Artists don’t want to look like they gouge their fans.
Promoters take a cut and need to hit volume milestones.
Fans want access, and are willing to pay extra.
[0] - http://freakonomics.com/podcast/live-event-ticket-market-scr...
I feel like I've always gotten a good deal on the secondary market. Every so often I am in Japan in late August and like to attend a 3 day anime song concert. The tickets are sold way in advance, and are $60 (ish) for a randomly selected seat in Saitama Super Arena. This means your $60 may get you a front row seat or one on the upper balcony behind a pillar, you don't know. And you have to physically buy the thing from a convenience store in Japan 6 months in advance. So the primary market is just bad. I end up just buying tickets on Yahoo Auctions and for $200 I get a front row seat. Would I have been just as happy to give that $200 directly to the people running the event? Yup! But they don't let me, so they lose out on $240. Multiply that by thousands of tickets sold, and you wonder whether or not any of these people ever attended business school.
Similarly, you can get reverse gouged on unpopular events. My brothers are big basketball fans. Whenever they visit New York, we go see the Nets play. The Nets are historically terrible and never fill up the arena, but apparently they sell a lot of tickets for corporate events. These tickets end up on the secondary market for reasonable prices, and that's what I buy. The list price can be something like $1000 and yet we buy them for $100. (I also enjoy the banter with the coworkers of the people that sold us their tickets. Every time, it's "I can't believe so-and-so sold their tickets!" But people are drinking and you can't take yourself too seriously and be a Nets fan, so it's all in good fun.)
Anyway, kind of wandered off topic... but the only way to make demand meet supply is to gouge people, so that supply falls to exactly meet demand. The artist deserves the money, not middlemen.
We have an amazing system for this - a market. Why don't we just accept that price is based on supply and demand and let the market (secondary markets included) determine the price freely.
If artists really care, they would do more than lip service (some do!). When they don't, the message is clear. They might care, but they care about money more, because let's be clear, brokers buying out a venue within a day that might take a few months to sell out is good for the artist, promoter and venue. They get to offload risk to a broker, for the cost of possibly some more money in the long run, and they get all their money up front and can do what they want with it for that time.
"Correct for your show" is what I'm talking about. It's realative based on what your goals are. If you want to make sure fans get cheap tickets, you make sure supply isn't too far under demand. That can be adding a date, or playing a larger venue. That's risky, because if you misjudge demand, you might actually lose money (based on venue minimum costs).
So, artists and promoters like to ensure they are sold out whenever possible. To achieve this, they play it conservative, but that leaves value on the table. Brokers capitalize on this. If the artist or promoter was more willing to increase supply and take that risk, fans would benefit. Usually, they aren't. Sometimes, they are. Kid Rock and Garth Brooks are notable here. Garth Brookes will play a venue three days in a row, twice a day. Kid Rock might just book 6-7 days.
That's not a music culture I'd want to be part of.
I assume they pay people that are good at this to do it for them.
> they should only play large venues (which Live Nation controls)
Not all of them. Most, but not all.
> And if they were mainly concerned about money (which some are) then they'd only play the largest cities every year.
For the most part, I think you just described the concert industry as it currently exists. Usually, the only thing indicating whether an artist will book theaters, arenas or stadiums is how likely they are to sell it out. Only the biggest artists can do stadium tours.
How would you design a system to do this? All of them have a ton of flaws, but I have yet to hear a system that can beat a market.
They do have some choices, at least when venues will cooperate and the government doesn't interfere on behalf of businesses with competing incentives. If the performer wants to make sure every fan has the same chance of purchasing a ticket at the list price, then checking ID when picking up tickets is probably the easiest policy. This has downsides, of course, like preventing sales if someone gets sick or has last-minute scheduling conflicts.
Perhaps a better idea is to have a ticket lottery with measures to prevent bots from flooding it and nabbing most of the tickets for resale. Ideally, each human who is interested (whether they want to attend the event or resell the ticket) would have the same chance of being able to purchase a ticket. I believe sites like Ticketmaster make some attempt at implementing this, but I have no idea how effective it is. It's probably effectively impossible to detect bots.
The real strategy is to just change your name to "John Smith" to maximize the probability that you can sell your ticket to someone, at least until they start checking your birthdate and TSA Known Traveller Number.