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Comment by mattnewton | Hacker News Reader

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.

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> 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.

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"...

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)

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