Ticket Scalping = Unmet Demand and Can Easily Be Avoided: Raise Prices, Increase Supply of Tickets
LAS VEGAS -- Garth Brooks elicited several lofty promises when the country megastar agreed to unretire for an exclusive gig at Steve Wynn’s eponymous Vegas resort. None, however, was loftier than this: Wynn would wage an unprecedented all-out war to prevent even a single attendee from getting in using a scalped ticket. “I’m gonna break them of the habit of thinking they’re gonna sell Garth Brooks tickets for $700 or $1,000,” Wynn told Portfolio.com. “That ain’t gonna happen, even if it means a lot of people who bought tickets are having trouble getting into the show.”
And yet, as the first of a planned 300 Garth Brooks shows over the coming five years parts its curtains tonight, the Vegas and broader show-ticket industry looks on in morbid fascination to see how well Wynn delivers—and what sort of histrionics result. Brooks set the prices at a flat $125 to “make sure the fans can come see me,” he said at an October press conference. That price is uniform regardless of where in the 1,500-seat showroom a guest sits.
The Wynn antiscalping effort has been complex and draconian. Tickets for his first 20 shows—he’ll do four shows 15 weekends a year through 2014—sold out within hours of going on sale on October 24. After that, buyers received calls and letters informing them they were required to inform the Wynn Las Vegas immediately as to who would attend with them. If the tickets were to be a gift, buyers had just a couple of days to tell the box office and fill out a form vouching for that.
Buyers were also warned there would be no refunds, the purchaser would have to bring the credit card used, as well as every attendee to pick them up on the day of the show. Each guest would receive a wristband and hand stamp they could not remove until they entered the venue. All show-goers would have to show photo ID at the door along with their tickets.
MP: If Garth Brooks: a) really wants to be sure his fans can come and see him perform, and b) prevent ticket re-selling, he and Steve Wynn could make several adjustments to the supply of tickets, which they have currently under-supplied relative to the demand. They could either: a) add more concert dates, and/or b) move the shows to a larger venue, both of which would contribute to satisfying the unmet demand, which then creates a market for re-selling. And of course, they could also easily help to reduce or eliminate ticket re-selling by raising the price above $125.
By underpricing and under-supplying the tickets relative to the demand, Brooks and Wynn have themselves created an economic environment that leads directly to a secondary market for tickets priced above face value. They can erect convoluted and costly barriers to combat the natural economic forces that they themselves created, but they are learning an important economic lesson: the laws of supply and demand are not optional.