Sunday, August 16, 2009
On tickets and scalpers
Driving around today we listened to an old Fresh Air podcast (convicted NPR nerd. Sue me) that had an interview about the evils and frailties of concert tickets, scalping and the heinous duopoly Ticketmaster / Live Nation. Not much that I didn't know about, but the piece was really good, putting the bits and pieces together to show a compelling picture of general assholiness by evil corporations and devious scalpers.
We know how it goes. Hot act has a concert, and sets prices for a venue. Ticketmaster has the tickets, adds outrageous fees and you buy them. The fees are high because they are a de facto monopoly; no one else sells tickets for the new hot band, so you can bitch and moan all you want, they will crush you anyway with an iron fist. On top of that, you have the pack of scalpers getting in and reselling for outrageous prices, making a killing because the shitty Ticketmaster servers crashed on you.
I am not going to waste much time on Ticketmaster; it is pretty obvious by now that they are an evil, despicable corporation that is making a mockery of antitrust laws. If you give a shit about music, call your Senator and Congressman and ask them to go nuts on them as soon as they can. I bet Obama will love to crush that evil corp. I will focus more on the scalpers, and how they are not actually a bad thing - in fact, they are a sign that the artist is a moron.
The problem, however, is that we are not using the correct pricing model for concert tickets - the model is just broken. Bear with me, but it is all a matter of economics: a concert is an event that has a supply of tickets, and a certain level of demand. The supply is fixed (the size of the venue), the demand depends on the price. Each person is willing to spend a certain amount of money to go to a concert; I would go to see Daughtry for free, I would pay real money for first row tickets for Radiohead, and you would have to pay me a heft sum if you want me to go to a Nickelback concert.
When a band is popular, this means you have a good amount of people willing to pay for the seats; probably more that the amount available. If the price is low, pretty much every fan will accept it and try to get in - you will have unmet demand (people with no tickets) that will be willing to pay an extra to get in. Here is when you have scalpers: when the face value of the tickets is too low. The opposite can also happen, as the empty seats in Yankee Stadium this season show; no one wants to buy seats, so you can get to see the Yankees paying less than face value to some idiot that tried to make a killing in the secondary ("second hand") market.
If prices are too low, the artist is leaving money on the table, and some random dude is reselling tickets and making money on their backs. Not too fair. How we can make the ticket system better? One simple idea: auctions.
Let the fans bid for the tickets - simple as that. Have a three to five day window open where you can call your price in a bling auction; if the venue has 3,000 seats, the 3,000 top bids get tickets, paying whatever they called. Seats are assigned from top to bottom; those who paid the most get the best seats, and then we go down from there. Big artists would make a killing; smaller ones would be able to fill smaller venues with certain ease, as mildly interested people would be able to call a low price. If the venue needs a certain revenue, you can add reserve prices (minimum bids). And if you feel like a cool dude, you can always set aside a limited amount of tickets at a low price, to be assigned by lottery, and requiring to show ID to get in to avoid scalping.
This way the artists would get more money, venues will be easier to fill and scalpers would be deeply, deeply screwed, as people will be able to offer the outrageous prices themselves. If you want to further piss them off, have a last minute batch of tickets for auction right before the concert, to make sure that the artist can always get the money.
Would this leave the fans screaming that the artist sold out? Yes, no doubt. So what? Musicians need money. They deserve it. They don't see much from CD sales (yay for rampant piracy and evil labels), so they should milk their wealthy fans if they can. This model, in addition, will be great for cult bands with a rabid fanbase; the crazier your followers, the more they will pay for your tickets.
Still, to make this work, we first need to kill, maim and mutilate Ticketmaster and their iron grip on live music. Call your politicians and yell at them. It is higly satisfying.