' price over those two weeks. So each day sees a 7% drop in the 'over' price (so from $200 -> $20). Landing at the one month mark at the 'regular' prices.

In scenario one, it does nothing and no one takes advantage of early access to higher priced tickets and the tickets are on sale at "list' price 1 month ahead of the date as usual.

In scenario two, some people are really looking forward to the show and wait until the prices come down to what they are willing to pay for the seats they want prior to the tickets reaching their "list" price. That gives the artist/venue a bit more money for the show.

Scenario 3, lots of people want to go, they buy out all the tickets during the first two weeks of availability at higher prices. The artist/venue get a lot more money for the show.

The challenge for scalpers is that if they buy the tickets when they are expensive, they might take a loss on them (they don't really want to go to the show).

What this scheme tries to do is to move the market dynamics around a potentially mispriced product so that the artist/venue benefits if it is mispriced rather than the scalpers.

True, but it does seem like a good idea for the type of events that everybody knows will sell out, mainly to scalpers, in a matter of minutes.

I'm really surprised to see so many from the HN audience against scalpers, considering how libertarian the site leans.

If there's any market where a completely free market approach is applicable and actually desirable, it's this one.

I've bought maybe 40-50 tickets for various events (gaming, concerts, sports) over the last 5 years, and 99% of the time, the price of the ticket was negligible next to all the other expenses (travel and lodging mostly, but also food). And yes, most of those tickets had scalpers operating on them, pricing 2-3x higher than the nominal sale price. Even at 2-3x price, the price of the ticket is a relatively small portion of the total cost of attending.

People without money get screwed out of entertainment? Boo Hoo. How about Healthcare or housing? You know, actual essential things.

Thinking that being a hardcore fan makes you somehow more deserving to attend is entitled child mentality, plain and simple. It's one of those concepts that make you feel good, but in reality no one cares, and certainly not going to cry over 1 fan attending over another.

If you can't afford the auction price of the ticket, sit at home and watch their live youtube videos. It's arguably not even much worse and you won't have to deal with the smelly crowds.

You're logically and economically correct, but people have a visceral negative emotional reaction to arbitrageurs since they didn't do anything to "earn" their profits. The only way to eliminate scalping would be for the original sellers to raise prices to match the clearing price (perhaps with auctions) but the optics on that are also bad since artists don't like to seem too greedy.

>but people have a visceral negative reaction to arbitrageurs since they didn't do anything to "earn" their profits

I don't think there's anything wrong with getting money that you didn't earn (so long as you're not exploiting people, as the bourgeoisie do); I do think there is something ethically questionable about forcing (I use the word 'forcing' to refer to the idea that within the confines of show-going, it is the only available choice) people to pay 3x more for something out of greed.

But.. they are exploiting people. That's literally what they are doing; expecting people to purchase these tickets at a higher cost for the simple reason that supply is short.

that's every market you purchase anything in

Artificially short by scalpers driving up demand.

Scalpers neither increase nor reduce total demand. Scalpers are not going to the event themselves.

the supply is short is the reason the price is high. that's not really exploitation of the people buying. they get what they paid for at the price that they were willing to pay.

there's a structural issue here, which is that the world isn't a very fair place and it sucks to be poor. this ticket market situation is not really an example of exploitation though. nobody is being coerced into buying something they don't want, or not getting what they pay for.

"people have a visceral negative reaction to arbitrageurs"

I think you're right that people have a visceral reaction to people they perceive as arbitrageurs

-------------------

like arbitrageurs in nearly every domain where they exist, they "earn" their profits by providing liquidity and handling risk

I don't think the model where ticket sellers are leaving profits on the table for fear of seeming greedy makes much sense

the model that makes better sense (to me at least) is that they want to set a price where the tickets clear earlier than 5 minutes before the show

(also, like all endeavors where you're setting a price, its hard to precisely predict demand)

the difficulty setting a price, and the preference for early sellout, create an opportunity for scalpers who are willing to buy the risk that they won't be able to selling the tickets for more than they bought them for

---------- ---------- ----------

also venues make money off non ticket revenues, so they price the tickets at price that maximizes the profits from ticket revenue + plus other revenue streams (concession, parking, etc),

so they will price it lower than scalpers, who don't have access to non ticket revenue, so they're pricing to maximize just ticket revenue

Look, if the box office said "we're auctioning off all the tickets, there is no set price" then I would be inclined to agree with you. But that's not what happens here. Scalping with bots is someone profiting off of the work of others. It's borderline theft. Moreover, it's already illegal in many states and further widens the chasm between the rich and the poor. I don't understand why you would defend such practice.

What cheeses me off is that the artists aren't making that money. Under an auction system more of the money would go into artists' pockets rather than scalpers - which is surely something hardcore fans would want.

That is not correct. Some artists sign deals guaranteeing them more than 100% of total face value. Others put tickets on the secondary markets themselves.

If any system does not funnel a huge amount of cash to the artists it would be changed immediately.

I'm merely saying that scalping wouldn't happen if tickets were priced closer to their actual value - aka what people are willing to pay.

Scalpers (and all the technology behind them) would not exist, or exist in very limited capacity if people were not willing to pay whatever the amount is.

> we're auctioning off all the tickets, there is no set price

That includes an insane amount of overhead, on both the part of the venue and the end user. Perhaps one of you programmers can come up with some machine learning algo to more correctly price tickets in the first place so artists get more money? Isn't that the end goal?

>Even at 2-3x price, the price of the ticket is a relatively small portion of the total cost of attending.

This is irrelevant. The fact is that it's 2-3x the cost because someone decided to be greedy and purchase lots of tickets that people would have bought. Imagine if you go to buy a bar of chocolate, and it's $1 as it usually is. Then one day you've found out that the only way to buy it is from the weird guy outside the shop, who has purchased the entire supply of chocolate and is selling them at $3. I would be upset about it. The actual original price it irrelevant, no matter how cheap it is to get it. The fact is that you're making someone pay 3x as much which is frankly horrible behaviour.

>People without money get screwed out of entertainment? Boo Hoo. How about Healthcare or housing? You know, actual essential things.

So you think it's okay for someone to do something bad, so long as it's trivial and not related to one's bare survival?

>Thinking that being a hardcore fan makes you somehow more deserving to attend is entitled child mentality, plain and simple.

I agree. But being so greedy as to purchase thousands of tickets in order to sell them at a significant markup later on is also childishly greedy, moreso in fact than the child who believes he deserves to see something he likes without having to pay 3x the cost beacuse some guy has decided to be greedy.

>If you can't afford the auction price of the ticket, sit at home and watch their live youtube videos.

That's totally fine. But being denied a service because of someone else's greed is extremely ethically and morally questionable in my opinion.

I'm a social anarchist. I don't have any problem if you decide to sell something at whatever price you want. But I maintain that it's abhorrent, greedy, disgusting, horrible, childish and at the least questionable for one to force this practice upon others who would have no problem affording the original product. Whether it's a ticket or a chocolate bar or food or even hospital or housing, it's the same principle, and I fail to see why it does not apply to those but it does apply to tickets.

>It's arguably not even much worse and you won't have to deal with the smelly crowds.

Don't try and undersell something that people would have otherwise wanted in order to make yourself feel better about supporting abhorrent and greedy behaviour please.

> So you think it's okay for someone to do something bad, so long as it's trivial and not related to one's bare survival?

If buying low and selling high is so bad that it should be outlawed, you can kiss everything you know goodbye.

This is irrelevant. The fact is that it's 2-3x the cost because someone decided to be greedy and purchase lots of tickets that people would have bought.

If people stopped buying scalped tickets, scalpers would be out of business.

We're not talking about a product that's of life and death scale importance. I can understand people being upset by price gouging on water and food.

I have, personally, sworn off doing business with Cheaper Than Dirt because of how they price gouged customers after Sandy Hook but nothing they did should be illegal.

If you skip this year's Kenny Chesney concert and the scalpers take a bath, it'll be easier and cheaper to attend next year.

>If people stopped buying scalped tickets, scalpers would be out of business.

That's true, but it doesn't mean that the industry is ethical.

>We're not talking about a product that's of life and death scale importance.

Irrelevant. Why does the vitality of the product matter? Somebody wants it; I can't see why gouging is only an issue when it's basic utilities. You probably have to get into a whole issue on what qualifies as 'need'.

>price gouged customers after Sandy Hook but nothing they did should be illegal.

Sure.

That's true, but it doesn't mean that the industry is ethical.

It doesn't mean that it's unethical either.

Irrelevant. Why does the vitality of the product matter?

We have the word "Luxury" for a reason. Items that are not vital for survival are optional. You don't have to face death as the alternative to acquisition of such items.

Somebody wants it

Irrelevant. The person who has it gets to decide what they want in order to part with it. No matter how much I may want a 72 Camaro, unless I am able and willing to give up enough money, I'll never get one.

From what I can see, absurdly inflated scalping prices is only an issue for a handful of bands out there: the bands whose fanbase has outstripped the capacity of where they are booked at. This is only a small percentage of bands out there. Your chocolate comparison in other words only works if the weird guy bought up only the most popular brand.

The generally crappy experience of Ticketmaster / Livenation and the high ticket prices of certain artists certainly have deterred me from supporting this "greed" very much. Instead, I've tended over the years to go for local scale up to medium-high sized concert events. I've rarely run into these sort of scalper issues as a result.

Judging by the continued high prices of certain tickets, I'm atypical. But this isn't life or death type items like food or healthcare, where capitalism runs into morality issues. This is music. If you aren't happy about certain portions of the music industry, the best way to express that is to not support this side with your dollars -- not as an absolute rule perhaps, but definitely as a factor in your decision.

Because I'm probably not the only one deterred by very high prices and the general crappy experience of Ticketmaster, I do believe that these things do indeed damage the brands of certain artists. If artists want to implement solutions to help those that can't afford market rates (like the many-times mentioned lotteries) to broaden appeal, that's fine. In fact, I'd suggest that would be a good idea: brands are often more important than chasing the short-term dollar. Creating fan clubs, and have ticket clubs allocated by lottery (perhaps adding a bonus of rewarding loyalty, such as increasing your lottery chances based on your membership length): that's probably good for your image, and thus your business.

But IMHO this type of initiative has to be artist driven.

> The fact is that it's 2-3x the cost because someone decided to be greedy and purchase lots of tickets that people would have bought. Imagine if you go to buy a bar of chocolate, and it's $1 as it usually is. Then one day you've found out that the only way to buy it is from the weird guy outside the shop, who has purchased the entire supply of chocolate and is selling them at $3. I would be upset about it. The actual original price it irrelevant, no matter how cheap it is to get it. The fact is that you're making someone pay 3x as much which is frankly horrible behaviour

You do realize the price is not set by the scalpers, but by the market? This is basic market economics (there is also time-decay so perhaps not completely basic but still). The supply is small, and the demand high. The price will move to a level where all tickets are sold. The scalpers certainly don't want to have any tickets leftover because then they become worthless.

People incorrectly think that if scalpers were removed they would be able to attend all the events they want to attend at some very low price. This is flat out wrong.

>You do realize the price is not set by the scalpers, but by the market?

Yes. I never claimed it doesn't make economical sense.

I was trying to make the point that people are engaging in behaviour I regard as abhorrent. The scalpers are doing it, even if they don't set the prices. Sweatshops also make economic sense.

> People without money get screwed out of entertainment? Boo Hoo. How about Healthcare or housing? You know, actual essential things.

These things aren't mutually exclusive. I think most people would think it is unfair if only people who can pay 2-4x the ticket price are able to see an event. Hell scalping for more than the original price isn't even legal some places.

They aren't exclusive, but one is essential and the other is not.

Especially in the age of internet, no one owes you a very specific particular type of entertainment.

I would argue, however, that the social contract does owe you at least some modicum of healthcare and housing assistance, which is why I see absolutely no problem with scalping, but for-profit healthcare abhorrent.

> I think most people would think it is unfair if only people who can pay 2-4x the ticket price are able to see an event.

It is still possible to get tickets by buying them as early as you possibly can. You trade your time for money that you would have otherwise paid the scalper.

> It is still possible to get tickets by buying them as early as you possibly can. You trade your time for money that you would have otherwise paid the scalper.

That's what this article is about though, that it isn't possible to compete when scalpers have bots, no matter how early you try to buy them.

All of the convoluted reasons why scalping must be stomped out have never made sense to me.

If people would let the market handle it, things would sort themselves out naturally.

If scalpers have to spend more money buying tickets than they can make by selling them, they'll stop buying so many tickets.

Also, maybe venues should have some method of selling unredeemed tickets at the door. For example, if a ticked hasn't been redeemed by one hour after the start of the show, the venue gets to re-sell that space to someone who is there in person with cash in hand. Scalper spent $50 on the ticket that s/he couldn't sell so an hour after the show, the venue can re-sell that space for $30 cash. I'm sure I have overlooked something here but I'm just brainstorming.

Instead of trying to fight technological battles that you're not going to win, revamp the ecosystem.

Let the market handle it? You mean sell to those willing to pay the most? If you are a performer, sometimes you want to sell to the biggest fans. What's the market mechanism for that?

Yes. That's how things have always been. As long as we live in a capitalist society, that's how they'll always be. The market value of a thing is not just what someone tries to sell it for, it's what someone else is willing to pay for it.

There have long been mechanisms by which the most dedicated fans have access to some of the tickets for less than market rates. Call it old fashioned if you like but fan clubs or the 21st century analog.

FB Groups, mailing lists, private websites, actual in person box-office ticket sales, whatever...

14 months ago, I got to meet my all time favorite musician. I purchased my ticket at a beauty parlor and I talked to the concert promoter on the telephone to ask him if he could help me make it happen.

Right. The market doesn't work very well except for the very simple scenario of maximizing revenue.

I think it works wonderfully well. I get to see popular events if I'm willing to pay, and I've seen less popular events for less than face value of the ticket.

When I lived near a pro-sports team, my wife and I would go down on Sundays and play good cop/bad cop at kick-off time, and pit the scalpers against each other trying to get rid of their final tickets. Rarely did we ever pay above face value.

That's precisely the opposite of both my point and observable reality.

Why doesn't every apartment rent for $1500 per month?

Because people aren't willing to pay that for every apartment. Because of this, every real estate market has a ceiling with regards to how much can be charged for rent.

If Lil Bow Wow goes on tour at the same venues as Eminem, will the tickets cost the same? No because people are willing to pay more for Eminem tickets. If someone tries to charge as much money to see Lil Bow Wow as they do for Eminem, a lot of tickets would go unsold. They would lose money and next time, they won't make the same mistake.

That's the market at work.

We both keep saying the same thing. You're right - that's the market at work and I agree with you on that. The market is doing the only thing it can do which isn't necessarily what the artist wants. It's failing the artist.

The article talks about U2. Apparently they are so wealthy now that when they put on a show they want to maximize for something other than money. Most performers will tell you that a great show is half performer and half audience. Shouldn't they try to get tickets to their biggest fans that will help them put on the best show even if those super fans don't have the deepest pockets?

When your only tool is a hammer, everything starts to look like a nail. Maybe market mechanisms aren't good enough when dealing with intangible quantities.

> If you are a performer, sometimes you want to sell to the biggest fans. What's the market mechanism for that?

This is what I don't get about some of the arguments here. In the freest markets, doesn't that mean I have the right refuse service to anyone? Doesn't that mean I have every right to do everything in my power to avoid selling to scalpers? If that artists wanted to do an auction type system, the arguments being made would make sense, but that isn't what most artists are trying to do.

I just read another story here about the letter Bill and Melinda Gates wrote to Warren Buffet to tell him what they are doing with his money. Market mechanisms are part of it (like giving vaccine makers purchasing guarantees so they will work at getting the cost of vaccines down) but there aren't good market mechanisms for a lot of the foundation's philanthropic work. They aren't maximizing for profit, their goal is to maximize other goals.

I think you overestimate the libertarian leanings of the site.

Not everybody that sells tickets has as their goal maximizing revenue. For example, lots of bands work very hard to put on shows that are affordable for their fans. Scalpers taking advantage of the situation is an example of this-is-why-we-can't-have-nice-things.

And I agree that access to affordable shows isn't as important as housing or healthcare, but I think you are very much underestimating the value and importance of the arts in many peoples' lives.

>"For example, lots of bands work very hard to put on shows that are affordable for their fans."

I am not doubting that but there's enough blame to go around on ticket prices. Bands no longer make money selling records. The model of the touring business back when the public bought records was that the tours were used to sell records and except for a small handful of acts artists mostly didn't make money from touring. A concert would generate sales of records in that market, it was a tool to sell records. Now that there is no longer money in records the bands themselves have increased ticket prices extortionately so in many acts cases because this their source of income now and not album sales.

> For example, lots of bands work very hard to put on shows that are affordable for their fans. Scalpers taking advantage of the situation is an example of this-is-why-we-can't-have-nice-things.

Don't believe their hype. If bands wanted to make shows cheaper they only have to do more shows.

>"If bands wanted to make shows cheaper they only have to do more shows."

That's often not feasible. Booking dates depends on a venues schedule. Its often not possible to book a venue for 2 or even 3 nights in a row, especially in primary markets.

Plus artists would probably like to put on better shows (of which the audience is a key part) rather than more shows. Quality over quantity.

Some people are libertarian, some are not. They argue. It's not complicated, it's the free market of ideas.

> The government's case hinged mostly on whether Wiseguy had "circumvented" Ticketmaster's system.

While I hate scalpers, I have to ask: why is this illegal? Is using a screen reader "circumventing the system" if I get rid of all font and graphics? Is using an adblocker "circumventing the system" ?

The site might (and hopefully does) have an explicit TOS/EULA prohibiting scraping for the purpose of scalping.

I don't think that necessarily make it's illegal to do it anyway.

The law is intentionally vague on what "circumventing" means. That's so that:

(a) It can catch previously unforeseen schemes

(b) It can be selectively enforced

The answer is (c) IMHO.

Ticketmaster is actually a fairly unusual market in that it discriminates based on speed, which is pretty unusual in our market economy where things are usually discriminated based on price. As long as this structural difference exists there will always be an incentive to arbitrage the market, whether those arbitrageurs are one person or a thousand, bots or Turks or employees. Everyone seems to get morally outraged about this, but I've yet to see anyone suggest an alternative system that solves the underlying issue of incentives. Most bans and limits are ineffective because they are at odds with the incentives of Ticketmaster. Do you make secondary markets illegal? What if someone can't go? Just balancing the incentives is a tricky issue to say nothing of finding the optimal balance of fair.

The article states:

"Tickets are incorrectly priced, which incentivizes scalping If there's a reliably profitable secondary market for tickets, that means tickets are being priced too inexpensively by the artist."

This is a refrain that is put forth time and time again but people who's business is reselling tickets in the secondary market. The blame is somehow shifted to the artists.

Touring and tour routing are incredibly difficult logistical operations. A touring act has so many variables that they have to consider when they put tickets on sale - availability of venues for dates that coincide with their tour routing, release date of an album their supporting, time of year in which their touring, gauging the current demand, possible competing shows the same night with similar a fan base. The local promoters need lead time to promote the show.

If it was a single show in single place then yes they could exploit dynamic pricing and maximize the price of each individual ticket, much like an airline does. This is not the reality though and as such there may end up being some inefficiencies created inadvertently. This however is not same thing as what is stated here - "the artists are the ones that created this by mis-pricing their tickets." Pricing tickets is a compromise between all of those things I mentioned above. I don't think that necessarily means its someone else's for the taking however.

venues need to just formalize the unofficial auction + lottery system that already exists in various secondary markets.

some tickets are sold via auction, others are offered at a set price to those who win a lottery.

The only difference is that venues + artists can benefit rather than middlemen.

I think VR has the potential to help alleviate some of the market pressures by offering an experience with nearly limitless supply.

Big artists, that have gigs where tickets cost the best part of $100 (I'm UK based and I'm converting what we'd pay for big name artists gigs from GBP to USD) are saying they have 10X the demand of people wanting to see them than the stadiums can take....

...wow that sounds like an awesome problem to solve! Like play 10 dates, or if that is too tiring, maybe they could let a lot of people watch live on VR headsets for a much cheaper rate (like $10 or something) - I am always hearing the global number of Gear VR sales is large and getting larger and larger.

I understand this problem is different to normal computer problems, but I'm used to it being the case that you don't need to worry too much about scalability - because if you are in the position that you do, you should have the resources to be able to find a nice way to solve it!

Maybe some sort of bitcoin/blockchain + verifiable ID, so on the door you can prove:

1. You are the person who paid the ticket 2. The price you paid for the ticket, is the price on the ticket

I really don't see the point of a live concert VR. The experience will be completely different. Releasing a well recorded and edited version once per tour makes much more sense to me.

The ticket problem needs to be solved but it won't when you have the biggest ticket sellers (Ticketmaster) owning marketplaces for second-hand tickets. I recently read one of these companies was buying tickets and then putting them on the secondary marketplace themselves at a huge markup.

As for booking extra shows - I don't know why this doesn't happen. Maybe they don't have the data? Much better for an artists brand if they sell out 2 nights than have 3 nights with none of them sold out.

NB: The biggest artists (selling out places like the O2 Arena in London for multiple nights) rarely charge over $60/£50 for general admission. The only people I see charging $100 are well established older acts (Fleetwood Mac, Tom Petty, etc.).

It isn't that I don't appreciate your point about a live VR concert being different, and right now if I simply put on a VR headset and was there (without any other tweaks at all) there would be a limit to how 'cool' it would be. That said, I'm a Radiohead fan, if they offered an option to go to a rare gig to see them play, in VR (either VR or nothing) I would certainly consider it. If you then said that VR technology is going to continue to improve, and I'll be able to sit there with my friends, watching the band, taking virtual photographcs of the band, optionally discussing the show with others, etc. maybe it starts to actually start getting quite interesting.

As others have pointed out here, a lottery system with ID can help beat this. Pearl Jam's fan club ticket sales require you to choose ahead of time which concerts you want to go to (max 2 tickets per show) and then on lottery day, you're informed if you won or not and your card is charged. Although a bit opaque, it does make it harder to game the system.

two ticket max is a bummer.. are there specific seats for PJ's concerts? Would suck if you and 4 other friends wanted to go, just curious

Yeah the fan club sections are always around the stage so if four of you go, although you're not guaranteed to be in the same row/section, you're close-ish.

Couldn't ticketmaster put a minimum time limit on each ticket sale? So a bot tries to buy a ticket and ticketmaster says sorry you completed the transaction too fast, you are probably a bot. Pick a min time consistent with how long it typically takes a person. This would level the playing field between bots and humans.

I find it hard to believe that in the age of ubiquitous and relatively secure smartphones that we can't write a ticket auction app. So I have assume that there are powerful stakeholders whose interests would not be served.

>"When the sale dropped, we took 496 in New York, 492 in Boston, 496 in LA," Lowson, the former CEO of Wiseguy Tickets, told me in one of our many phone calls over the course of the last six months. "They apologized on the Grammys because of us, and then they had a second round of sales to make up for it. We took all the good tickets in that second round, too."

He seems proud of this, this person has zero morals. He's scum.

>"We pulled so many tickets that really we had to choose which seats we didn't want," he said."

This is just unbridled greed. It wasn't enough to do this for handful of tickets, it had to be done for all of them.

I'm always suspicious of people that want to do the right thing only once their own morally questionable practices have run out of steam. I don't think what he's doing now is motivated by any sense of concern or common good.

he was scalping concert tickets, not price gouging on food or medicine here. a little perspective would help. this is leisure activities we're talking about.

Wait, because its concert tickets its less of a violation? So price gouging and depriving people of a good or service is OK as long as its not life essential? Where does that line stop?

Tell that to someone who was shut out of seeing their favorite band because 492 of the total 496 tickets that were put on sale went to this guy.

Is that the little perspective that would help?

> Wait, because its concert tickets its less of a violation?

yes, exactly that. what's so hard to understand? price gouging on essentials is clearly a worse thing to do than price gouging on leisure items.

So by your logic it is OK because there are worse things?

Do you use that metric in all aspects of your judgement?

If so you must be able rationalize a lot of questionable behavior because you can always think of something 'worse" that you "could" be doing instead.

What's so hard to understand is that your logic is pretty twisted.

it's really hard for me to understand why you're talking to me like this, as if I personally did something wrong.

forgive me for being relatively unconcerned that sometimes concert tickets cost a lot.

my judgment absolutely does take into account the pragmatic concerns regarding harm. some bad things are less bad than other bad things. just like some good things are more good than other good things. do I need to explain that? I'm quite astonished that you're challenging me on that point.

murder is worse than stealing chewing gum. yes? price gouging on medicine is worse than price gouging on concert tickets. yes?

not every injustice in the world is really worth reacting to with such passion.

>"it's really hard for me to understand why you're talking to me like this, as if I personally did something wrong."

You want to pass judgement on people and then act all sensitive when someone responds to you? There is nothing disrespectful in anything I wrote. It's called a discussion.

>"not every injustice in the world is really worth reacting to with such passion."

Again, here is another judgement by you that music is not such an important thing. People are extremely passionate about music and their favorite artists. Music and more specifically a live show is a very emotional experience for fans. There are million of people in the world for whom music and their favorites artists are some of their most treasured things. Just because its not for you does not mean its not for someone else.

this isn't a fruitful discussion. have a nice day :)

I'm still trying to understand why they don't just auction tickets.

Because it is about being equitable to middle and lower-income fans. Otherwise, only the richest fans would outbid everyone else and the artists don't want to alienate a large majority of their fan base by making their shows unavailable to only but the folks with the means.

> Because it is about being equitable to middle and lower-income fans.

It's about the perception of being equitable. As a comment mentions above, many artists/venues work directly with scalpers.

So start a mailing list when you're a small band. Email your oldest fans a promo code with priority booking and/or first tranche auction option. Give people with an academic email address early options. Give people who like you on social media early options. Include a promo code in sales of online merchandise for future gigs. There are lots of potential ways to do it, while undermining the scalpers.

Also gigs seem pretty unaffordable already.

as the article mentions, those tactics you described actually helped the scalpers more than an average person.

Do you have any evidence for your claim of what the article mentions?

How would this work? Would you have to enter a number an wait till let's say 24 hours before the gig? Could work and could minimize the problem. The buyer wouldn't know til x hours before if he hand won. But the scalpers would know: " were payed average of x for similar gigs." So they knew how much to bet and still scrape of most of the tickets. And the sell them at a high rate as last minute tickets for a sold out gig and you could be sure to get a ticket.

Probably because of bad PR. The relation between a band and it's fan is very personal. The fans would feel betrayed if the band was auctioning tickets.

I've heard of some venues using a hometeam scalping operation to get around this. They sell the tickets knowing that their scalpers will bot them. Then the venue gets a cut of the proceeds. Could be an urban legend however.

What you have just described is literally Ticketmaster's modern business model. Ticketmaster scalps the tickets and pays a kickback to the venue and/or artist. Ticketmaster takes the heat so the the venue and artist don't have to.

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