Tuesday, April 17, 2012

Garth Brooks Show Sells Out in 58 Seconds = Tickets Were Undersupplied and/or Underpriced

Calgary Herald -- "Some 15,322 tickets to country superstar Garth Brooks' highly anticipated July 12 show went on sale at 10 a.m. last Saturday and were snapped up in 58 seconds — the fastest sellout in the Calgary Stampede’s 100-year history.

Country music fans vented on social media. Indeed, by mid-morning, “Garth Brooks” was trending Canada-wide on Twitter. Fan frustration was mostly directed at online resale sites. Prices for single tickets on StubHub, for example, ranged from $275 to $4,500 a piece — much higher than their original $62 cost. That had music lovers like D.J. McMillan of Calgary crying foul about rampant ticket scalping."

MP: Fan frustration shouldn't be directed at online ticket websites, but at those ultimately responsible for creating a ticket shortage, which then creates a market for ticket resales: Garth Brooks and the concert promoters.  Obviously, the artist and promoter failed to both: a) price the tickets according to market demand, and b) supply the appropriate number of tickets to satisfy fan demand.  By under-supplying and under-pricing Garth Brooks tickets, it was the artist and promoter who guaranteed a secondary market for tickets above face value.  The secondary market can easily be eliminated by: a) raising the face value of tickets and/or b)  adding additional shows and increasing the number of tickets for sale.  

Basic Economics: Since the artists and/or promoters  have direct control over P (price) and Q (quantity supplied), simple economics tells us that it's the actions of the suppliers (artists and promoters) that create ticket shortages and ticket re-selling.  Eliminating ticket re-sales can easily be eliminated: simply raise P or raise Q and most of the secondary market and "ticket shortage" would disappear.   

42 Comments:

At 4/17/2012 2:38 PM, Blogger Jon Murphy said...

Wow...58 seconds...That's gotta be some kind of world record, never mind Calgary.

You are right, Dr. Perry. They badly mismanaged the Q and P there. 15,300 tickets is quite a small venue for a country music superstar.

 
At 4/17/2012 3:09 PM, Blogger Seth said...

Garth was the first act at a new arena in KC back in '07. He wanted to satisfy demand. His first show sold out immediately, so he added eight more and sold 160k tickets in total.

He also broadcast one of the shows to 300 movie theaters to further satisfy demand.

http://www.sprintcenter.com/news/detail/garth_brooks_to_play_more_than_300_concerts_nationwide_on_one_night

 
At 4/17/2012 3:10 PM, Blogger Benjamin said...

Dr. Perry is right, as an economist.

But maybe wrong, for an entertainer.

If an entertainer is perceived as "gouging" his fans, it could go rough on his career.

When Leona Helmsly said "only the little people pay taxes" it probably resulted in her landing in jail (as she did).

PR is everything. Just ask Obama, just ask Romney.

 
At 4/17/2012 3:13 PM, Blogger Jon Murphy said...

You make a very good point, Benjamin, but what about the inverse? If no one can go to the entertainer's show because they are always sold out, then that can lead to a PO'd fan base as well.

 
At 4/17/2012 3:29 PM, Blogger Moe said...

People have been shut out of concerts ever since Nero fiddled. Garth, having been bound to Vegas for a while now has some big-time pent up demand going on. The fact that fans are unhappy, well, I've been there as well and they will survive.

 
At 4/17/2012 3:36 PM, Blogger Methinks said...

When Leona Helmsly said "only the little people pay taxes" it probably resulted in her landing in jail (as she did).

Are you writing from behind bars? If dumb comments can land you in jail in this country....

 
At 4/17/2012 3:41 PM, Blogger Benjamin said...

Methinks-

I prefer to write while in a bar, not behind bars, and so I am.

Helmsley's commentary--"only the little people pay taxes" was publicized.

If you don't think PR counts, that is your right. I would advise you to seek PR counsel should you ever end up in highly publicized case.

 
At 4/17/2012 3:51 PM, Blogger juandos said...

Garth who?

Thankfully there's YouTube to educate me on who this fellow is...

 
At 4/17/2012 4:05 PM, Blogger Buddy R Pacifico said...

This comment has been removed by the author.

 
At 4/17/2012 4:05 PM, Blogger Moe said...

Garth who?
sheesh, haven't you ever watched Wayne's World"????

 
At 4/17/2012 4:07 PM, Blogger Buddy R Pacifico said...

"..." the fastest sellout in the Calgary Stampede’s 100-year history."

I think Garth might just blame circumstance based on this previous statement....

"Well, it ain't no woman,
Flesh and blood
It's that damned old rodeo
Well, it's bulls and blood
It's dust and mud
It's the roar of a Sunday crowd

It's the white in his knuckles
The gold in the buckle
He'll win the next go 'round
It's boots and chaps
It's cowboy hats
It's spurs and latigo
It's the ropes and the reins
And the joy and the pain
And they call the thing rodeo"

I think I'll wait for Vegas to avoid the power of "that damned old rodeo" and let the maitre d' dynamic price.

 
At 4/17/2012 4:15 PM, Blogger juandos said...

"sheesh, haven't you ever watched Wayne's World"????"...

No moe though I've heard of the movie I had to look it up...

Mike Meyers and Dana Carvey seen in previous bits on television did not strike me as a good enough reasons to make a movie let alone wasting irretrievable time watching it...

Again thanks to YouTube I feel vindicated with my opinion of Waynes World...:-)

Ahhh, isn't the internet a wonderful thing?!?!

 
At 4/17/2012 5:00 PM, Blogger Hydra said...

Garth might disagree that the secondary market can easily be eliminated by adding additional shows.

 
At 4/17/2012 5:04 PM, Blogger Hydra said...

If no one can go to the entertainer's show because they are always sold out, then that can lead to a PO'd fan base as well.

=================================

15,000 will go, so that's not like no one.

You just have to win the 58 second lottery first, and then cough up the bucks.


Winning the lottery is part of the price: call it an external cost.

 
At 4/17/2012 5:33 PM, Blogger Cabodog said...

I tend to boycott concerts regardless.

Too expensive, rude fans, blocked views and frankly, the music sounds much better on my iPod than in person.

 
At 4/17/2012 6:02 PM, Blogger Abir Mandal said...

Must be speculators creating an artificial shortage of tickets. Obama should spend another 5 mill in regulating speculation in the entertainment market.

 
At 4/17/2012 6:50 PM, Blogger Marko said...

People are stupid.

 
At 4/17/2012 6:56 PM, Blogger Marko said...

I agree Abir - the government must do something about this outrage! Think of all the regulations we could come up with, and all the time and tax payer dollars we could spend to solve this "problem". Think of the poor old ladies that can't go to the concert because of the big bad speculators and their rich, fat cat corporate capitalist backers.

 
At 4/17/2012 6:59 PM, Blogger Abir Mandal said...

^Plus think about the number of jobs created (or saved) in the government via creation of the Department of Justin Bieber 'fair' sharing. Which means... GDP Growth!

 
At 4/17/2012 7:03 PM, Blogger markbahner said...

Could have been worse. They could have waited in line for a year.

The Line

 
At 4/17/2012 7:06 PM, Blogger Larry G said...

who in their right mind would pay more than $25 for a frikkin ticket for ANY entertainer?

I'm frankly surprised that EBAY or similar has not gotten involved in dynamic ticket pricing.... for a fee of course...

:-)

 
At 4/17/2012 7:40 PM, Blogger Pulverized Concepts said...

Chances are ALL the available tickets were purchased for distribution in the secondary market via programmed on-line purchasing. The promoters and entertainer got their money guaranteed, now the secondary vendors have to make their sales. You might be able to buy tickets for face value right outside the arena at showtime.

 
At 4/17/2012 7:58 PM, Blogger Hydra said...

I'm with Larry, not interested in spending $100 bucks to be with 15,000 people, especially if one of them is Garth Brooks.

 
At 4/17/2012 8:06 PM, Blogger Methinks said...

Bunny,

You seem to be blissfully unaware that our criminal justice system is not meant to incarcerate people for merely uttering stupid or unkind things. Where do you think you are? Cuba? Not for another decade or so, dear.

That you write from your perch at a bar is illuminating. It all makes so much more sense now. Is Larry G. on the bar stool next to you muttering darkly about The Big Lie (the supply/demand conspiracy)

 
At 4/17/2012 8:20 PM, Blogger Larry G said...

supply/demand conspiracy? the heck you say.... are you a trouble-maker or something?

:-)

 
At 4/17/2012 10:33 PM, Blogger kmg said...

Dynamic pricing would have helped. An algorithm designed to estimate elasticity and maximize aggregate revenue, would be pretty simple.

Or, the old fashioned way - tour that city again in the near future, with a higher price and/or larger venue.

 
At 4/18/2012 1:30 AM, OpenID Sprewell said...

Your P's and Q's are irrelevant: those complaining are economically illiterate and would probably never bother learning. Set the price at $150 and they'll bitch that it's too much. Set it at $30 and they'll bitch when it sells out in 5 seconds and they didn't get a ticket. Of course, Brooks could always do more concerts at the lower price, but if he wanted to do that, he'd have done it already, so presumably he doesn't want to work that hard. So he should just set the price higher to maximize his salary- which is essentially happening anyway, just with a smaller cut for everyone but the scalpers- but then those dimbulbs at whom Benjie's "PR" is aimed at may boycott him, so we get to the current state. I wish these artists and venues would man up and point this basic economics out to the dumb customers, but that's probably too much to hope for, plus some segment just wants to complain.

 
At 4/18/2012 9:08 AM, Blogger drj said...

wait till they are has beens and then you can see them at native casinoes for thirty bucks

 
At 4/18/2012 10:50 AM, Blogger Jon Murphy said...

Poor Garth Brooks. Can't get no love

 
At 4/18/2012 1:58 PM, Blogger Mike said...

Many conversations about this topic and Dr. Perry still refuses to listen to the one thing that I actually know something about (having worked in the biz for over 20 years).

There are a LOT of reasons why shows sell out and very few of them are incompetence. What better than a show selling out in less than an hour to create a buzz for the Wynn in Vegas? You can't buy the type of press that invades social discussion...all the way down to economics blogs.

 
At 4/18/2012 2:02 PM, Blogger NormanB said...

Run an auction of the tickets. That's why we have the internet. Do an 'EBAY'. Why someone hasn't tried this is beyond me.

 
At 4/18/2012 2:08 PM, Blogger Jon Murphy said...

There are a LOT of reasons why shows sell out and very few of them are incompetence. What better than a show selling out in less than an hour to create a buzz for the Wynn in Vegas?

That's a very good point, Mike, but when the show sells out in 58 seconds, doesn't that tell you maybe the price was too low? What if you still sold out charging $100 a ticket? Or $200? You'd be able to generate the same buzz but make more money. And isn't that the point here? With all due respect o [insert artist/singer name here], aren't they just trying to earn a buck?

 
At 4/18/2012 7:19 PM, Blogger Hans said...

This comment has been removed by the author.

 
At 4/18/2012 7:21 PM, Blogger Hans said...

This comment has been removed by the author.

 
At 4/18/2012 7:23 PM, Blogger Hans said...

Splendid comments by Abir Mandal and Marko....

BTW, Barf is the one that wanted royalties on resell on his used CDs...

He also tried to reestablish the ticket "scalping" statutes, in Tennessee..

I do like his hit song, I'm Trotskyite Cowboy Banging the Wall Waiting for Something to Fall."

 
At 4/18/2012 8:13 PM, Blogger Jeff said...

This comment has been removed by the author.

 
At 4/18/2012 8:17 PM, Blogger Jeff said...

Funny how every nephew of a politician or union boss gets a couple dozen tickets before the public sale.

 
At 4/19/2012 3:01 PM, Blogger Mike said...

Jon Murphy,

They are trying to make a buck and both the artist and promoter usually have a very good idea about how many people will come based on typical factors (day of the week, other options - like a playoff basketball game on the same night - new cd release, hit songs on chart, ticket price, etc).

They also know how to make a show sell out in 15 minutes. For example, Taylor Swift sold out 2 shows at Minute Maid Park (where the Astro's "play") in a few days. But she was on fire at the time. Garth Brooks, on the other hand, has entered ledged status and sells tickets differently. Unless they create the circumstances, he may very well have a lot of night-of-show walk up purchases and not selling out as a "legend" is the quickest way to transition to 'has-been'. Garth could have very easily chosen to schedule multiple shows but elected to make a splash. This was entirely on purpose.

 
At 4/20/2012 5:55 PM, Blogger james said...

I guess garth brooks has lots of loyal fans

 
At 4/21/2012 6:47 AM, Blogger Don Culo said...

They should have sold the tickes as Chris Gaines concert tickets and only his real fans would have bought the tickets.

http://en.wikipedia.org/wiki/Chris_Gaines

 
At 4/22/2012 12:33 PM, Blogger The Popper said...

How do you know what the right P and Q are, though. You make it sound like its obvious. But I had the unfortunate scenario of having P too high. There was enough Q, but I needed to sell more total.

How can anyone know for certain what the right P is?

 
At 4/22/2012 12:33 PM, Blogger The Popper said...

How do you know what the right P and Q are, though. You make it sound like its obvious. But I had the unfortunate scenario of having P too high. There was enough Q, but I needed to sell more total.

How can anyone know for certain what the right P is?

 

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