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Comment by sleepytimetea | Hacker News Reader

I am wondering what is the business case for StubHub to do this ?

Flipping for a profit ? Making StubHub look successful and be more active than it really is ?

They could be engaging in a form of market making, where they buy tickets that are near certain to be sold so that sellers feel good about listing on their site. I don't know about their customers' behavior, but I imagine many buyers buy at the last moment, and sellers feel anxious wondering if they will be able to sell, making them look for other platforms.

This. Plus different sellers have different motivations and different pricing strategies. Stubhub based on their volume has a sense of where the market is, and if they see a seller underpricing versus what Stubhub thinks the ticket will sell for, they may swoop in and try to capture some of the upside.

There's no such thing as a ticker feed for the resale markets -- the market is characterized by "imperfect information". Artists and venues making it hard to buy and sell basically widens the spread for the secondaries to play with.

I never thought about it, but I suppose a concert ticket is similar to a futures contract. I'm sure some fintech whiz-kids figured that out years ago and have been at work figuring out how to make money on yet another market.

In theory someone like stub hub could operate as a super scalper by buying all tickets and creating scarcity. Alternately, they are simply trying to create liquidity in the ticket market by buying tickets today to resell tomorrow.

Because StubHub et al have done so much to drive up ticket prices, some bands/venues/etc. are pushing back by blocking ticket brokers and only allowing "fan-to-fan" ticket sales. StubHub may be inserting itself as a middleman/escrow agent to allow brokers to sell without necessarily showing up as ticket brokers.

You buy up all available inventory and raise the prices, same thing that real estate companies were doing during the pandemic. Every home in my neighborhood that went up for sale from 2020 to late 2022 was snatched up in less than a week by a corporation.

That's awful, but also rather high-risk. Imagine if they did that and then manipulated the regulatory environment and/or the construction industry to limit new supply.... Now THAT would be evil.

Sure, it's a footgun waiting to go off. Look at what happened to Zillow, which went from a real estate app to a homebuyer.

The most forgiving explanation is they are acting as a middle man, to avoid telling sellers who the customers really are.

But why would StubHub avoid admitting they are doing that? SeatGeek just has you transfer the tickets to an email at their own domain (at least when you use the free returns feature).

Only thing I can think is they want to make it hard for the ticket seller to block them, but again SeatGeek doesn't seem concerned.

Stubhub collects a fee every time a ticket changes hands. It's in their interest to buy the tickets off people and then resell them themselves, since they will collect two fees in that case. Couple that with the fact that they're in a unique position to measure demand and model future pricing, they can effectively double dip with little risk.

Further, the shell companies could be something Stubhub is doing to derisk the arbitrage portion of the transaction to isolate losses associated with inability to sell the tickets for a profit to the shell company rather than to Stubhub.

probably sourcing replacement for bad tickets.

venues may cancel tickets or require photo ID if they suspect they were bought for resale.

Why isn't "you're not allowed to resell tickets except through us" illegal for being anticompetitive?

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