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Comment by ryandrake | Hacker News Reader

> "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.

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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_

> "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.

>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.

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.

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.

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.

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