The Economics and Logic of Ticket Scalping
The economics of "ticket re-selling" aka "ticket scalping" is really pretty simple. In general, there can only be a secondary market for tickets selling above face value if the following condition exists:
The quantity of tickets demanded by fans has to be greater than the quantity of tickets supplied by the band, promoter, arena, stadium, etc., which results in a sold-out show and a secondary market for tickets selling above face value. Obviously, without that condition, the show is not sold out, and you can buy tickets at the box office on the night of the performance at face value.
Alternative ways to describe that condition are: a) an excess demand for tickets at face value, b) the number of tickets is being under-supplied relative to fan demand at face value, and c) the face value of the tickets is below the true market value of the tickets based on actual fan demand.
That helps explain why we don't see "ticket scalping" for movie tickets - the number of movie tickets supplied to the market is adjusted based on consumer demand. For popular movies, the number of movie tickets available is increased to meet demand, by showing the movie in more theaters, and showing the movie on multiple screens in individual theaters. The length of time the movie remains in theaters is also increased for popular movies to increase the number of tickets available, and the ticket prices for popular new releases are also increased slightly by not allowing discounts or matinee pricing.
For music concerts, if the goal is to eliminate ticket scalping, the solutions are easy: a) increase ticket prices to reduce the number of tickets demanded, and/or b) increase the number of tickets available, either by moving the show to a larger venue or by increasing the number of shows in a given location. In other words, the band and/or promoter can simply increase the number of tickets supplied to meet the number of tickets demanded by the fans, especially if they are unwilling to raise ticket prices. And since the number of tickets supplied is under direct control of the band and its promoter(s), there should be absolutely no excuse for any band or performer ever complaining about "ticket scalping." For bands to complain about ticket scalping is really to acknowledge the band's faulty under-estimation of fan demand, and the blame should therefore be directed at the band for under-supplying tickets to its performances, not towards the greed of secondary ticket brokers.
With that background in mind, consider what happened recently when the band LCD Soundsystem decided to retire and announced it would perform one last show for their fans at Madison Square Garden on April 2. The band grossly under-estimated fan demand and therefore grossly under-supplied tickets - the show sold out as soon as tickets went on sale - which then created an active secondary market for the "ticket brokers," affectionately known as "ticket scalpers" (in a voluntary transaction for concert tickets, who's getting "scalped"?).
So what did the band do? They first got really mad at the ticket brokers (see the rambling, all-lower-case response on the band's website "fuck you, scalpers.") and then called their lawyer about the ticket scalping who told them “it’s legal." According to the band member james who wrote the letter on the band's website, "no joke. it’s fucking legal. i tramped around with friends and band getting insane. i wanted to buy some expensive tickets and then track the seller down to BEAT him. i acted stupid. i did some classic, shakespearean vain “fist shaking”, etc. i made angry tweets."
And then the band "found economic logic" and did what any rational movie theater owner does on a regular basis: The band added four shows at Terminal 5 in NYC from March 28-31, right before their farewell performance at MSG. So the band will make more money, they will be better able to accommodate the demand of their fans, and in the process they will probably reduce the market for "ticket scalping." But they really still don't understand ECN 101, since the band's response concludes with:
"oh—and a small thing to scalpers: “it’s legal” is what people say when they don’t have ethics. the law is there to set the LIMIT of what is PUNISHABLE (aka where the state needs to intervene) but we are supposed to have ethics, and that should be the primary guiding force in our actions, you fucking fuck. and to everyone else: thank you. you rule. don’t let the shitbags win."
HT: Armin Ghazi