Reselling tickets for profit to be outlawed in UK government crackdown
theguardian.com
theguardian.com
We also know prices can go up on the raw ticket and we know that consumers can bear that given where they were before this legislation. That additional money will go to Venues, Artists and Labels who will, ideally, create more and better shows for the all of us.
If you imagine today that a ticket is $45 (speaking US) and customers pay $450, eventually for it. That $405 doesn't go to the Artist or the Venue, it goes to a middle layer which adds little to no value for the eco-system beyond supporting a transaction. Moreover, when you spend all the budget on the ticket, you're less likely to buy merch and food at the venue.
Something most on this site could easily build with the help of stripe, a few database tables, and an API to the venue's ticketing management system.
I don't really see why the UK government would need to step in here at all.
- Why didn't venues want more of the revenue?
- Why couldn't artists simply set their terms for their tickets? I don't have the answers and it may depend on
There's nothing the venue can do, I went to a show recently that sent day of QR codes to try and prevent resale, and scalpers either mirror the app with a link, or take a picture. You can't check ID's at a 100,000 + person event.
However, wanting to keep ticket prices down for _other_ reasons (selling more merch, good will, etc) is valid.
There's a reason why concerts prices are set to a much lower price that what scalpers can resell them, it's because the artists usually don't seek to extract the most money for a tour and they'd rather give their fans an opportunity to see them instead. (As long as it's profitable indeed, but there's a big gap).
If you are going after full profit optimization we are leaving huge amount on the table by offering billionaires food at prices that are insignificant for tem. Maybe we should start optimizing for the million dollar burgers then?
If the average Brit is spending %10 of their daily income for a meal, obviously its suboptimal for a person making a million a day to eat anything for less than 100K. In fact, it doesn't even have to have anything to do with percentages, maybe the meal can be optimized up until 999910GBP. Even the rich guy needs to eat, optimize the prices to the point that he has to choose between starvation and 999910GBP burger
buyer agrees to buy ticket at $PRICE.
how is society hurt, here?
the government banning this is immediately harmful: it prevents a mutually agreeable trade that would otherwise have increased the utility of both parties.
Some systems need to work and be accessible to everyone so we can sustain peaceful and healthy society.
This is not charity, this is to account for externalities and the miscalculations in the free market. Awful lot of people are underpaid and overpaid as they progress through their lives because the markets are actually not that efficient and prices are not formed under perfect information or instantly.
You want your mechanical engineers to be able to afford decent life even if all the market current wants is JavaScript engineers because when the tides shift you may end up needing mechanical engineers to produce physical stuff so you want them around and happy.
Also, the price could actually be too low too when its optimized for short term profits. Re-sell 100GBP tickets for 500GBP, filter for money and leave out the actual fans and maybe lose all the events for the next year. If you are going to do a daytime robbery, better not ever need money again from the people you are robbing.
the high ticket prices incentivise the creation of new venues and the entrant of new artists into the market. they indicate that the music industry is not supplying concerts in sufficient quantity/quality as the market demands, or perhaps not in the right places or at the right times. prices are a signal; you outlaw them at your peril.
this is a case where the monkey-brain fairness intuition is simply flat out 100% wrong. scalper economics has been studied for decades; it is known that banning these trades exacerbates shortages. lot of ppl in this thread who would not pass introductory microeconomics.
Always amuses me that the wannabe market experts ascribe theory of mind to markets. Personal risk tolerance and ability to execute without starving is what constrains supply of talent, who are not intrinsically born with either the knowledge or capability to begin the market based transaction process.
God (or your market) does not magically whip up concerts in response to spreadsheets. People taking risks do.
It is one of the primary reasons why many people from the subway times and I’m not having a good time, like rocket scientists becoming taxi drivers
How does scalping, which transfers money from fans, artists, and the music industry to ticket touts who have nothing to do with music, "incentivise the creation" of anything? Except, I suppose, bot farms and clickfarm sweatshops?
What about some middle ground - allow sale for and below the purchase price and punish severely any profiteering? The only reason scalpers do it is for money - if the punishment and risk are big enough it solved itself.
Where I live, the biggest festival in whole country (Paleo @Switzerland) explicitly bans resale for some time and nobody real is complaining, its fair and tickets are sold within minutes of becoming available.
The last point - if some psycho is starting to shoot others because they can't go to some fucking concert then the underlying condition needs to be targeted, not sweeping reality in front of them so they never trip on some obstacle in real life. 'Eat the rich' trope is stuff immature frustrated kids tell to peers, nothing more.
The only reason people work and run businesses is for money. Not doing it for money is called a "hobby", "charity" and "volunteering".
There is no requirement for perfect information in order for a free market to function. The term for lack of perfect information is "risk" and is factored in to negotiations and the price.
Any system that relies on unselfish behavior fails.
Capitalism is “the astonishing belief that the nastiest motives of the nastiest men somehow or other work for the best results in the best of all possible worlds.”
(Attributed to J. M. Keynes: https://en.wikiquote.org/wiki/John_Maynard_Keynes#Attributed)
P.S. It doesn't help of course that "free" markets are never really free because they are very quickly taken over by the "nastiest men" etc. and the last thing those people care about is freedom, particularly that of the markets they make their money from.
See for instance the subject of ticket touts. There is no free market in online ticket reselling because the entire market's cornered by bot farmers who buy tickets in bulk automatically the moment they are made available and leave none for anyone else. "Free" market, my sweet little hiney.
And btw, in the UK the same thing happens with driving test slots:
if the supply of tests were allowed to rise naturally to meet the existing demand, this problem wouldn't exist. we are only in this situation because the government artificially limits the supply.
this is a very common pattern where people get upset at high prices but are completely incurious as to where the shortage really comes from.
That's called a "cartel". Cartels are unstable because they have every reason to undersell the cartel price. OPEC had a lot of problems with its members selling on the sly at lower prices.
> and share the profit
They're not going to share the profit. They're going to pocket it.
It probably falls apart on that last assumption: rich people aren't really willing to pay proportionately more for goods.
> a mutually agreeable trade that would otherwise have increased the utility of both parties.
However, entertainers have an image problem that conflicts with the desire to maximize profit. Entertainers are often times in the business of appealing to the broader public. But if they restrict their ticket sales to the highest bidder, then the broader public's appeal is limited.
Having a third party engage in the price discrimination allows the entertainer's image to remain intact, while also collecting higher prices (perhaps not from the ticket sales directly, but the third party willing to pay more for the entertainer if the entertainer allows them to resell tickets).
Yet many people, possibly most people, feel something is broken.
The KPI of profit has become harmful enough that people like Thiel observe that the system isn’t working anymore.
Actors that misuse or unfairly dominate free markets will trigger regulation, that's the way it has always been. Some regulators are weak, so we still have endure cancers like Google and Microsoft.
There exist only so many performance days in an entertainer’s lifetime. And, obviously, venues have capacity limits.
There are plenty of cases where the seller (artist, venue, etc) want to keep prices low to allow a wider audience to attend the show.
There are only so many seats in a venue. Suppose there are 1000 seats and 5000 people want tickets. What's your plan on how to allocate them?
> the people with the most money
That's not the algorithm employed. The algorithm is "the people who are willing to outbid the others". That is quite different.
Besides, with a lottery you won't know if you got the ticket until the last minute. How are you going to make plans with your sweetie, then? Or are traveling from out of town?
It was obvious to us that the "people with most money" algorithm was vastly superior since it made people work harder to get those money, thus enhancing the society. Also, the extra cash strongly incentivized and funded people to create more of the scarce resource.
The other algorithms failed to incentivize to such a degree that in the end we were starving and freezing because nobody wanted to work to create food, heat or any other products and services anymore.
When the demand is higher than the supply and supply is inelastic (which is the case for these kind of events) then there's no difference between unaffordable prices and a shortage.
The difference only exist for the upper class who can pay the inflated price anyway.
In a society where there are significant differences in income, the price signal is meaningless and it just segregates people by revenues.
Because this answer has absolutely nothing to do with price signal as a economic concept.
yookay government's crusade to outlaw all useful economic activity continues apace. you can't legislate away scarcity.
EDIT:
>How is scalping a useful economic activity? What new value is created by for example buying up loads of Taylor Swift concert tickets and selling them at a marked up price?
if I don't want to wait in a queue or spam F5 on a website at 4 in the morning so I can be one of the first, I can instead pay somebody to do all that tedious work for me, and they can profit from it. this is a valuable service that I'm willing to pay for, and have in fact paid for with no regrets whatsoever.
SCARCITY IS A FUNDAMENTAL ECONOMIC FACT. more people want to attend a concert than there are seats available. this scarcity must be rationed in some way. there are many ways: queues, lotteries, clientelism, theft. prices are one of the more efficient mechanisms, because unlike the others, money can be directly traded, stored, accounted for, and is a means by which the value of other goods and services can be compared.
if I wait in a queue, that is a cost I have to pay, but it is simply lost. it goes nowhere. but if I pay someone else to sit in the queue for me, I can do something else useful with the time I would have spent in the queue, and that other person can then use the money to buy something else in the future. that is the value of scalping! moreover, that one other person can sit in the queue on behalf of N other people; we all benefit from this economic specialisation and reduction of redundancy.
scalpers are the unjustly persecuted heroes of our economy. they are apostates from Queueing, our national religion.
yes, that's what Section 75 protection is for
It doesn't have to though, does it? For example there's no black market for airline tickets.
This is such a copout, resellers inflate the price.
>yookay government's crusade to outlaw all useful economic activity continues apace.
How is scalping a useful economic activity?
What new value is created for concert goers or artists/venue by for example buying up loads of Taylor Swift concert tickets and selling them at a marked up price?
No value is added by paying a huge extra margin to rent seeking scalpers.
Not everything in the world has to be a stock market.
>SCARCITY IS A FUNDAMENTAL ECONOMIC FACT.
>scalpers are economic heroes.
Lol, the tout is crashing out.
the ground truth is what individual people are willing to pay.
This kinda seems like it's just putting an ideology before people.
Markets and money are just tools for human benefit, don't turn your wrench into a religion.
Sorry but I remain unconvinced.
Scalpers don't produce more tickets, they just eat away consumer surplus. It's not a net good its just rent seeking.
Right? Scalpers are only the latest in a long line of wrongly persecuted financial minorities like black market sellers, smugglers, drug lords, pirates, slavers, pimps, and Ponzi scheme entrepreneurs. Freedom to the heroes of our markets!
Equating someone who sells a pokemon card on ebay with people who sell other people into slavery is a bold choice.
Scalpers are only the latest in a long line of wrongly persecuted financial minorities like black market sellers, smugglers, drug lords, pirates, slavers, pimps, and Ponzi scheme entrepreneurs.
Why won't you confront what you actually said? Why are you trying to twist words around instead?
> Buy this NFT and get free tickets to X.