Scalper Smackdown: Stub Hub vs. Ticketmaster
Problem: For Miley Cyrus' upcoming "Hannah Montana" tour, she wants the sale of her tickets "to be directly to her fans," and she therefore wants to eliminate the secondary market for tickets to her concerts.
Solution: Ticketmaster will sell only paperless tickets for the Miley Cyrus concerts, which will require attendees to present a credit card instead of a paper ticket, to prevent scalping and resales.
Alternative Solution: To control ticket resales, Ms. Cyrus has two very powerful and effective weapons under her direct control:
1. Ticket Prices: The only reason that a secondary market exists in the first place, is that Ms. Cyrus, her management, or the concert promoters, have mistakenly (or perhaps intentionally) UNDERPRICED the tickets at an artificially low, BELOW-MARKET price, which then actually CREATES the secondary market by generating EXCESS DEMAND. One way to eliminate the resale market is to raise the ticket prices to a market-clearing price. In fact, at some ticket price ($100, $500 or $1,000), some tickets would actually go unsold and there would be empty seats and tickets available at the box office on the night of the concert.
2. Ticket Supply: The only reason that a secondary market exists in the first place is Ms. Cyrus, her management, or the concert promoters, have mistakenly (or perhaps intentionally) UNDER-SUPPLIED the number of concert tickets in each city that would be necessary to meet the demand for concert tickets in that market.
Here is the concert schedule for Miley Cyrus' fall tour, with concerts in about 43 American cities. In only two of those cities, Uniondale, NY and Newark, NJ, is she doing more than one show; she'll be doing two concerts in each of those cities. The ticket resale market for Miley Cyrus concerts would be easily eliminated if she did 2, 3, 4 or 5 shows in each city, or whatever number of shows would be required to meet the demand for tickets. In fact, at some number of multiple concerts in a given city (2, 5 or 12 shows?), tickets would go unsold and there would be empty seats at some of the shows.
Bottom Line: Why is it that for "Hannah Montana: The Movie," there was no secondary market for movie tickets, but for the Miley Cyrus Concert Tour, there will be a potentially huge secondary market for concert tickets?
Movie tickets are supplied and priced to meet the market demand which eliminates the secondary market, whereas concert tickets are under-supplied and under-priced, CREATING the secondary market for ticket resales at above face value.
Eliminating the secondary market for concert tickets is EASY: a) Raise ticket prices, and/or b) increase the number of tickets. And both of the options are completely under Miley Cyrus' control (or the control of her management or promoters).