Why do the organizations putting on events like these leave so much money on the table? Why don't they just charge the market-clearing price themselves, leaving no room for scalpers to make any profit?
It happens in football (soccer for my American friends) for clubs like Man Utd (and probably Man City now) where ticket prices are out of reach of working class fans. The visiting fans make a point of trying to out-sing the local support then insulting them for only being there because the club is winning trophies. All football fans know the song "where were you when you were shit!"
"Developers, developers, developers, developers. Developers, developers, developers, developers!!! Yes!!!"
But either way, both Dean's and Ballmer's examples are marketing stunts, a calculated performance - that's entirely different to rich people honestly letting loose at a concert.
Notice how he is at Clippers games.
Sure it is part stunt, part performance but it also personality.
If the ticket is cheap for me, I can go even if I don't like the band too much. And with very expensive tickets, many enthusiasts won't pay while rich non-enthusiasts are bigger part of audience.
Meanwhile, if tickets are cheaper but you have to jump hoops to get them, you get enthusiasts.
https://faroutmagazine.co.uk/reason-why-billy-joel-refuses-s...
These people were so eloquently described by Manchester United captain Roy Keane, as 'the prawn sandwich brigade'.
Citation needed.
Rich people are the main audience at all organized events of all kinds. Do you think you can take you and your kids to an NFL game if you're poor? The main attendees of Taylor swift? Women in late 20s - mid 30s working corporate jobs.
Also who is to say because they don't act ridiculous or obsessed they aren't 'real' fans. What is a real fan anyway? I hadn't heard there was a universal accepted definition.
I suspect, though, he doesn't sit quietly in the front row of his own concerts, so that's not really relevant to the point he makes.
“For our last number I’d like to ask your help. Would the people in the cheaper seats clap your hands? And the rest of you, if you’ll just rattle your jewellery.”
I can’t speak to the USA sports, I’m specifically talking about English football which is generally quite affordable for most working class people. I’ve bought tickets to games myself.
No, artists and producers aren't stupid, they get the most of the money from the Ticketmaster "fees". But when a fan sees a 70$ ticket, they'd may decide Bruce Springsteen (net worth 650$ million) isn't a man of the people. When they see a 40$ ticket and a 30$ ticket, fans just swear at Ticketmaster.
I'm confident in a few years we'll read about how scalping enterprises do profit sharing with artists and producers.
What matters is how much fees they charge and how much do they keep. Can't find it right now, but I remember an article claiming they rarely keep 50% of their fees.
Many “event platforms” allow you to add fees that cover the credit card percentage, but if they’re higher you just get to keep the extra.
The "face value" (base price) will usually be determined between the artist and promoter, the venue will apply a fairly generic fee on top, as will the ticketing provider.
How much of the face value goes to the artist will depend on their leverage in the contract with their promoter. This is usually best improved by the confidence that the venue will sell out, meaning artists with bigger audience and social media presence will usually get the best terms.
I don't have a paper or article I can link to as a source, but I have experience in the industry.
Unfortunately Ticketmaster is owned by LiveNation, and they are far and away the biggest promoter. They sign exclusive rights with large venues. My local 25,000 seat amphitheater has a deal with LiveNation. I can only get tickets to shows there through Ticketmaster.
Artists hate Ticketmaster too (some have sued them) but if you want to do an arena tour, good luck avoiding them. Artists use them because they don't have a choice. The number of large venues that don't use TM is growing, my local basketball arena uses SeatGeek.
The one concession TM makes is to their fan clubs. Artists get to sell tickets directly to a limited number of fans. If you love an artist, joining their fan club will probably save you the annual fee back in one show.
So mostly what GP said. This is not an accident, and everyone is in on it.
I think that's a critical difference, because if the current situation is actually a big reputation laundering scam by artists, there's not much we can do about it without regulation. If it's not, if in fact most artists are as unhappy about the situation as their fans, there's quite a lot they can do about it and should be encouraged to do so even if it makes getting a ticket significantly harder (e.g. showing ID for purchased tickets at the venue and only allowing 1:1 refunds, not resales of tickets).
Of course, if producers are receiving a significant portion of earnings on resales, some of that does "trickle down" to artists in the form of higher performing fees on the basis of anticipated resales. But that's a small fraction of added value for most artists, and it's coming at a level of indirection that means ticket sellers are incentivized to raise fees to their highest possible levels after artists get paid, because that's pure profit for them. I think it's entirely reasonable to believe that artists aren't happy about this payment structure, even if they do see slightly higher show income as a result, and want a range of fans to be able to attend their shows.
The only things I’m sure of are that A. consumers would benefit if there was an actual market and B. It is hard to imagine one happening without government intervention.
I think that's where the "reputation laundering" angle comes into play. With its unique position, Ticketmaster gives artists plausible deniability. "Nothing we can do about it", "evils of capitalism", "a monopolist captured the market, government doing nothing", etc. - say artists, for whom the image they project is a core part of their market value. With a properly functioning competitive market, those same artists would have to either get much less, or answer some inconvenient question about ticket pricing.
It’s a monopsony.
The only real winners are Ticketmaster live nation
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The standard tickets sold on Ticketmaster are owned by our clients (venues, sports teams or other event promoters) who determine the number of tickets to be sold and set the face value price.
...
Ticket fees (which can include a service fee, order processing fee and sometimes a delivery fee) are determined in collaboration with our clients. In exchange for the rights to sell their tickets, our clients typically share in a portion of the fees we collect.
...
Service Fee and Order Processing Fee
In almost all cases, Ticketmaster adds a service fee (also known as a convenience charge) to the face value price, or in the case of a resale ticket to the listing price, of each ticket. The service fee varies by event based on our agreement with each individual client.
In addition to the per ticket service fee, an order processing fee is typically charged. Unlike the service charge, which is added to each ticket, the processing fee is charged once for each order. The processing fee offsets the costs of ticket handling, shipping and support and as a result, the processing fee is generally not charged on in-person box office purchases. In some cases, Ticketmaster's order processing costs may be lower than the order processing fee. In those cases, Ticketmaster may earn a profit on the order processing fee.
In both cases, these fees are collected by Ticketmaster and typically shared with our clients.
That’s exactly what I said. They pay for exclusive ticket sales. They’re just defining “client” as who they pay and notice they do not say artist, which they surely would if they ever did.
1. The enjoyment of attendees can be partly dependent on the enthusiasm of other attendees. Consider the extremes: an audience entirely comprised of people who hardly know the artist, but can afford it Vs an audience comprised of only die-hard fans, irrespective of their ability to afford a ticket. The first has a flat atmosphere, the second, a special one.
2. A simple desire by the artist to make their show available to a cross-section of society (this could be viewed as altruistic, since most other products/services don't usually offer the same thing at a lower price just to help those who can't afford it).
A possible solution to problem 1: If the goal is to ensure that only die-hard fans get the tickets, why not use their spotify/apple music/other histories to work out who's really a fan of that artist? It should be trivial to get a very high degree of accuracy, and would be costly for scalpers to imitate (they'd need a subscription and to listen to random music years in advance).
Also the fact that it's assumed that everyone attending wants to sit in the audience and go crazy and MAKE SOME NOISE. It can and is annoying to many people.
One other thing is artist may want an active crowd for their own benefit ie they are making a video live recording for further sale or to post to youtube whatever. (Point is good for artist but not for many all of those attending).
As if everything in our society is 100% ok.
Higher ticket prices would lead to more diehard fans
> A simple desire by the artist to make their show available to a cross-section of society
But if scalping is a problem then making tickets cheap doesn’t accomplish this.
In total, this seems to point towards raising initial prices with negative consequence.
no? personal utility doesn't work that way in the real world... We have such drastic inequality that $200 is literally impossible for a huge fraction of the population wheras to some people its an afterthought to spend for a laugh. You can literally notice it in a venue when ticket prices are higher, the atmosphere is different, the clothing is different, the energy of the dancing, the singing
profile of somebody with money to spend: 40+, knowledge worker, drained of energy, has a lot of things going on in life
profile of the kind of fan that makes your show trendy: <30, sporadic employment, excess energy, impulsive, carefree
It also is up in the air of the market value is really what people are paying or if it’s being inflated by scalpers. Some people will pay it but I don’t think it’s an accurate view of what the price should be in that situation.
But we saw exactly this with the recent Lorcana release. Local game stores acted like scalpers charging scalper prices, it is hurting the perception of the game of what normal prices are.
Then use some form of a Dutch auction to sell them.
Those guys have something like 30 seconds max to hit their mark.
Now those are professional buyers. I think for your amateur crowd you would have to provide a bit more time. perhaps a week. just make it clear what is happening.
And that big clock, have you seen the big clock? if I ever made a dutch auction ticket site A big clock would feature predominantly in the ui. Unfortunately I don't think the flower auctions use the big clock anymore. which is a shame.
https://www.youtube.com/watch?v=uAdmzyKagvE (tom scott)
Scalpers would end up holding the bag if they did that. If no one is willing to pay $10k for a ticket, but then scalpers buy every ticket for $10k each they aren't going to me able to find anyone to resell the tickets to and will end up losing money.
Anyone can protect themselves from being scalped by just participating in the auction.
This can't make sense. Then where is the profit for the scalper coming from?
Its also a bit untrue. Its true that yes, people _will_ pay it, but did they need to get that high? Scalpers are like auction bots - not always going to win, but will raise the prices for those who would have bought at an otherwise lower value.
Sure thing it makes buying air tickets a lot more stressful, but we do get low cost trips if we plan ahead, or a much-needed last time seat if we can afford it.
Festival appearance rates are agreed on in advance of ticket sales, so tickets prices are the responsibility of festival organisers.
That's really what money is - a transferable token to persuade other people to do stuff on your behalf.
At that point, would scalper's contribution be net positive? Net better than it was? I'm not sure how to answer that.
Namely, if you are aware of intergroup variability in ID-having rates, is choosing it anyways a conscious discriminatory choice?
What I brought up was, knowing this, is still using ID discriminatory?
Edit: Dang it, the best answers always come after I close my laptop. "It would be discriminatory if the government didn't provide people a way to get ID. As a business owner, that's beyond the scope of my responsibility. Same as if someone showed up without $5 and wanted to buy a sandwich." ...is another way to look at it.
Also seems nearly optimal for alienating all but your richest fans. The extra profit you might extract from the concert might not actually put you ahead in the long term when fans stop caring about you because of your profit maximizing business practices.
If demand is so high that people can't afford tickets and you want to do something for the fans, put the game in a bigger stadium.
> Barry Kahn, of Texas-based dynamic ticket pricing consultancy Qcue, doesn’t believe artists should be judged for using tactics including scalping their own tickets (or it’s newer twin, “Platinum” and dynamic pricing to demand). “The issue is the transparency,” he told Billboard. “If they get caught doing something they have said is wrong, then they are deceiving their fans.”
> In this specific instance, Billboard says that Metallica’s management moved up to 4,400 tickets per show over 20 concerts on the tour through intermediaries, masking the process by packaging the tickets as if they were held back for a sponsor.
- https://www.ticketnews.com/2019/07/live-nation-admits-artist...
Take it worth a grain of salt, I have no idea how true it is but it's at least a plausible explanation as to why artists may not want scalpers eliminated.
Some festivals avoid it by requiring ID to be linked to the ticket and banning resale (though they may allow refund).
It’s funny, but “extracting maximum profit” isn’t the only motivation some people have in life. Especially when it comes to cultural events.
[citation needed]
More seriously though, it's true that people - arguably most people - have other motivations than purely materialistic ones. But, like every market, cultural events are a dynamic system. It follows a trajectory over time.
Slightly more greedy people have better outcomes than slightly less greedy ones. The least successful get filtered out. Iterate that over time. What results do you expect?
And yes, this is a general argument of why the market first makes things better, then makes them all go to shit. And it is confirmed by real world. Exceptions involve some factors that counteract the dynamics described above. Do you see such factors at play in entertainment event industry? I don't.
Define "better outcomes" and "Least successful".
The most coveted and arguable most successful music festival in the UK, Glastonbury, operates in the way I described. A variety of other festivals in the UK do too, often due to the politics of the organisers (see, for example, Beautiful Days)
> Do you see such factors at play in entertainment event industry?
Yep, where people make it happen I see them at play and working well to create systems that both the organisers and the public want, and which lock out the third-party profiteers. It would be nice to see such things become more widespread. Though I agree we are less likely to see that where 'the industry' is in control, rather than artists or passionate individuals.
Both venues and airlines normally segment the market by how good a seat you get.
The cost to the concert going public of ID verification would probably be a lot lower than the costs scalping imposes. And the concert venues could certainly capture more than $5 per concert goer by raising prices closer to what the typical person actually pays.
A key part of that concert experience is other people’s excitement too. For one extreme, a Grateful Dead show was basically a mini festival with one act. The crowd before, after and during is an integral part of the experience. Empty seats don’t tell others about the event or participate with the other ticket holders, degrading the value for artists and many concert-goers.
So, a Dead show that sells just a few hundred many-many-thousand-dollar tickets might sit on a maximum supply / demand curve for the venue or scalpers just looking at ticket revenue, but could destroy much of the value of the event for the band and it’s everyday fans who want the event experience and want it for as many people as possible.
This is similar to stuff like auctions to have dinners with certain successful people. Those people have many dinners where they don't ask for a bunch of money from the participant, because then they would only have boring dinners!
They do, they just price discriminate.
Kind of like how when the 4090 released and was being instantly scalped at every website it popped up on then resold for double to triple retail, and yet thousands of redditors were magically “just stumbling on to one totally randomly, oh and my 2050 also sold for $1200!!”
This damages the act's fan base, which in turn negatively affects future revenues via streaming, merchandise, co-branding, and future ticket sales.
(I may be wrong about the artist but recall reading about at least one act that toured like this).
I smell it everywhere now. It makes me furious when I'm in a public park with my kids and clouds of nasty smoke are wafting around.
In effect the number of less wealthy fans who can get into a show is a lottery. Ideally you would do just that, lottery off some tickets at affordable rates and sell the rest at market rate.
But the market has adjusted to that too and re-sellers dominate such lotteries. If you offer the opportunity for arbitrage, the market will take advantage of that opportunity.
So just sell at market rate, cut out the re-sellers entirely.
This seems to be a general rule: if some problem is annoying to people with money and clout, and it persists for long, then perhaps it's not actually a problem for those people, but rather a money maker they perpetuate.
Great example: I bought a bunch of tickets to take my little league to a Mets game, which turned out to be the game where David Wright retired. I sold the leftover tickets, which I purchased for between $12 and $30, for a minimum of $350. We built a batting cage with the proceeds.
On the other side, whenever I’m in the city for a few days, I’ll try to score a cheap premium ticket from a season ticket holder who can’t make the game - and frequently do.
IMO the biggest issue with tickets is that it’s 2023 and we live in a pseudo libertarian business climate. It’s a market that should be regulated, as the ticket platform has an incentive to optimize their own self-dealing. The platform gets a vig for each transfer, so maximizing transactions is the optimal path. I worked for a company whose successful entry into event ticketing prompted a buyout by Ticketmaster.
How do you figure? Are you using a nonstandard definition of "market clearing price"?
> the scalpers would exercise perfect price discrimination if they could.
So what?
That is to say. I think the artist just like the idea of the tickets being affordable to allow their younger and less well off fans access.
I think any argument here has to acknowledge the artists rights in this. Charging more might alleviate the issue, but if private ownership of the performance is to have any meaning, it must include the right to set a price below the market rate. If the artist wants to be "economically inefficient" we as a society must protect that right.
Most venues ARE hypercapitalists.
That club down on the corner where the cool touring bands play? They take a 15-20% cut on the hands merch in exchange for the oh so vauablr service of providing maybe a beat up old folding table.
Fair is fair, right?