Comment by derefr | Hacker News Reader

Comment by derefr | Hacker News Reader

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> So if promoters try a more market based strategy like the one you mention it will probably cause a backlash from fans for charging $500 for a ticket. Unlike the promoters, scalpers have no perceived connection to the artists, so they (or Ticketmaster) can take the public outrage in exchange for profits without risking future ticket sales.

Yeah, which is why the promoter should just present itself as a scalper, "selling out" 100% of its tickets to a subsidiary, which then does a reverse auction like in the GP's comment. Fans won't care, because nothing has really changed from their perspective; the promoter will make more money (that the artist can demand be passed on to them); actual scalpers, economic parasites that they are, will make less money; the market will clear more efficiently; economists will be satisfied. Everyone wins.

Everyone except for—as can be seen in the OP article—non-economically-versed journalists, and those that they manage to incense with their rhetoric.

> actual scalpers, economic parasites that they are

Scalpers/brokers aren't economic parasites, they provide a function to artists and promoters by offloading risk, and they also provide liquidity to fans.

If if it comes down to selling out 50% of a venue immediately and the other 50% over the next 2-3 months, or selling out 100% of a venue in one day, I imagine most promoters and artists would like that money now so they can utilize it. Brokers trade use of money over time for risk. Sometimes they make money, sometimes they lose money because it's overbought, they misjudged the market, or more supply was provided (a date added at that location). For example, see here[1], where resale tickets are under the cost of primary market tickets, $36.50 instead of $39.50, and that's before Ticketmaster/Stubhub takes 5-10% of the sale price from the seller. On Stubhub[2], the same tickets are going for $27.

1: https://concerts1.livenation.com/event/000054C6CF1B8160

2: https://www.stubhub.com/the-damned-tickets-the-damned-new-yo...

> If if it comes down to selling out 50% of a venue immediately and the other 50% over the next 2-3 months, or selling out 100% of a venue in one day, I imagine most promoters and artists would like that money now so they can utilize it.

If you have revenue figures to indicate that it's pretty much guaranteed you'll sell out your stock of something eventually, and you want short-term liquidity, you can just issue commercial-paper securities, and people will buy them.

Or, more likely in the case of many smaller privately-held venues, get a loan from a bank secured by the future ticket sales.

Sure, if you don't have people clamoring to buy you tickets immediately anyway that will provide you that money at no interest, that would make sense. In what way is that system advantageous to the current one, given the other incentives that exist to not raise price (public relations, mostly)? Also, given that I suspect brokers are worse at getting this right, since they don't get to see all the data, and you can make quite a lot from brokers on events that undersell...

> provide liquidity to fans

Why is liquidity important to fans?

You can buy a ticket knowing that if something comes up you will get your money back. You can decide to go to an event last minute and tickets will be available.

But they would be available anyway if the scalpers hadn't bought them all up. And if legitimate fans had bought all the tickets (sold out early), you wouldn't be getting a ticket either way, right?

I'm a legitimate fan and willing to pay a fair price for a ticket, but due to my job I usually can't buy the moment the ticket is released. So if it weren't for the "scalpers" I'd never get to see a show.

Because it provides an accurate value indication. Whether brokers or fans are reselling, it's going to happen. I don't imagine.moat fans are going to be keen on making sure their inventory is priced multiple times a day, much less multiple times an hour.

This also helps fans that decide they don't want to (or can't for some reason) go. They get a good indication of what their tickets are worth.

That said, i was also using liquidity as a stand in for increased availability. The fact that the market is liquid allows people a fair level of confidence that in the worst case they can recoup the cost of their tickets (give or take some percent) if they don't go.

Really, how is this any different than investing in an IPO? Those are mispriced all the time too.

> by offloading risk

Offload it straight onto the consumer. If I pay 2x the TM price from a scalper and the event is cancelled and TM offers "full refunds " I'm out the difference.

> I'm out the difference.

No, you usually aren't. Both Stubhub[1] and Ticketmaster (through their TM+[2] resale platform) offer full refunds. If the reseller has already been paid, the amount is either deducted from the next payment to the reseller for sales, or taken out of the linked bank account or credit card. If the reseller hasn't been paid yet (they generally get paid on delivery, not on sale), they just don't get paid.

Even if for some reason the exchanges can't recoup the refund cost, they'll just eat it. Exchanges live and die by their reputations, which is also why they punish resellers heavily for delivery problems or invalid tickets.

1: https://www.stubhub.com/promise/

2: https://www.ticketmaster.com/verified

He wrote "from a scalper", not a retail resale marketplace.

Who do you think is selling on the resale marketplaces? The nice name is broker, but multiple people here, and the article these comments are on, use the term scalper. The vast majority of inventory resold by people that purchased with the intent to resell is sold on Stubhub, TM+, or Vivid Seats. The majority of inventory on those platforms is from brokers. Who bothers buying direct from an individual anymore?

The article in question is actually about scalpers (brokers) using Ticketmaster's resale platform (TM+) and Point of Sale for managing inventory (Tradedesk).

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