Ceaseless Scalping
Anyone who has attended a concert has probably encountered ticket scalpers. Ticket scalping is the reselling of tickets in a secondary market at a higher price to make a profit. While ticket scalping generally angers both consumers and musicians it seems like there isn’t much anyone can do.
The appearance of a secondary market shows that the tickets are undersupplied, and underpriced. This makes sense as most venues would rather have a sold out show at lower ticket prices (and make more money off concessions and merchandise) then risk not having a sold out show due to higher ticket prices. According to the law of demand the lower the prices, the higher quantity will be sold which is why original sellers usually make prices lower so they can sell out venues. The tickets are often undersupplied because there are a limited amount of seats they can sell. This is why the secondary market started. Scalpers saw this opportunity and began to mass buy tickets at the original price and resell them for higher prices. Consumers are then forced to pay the resell prices because all of the original tickets are sold out.
Most economics see this secondary market as a good thing and generally oppose any government intervention that would prohibit resale of tickets. They argue that such regulations would lead to market inefficiencies, they also argue that ticket scalping takes advantage of consumers willingness to pay as those who value the tickets more, will in turn pay more for them. While this is true, others argue that true fans shouldn’t have to pay the ridiculous prices and that these scalpers are taking possible profits away from the performers. Many musicians agree and the whole issue of ticket scalping was brought to the media when in 1994 rock band Pearl Jam tried to take down ticketmaster, a ticket selling site known to raise ticket prices using ethically questionable methods. The band set strict guidelines for their summer tour that tickets were to be sold at $18 with a $1.80 service fee whereas ticketmasters service fee was two or three times that at the time. They also specifically avoided venues that used ticketmaster to sell tickets. Pearl Jam then legally pursued Ticketmaster by filing an antitrust complaint, which launched a investigation into Ticketmaster’s business ventures. While Pearl Jam lost their legal pursuit and Ticketmaster still continues today, they brought scalping and what some would call unethical ticket selling to the public eye.It doesn't seem as though ticket scalping will be going away anytime soon though many artists recently have been desperately trying to combat the scalpers. Pop artist Adele attempted partnering with SongKick to sell a percentage of tickets at face-value and her team went through buyers who had bought tickets in bulk and refunded them in an attempt to ensure the tickets were only being sold to fans. Other musicians such as the late Tom Petty attempted similar approaches by purchasing tickets off of ticketmaster and offering them at the original price for fan club members.
Despite efforts the battle continues between scalpers, performers, and consumers. The secondary market for tickets will not fall unless artists begin to charge more for the tickets initially which many are reluctant to do. Concert goers will just need to continue to cough up $20 service fees for a $30 ticket.
Works Cited
Crosby, Paul, and Jordi McKenzie. “The economics of ticket scalping.” The Conversation, 10 Sept. 2017, http://theconversation.com/the-economics-of-ticket-scalping-83434.
Boehlert, Eric. “Pearl Jam: Taking on Ticketmaster.” Rolling Stone, 28 Dec. 1995, https://www.rollingstone.com/music/music-news/pearl-jam-taking-on-ticketmaster-67440/.
“Artists who have tried to fight back against bots and scalpers.” CBC, 21 Oct. 2016, https://www.cbc.ca/news/business/artists-who-have-tried-to-fight-back-against-bots-and-scalpers-1.3805299.
Martens, Todd. “Ticketmaster’s new blog: ‘We get it-- you don't like service fees’.” Los Angeles Times, 23 Aug. 2010, https://latimesblogs.latimes.com/music_blog/2010/08/Ticketmaster-a-new-era-of-transperancy-or-smoke-mirrors-.html.
I agree that it is hard to completely eliminate ticket scalping at concerts. It is harder to eliminate at concerts because it can not be seen anywhere else compared to a live sporting event can be seen on live TV.
ReplyDeleteI agree that while ticket scalping is not the most ethical practice, regulating the secondary market would not be beneficial to the economy. As you stated, while ticket prices and become exorbitantly more expensive on these resale avenues, there will still be some consumer surplus as some customers highly value the product (in this case the ticket).
ReplyDeleteI also found it interesting that artists purposefully sell tickets at a cheaper price in order to create a "false shortage" and sell out. Perhaps, as you mentioned, if this practice was abandoned then the ticket resale community would slowly begin to die out. Therefore, I agree that if the resale community is to end, it is on the artists and their management to change (not the resale companies themselves).
Your post shows how while ticket scalping may be something artists want to prevent, that there are many more layers to it. It isn't just the artist and the customer there are many factors that go into it, such as where the tickets were originally purchased. bThe way Pearl Jam went after ticket master to prevent ticket scalping shows this issue effects many artists and bands greatly. However, I am surprised that when they pursued it that there were no legal repercussions for the site.
ReplyDeleteI absolutely think that ticket scalping is angering artists and some consumers but I do think in the end it is beneficial. If I want to go to a baseball game really badly and it is sold out, I can still get a ticket. I'm likely able to find a ticket on a site like ticketmaster or stubhub so I am able to go. If these sites were not allowed then the people who really want to go and who are willing to spend more money will not be able to go because all the tickets are sold out. They are just taking advantage of the market not being at equilibrium. If these musicians are really worried about these sights then they should raise their own ticket prices or just deal with these ticket resales companies.
ReplyDeleteI can see the side of customers and musicians being upset about ticket scalping but at the same time I frequently use apps such as Game time and Stub hub. These apps and sites show us how when the demand for a concert our game has gone up the prices on these site will go up as well because these companies are able to charge more for these tickets.
ReplyDeleteI agree with your statement that ticket scalping is both irritating and difficult to stop. It is absurd that the customer has to not only pay a high price for the ticket itself, but also the processing fees. While the ticket scalpers may be "taking advantage" of a customer's willingness to pay, as the economists say, they are also making it harder for people with lower incomes to enjoy the experience, as concert tickets are a normal good. Additionally, I find it very deceptive that they are able to create a fake consumer shortage, to generate a sense of urgency, and furthermore, make the consumer's willingness to pay increase even more.
ReplyDeleteWhile ticket scalping is irritating to both customers and musicians, but in the end I believe that it is beneficial for fans that want to see the performance and musicians who are performing. Using websites and apps allow more and more people to attend, therefore increasing the total amount of revenue made. If the musician feels that this is not right, then they should change the price all together.
ReplyDeleteWhile ticket scalpers are annoying, I can see where they're coming from. Dedicated fans will pay almost anything to see their idol, so the demand for dedicated fans is almost perfectly inelastic, but not quite. So it makes sense that people buy the tickets at face value and charge much more than a fair amount for them. The scalpers buy tickets in bulk because they don't really have a doubt that people will buy the tickets from them, and they only see a profit being made. However, when they do buy and resell tickets there is a chance that they won't sell all of the tickets in their possession. They'll still make a profit, but they may not sell out. That will actually take away money that the revenue could've profited off of. Tickets may be sold out, but the ticket isn't being used so there will be less people in attendance than expected. The money that fans would've spent on merchandise and food never got the chance to get there.
ReplyDeleteThis is a really great issue to be aware of as this is very relevant to many of us who try to buy affordable tickets to go see musicians we really love. I will say it would have been nice to see you mention elasticity in your analysis as you talk about how ticket scalpers resell the tickets at a higher price but consumers are still buying it to see the concert. This shows that the price of tickets can increase by a certain amount and consumers are still willing to buy it. But I like that by showing ways of preventing ticket scalping that have already been used, scalpers may exit their industry because their is less profit to be made after these precautions are taken.
ReplyDelete