Friday, June 29, 2012

Where's the Outrage for Evil Ticketmaster?

"Ticket scalpers" have a tough time.  Everybody seems to despise them: musicians, music and sports fans, promoters, sports teams, and concert venues.  "Scalpers" are accused of "cheating" people (see sign above), and musicians like LCD Soundsytem call them really, really bad names like "pieces of f***ing shit," "scalping scumf***s and "shitbags."  Wow!  You would think they were talking about Osama bin Laden, Hitler, or Jerry Sandusky, not a seller engaged in a voluntary, market transaction with a willing buyer, sometimes for a ticket selling below face value!

Well, how about some outrage for the really, really, truly evil bad guys and ticket-selling monsters - Ticketmaster. Have you checked their fees and paperless ticket restriction lately?  If not, here's what the evil, anti-competitive, anti-fan ticket monopolist is doing, using the Eric Church concert in October at the Joe Louis Arena as an example:


Let's summarize

1. If you purchase a $47.50 general admission "paperless ticket," you're hit with a whopping $11.30 ticket charge, which is 24% of the ticket price (see above)!

2. If you purchase a $37.50 reserved seat in the "upper bowl," you'll pay a 29% ticket fee, or $11.05 (see above). 

3. Tickets for the Eric Church concert are "paperless," and for this show they are NON-TRANSFERABLE, and the ORIGINAL TICKET PURCHASER MUST ATTEND THE EVENT.  In other words, you can NOT sell the ticket after it's purchased, even for a price below face value.  And if you get sick or can't attend the concert, too bad, there's NO way to transfer the ticket. You can't even give it away.  Moving towards "paperless ticketing" is Ticketmonster's strategy of trying to kill the secondary market, which then creates a new set of anti-consumer, anti-fan outcomes by taking away a fan's property rights to his or her ticket, and creating fan inconveniences, see next item.

4. If you attend the concert with your friends and you bought four tickets together, you MUST all enter the venue at the same time as a group with the person who purchased the ticket, who must present a photo I.D. and the credit card used to purchase the tickets.  

Is there anything that can be done to challenge the evil Ticketmonster?

Well, comedian Louis C.K. is going up against both Ticketmonster and ticket scalpers by selling tickets directly on his website for $45 to his upcoming national tour, here's from a long rambling message on his website:

"Tickets across the board, everywhere, are 45 dollars. That's what you'll actually pay. In every case, that will be less than anyone has actually paid to see me (after ticket charges) in about two years and in most cases it's about half of what you paid last year.
Making my shows affordable has always been my goal but two things have always worked against that. High ticket charges and ticket re-sellers marking up the prices. Some ticketing services charge more than 40% over the ticket price and, ironically, the lower I've made my ticket prices, the more scalpers have bought them up, so the more fans have paid for a lot of my tickets.

By selling the tickets exclusively on my site, I've cut the ticket charges way down and absorbed them into the ticket price. To buy a ticket, you join NOTHING. Just use your credit card and buy the damn thing.

Also, you'll see that if you try to sell the ticket anywhere for anything above the original price, we have the right to cancel your ticket (and refund your money). this is something I intend to enforce. There are some other rules you may find annoying but they are meant to prevent someone who has no intention of seeing the show from buying the ticket and just flipping it for twice the price from a thousand miles away."

MP: It's not clear yet how he'll prevent tickets from being sold above face value, but at least Louis C.K. has cut out the ticket monopolist by selling tickets directly to his fans, and we can expect to see more of that in the future.  Charging service fees of 20-30-40% to process a ticket order that is both paper-less and now almost cost-less using online technology seems to be clearly unsustainable. Hopefully, fans will start to re-direct their frustration over high ticket prices from secondary markets (which generate huge benefits for both ticket sellers and buyers) towards the evil monopolist - Ticketmonster!

37 Comments:

At 6/29/2012 3:49 PM, Blogger morganovich said...

another business model disintermediated by the internet.

gotta love it.

 
At 6/29/2012 4:29 PM, Blogger Moe said...

I guess the word "master' is in their name for a reason.

Did you hear Ticketmasters CEO's response to Louis CK? He's all for it! here's the quote:

Given his success, you'd think Ticketmaster would be shaking in their antitrust-busting boots. You'd be wrong.

Full size
"We love what @LouisCK is doing and support it," tweeted the company's CEO Nathan Hubbard. "[W]ish more people had the stones to do all-in ticketing."


Odd response eh?

 
At 6/29/2012 6:17 PM, Blogger Cabodog said...

The free market has an easy answer: if you don't agree with the fees, then don't buy the product.

As simple as that.

I'm in no way advocating for Ticketmaster, as I don't agree with the horrendous surcharges. Just sayin' that no one's forcing folks to pay those fees.

Entertainment is a 100% nonessential product and this would be an easy boycott for most folks. However, time and time again, event venues sell out, so Ticketmaster has determined the free market is willing to pay the fees (for now); more power to them.

That said, as a consumer I can hardly wait for someone to come along with a better mousetrap and put Ticketmaster out of business.

 
At 6/29/2012 6:48 PM, Blogger Jon Murphy said...

I believe Bruce Springsteen and a number of other artists are suing Ticketmaster over the fees. The artists see a very small portion of ticket sales.

 
At 6/29/2012 8:15 PM, Blogger The High Priest said...

Why is Ticketmaster a monopoly? (Genuine question here.) It has no government backing, no impossible-to-overcome regulations, literally nothing that forces people to sell their tickets through them. Why have they not been undercut by someone who can sell tickets for less, charge fewer fees, and return a higher margin to the performer?

 
At 6/29/2012 9:02 PM, Blogger Jon Murphy said...

Why have they not been undercut by someone who can sell tickets for less, charge fewer fees, and return a higher margin to the performer?

Scalping is illegal and, in many cases, Ticketmaster deals directly with the record companies or venue to sell tickets. The artist(s) usually have very little say, even when one is The Boss

 
At 6/29/2012 9:06 PM, Blogger Jon Murphy said...

Although I will say that Ticketmaster does have de facto government support in that it has made any selling by a third party (scalpers) illegal.

 
At 6/29/2012 9:24 PM, Blogger Ron H. said...

"disintermediated"

Hmm. hold on. I'm looking, I'm looking.

Ahh! There it is.

cut out the middle man.

OK, continue.

 
At 6/29/2012 9:33 PM, Blogger Pulverized Concepts said...

Scalping isn't illegal everywhere. I scalp tickets to sports events and occasional concerts in the upper Midwest and it's legal in most cities. Ticketmaster doesn't bother me as much as StubHub and other resellers, who are the suppliers to scalpers. Most are season tickets that aren't being used by the holder. By the way, standing around outside begging people to buy a couple of tickets to a game isn't the easiest way to make a few bucks. And selling something with the proviso that it can't be resold, that it's non-transferable, is a violation of business law as far as I'm concerned.

 
At 6/29/2012 9:34 PM, Blogger Ron H. said...

As Jon says, I believe Ticketmaster works directly with the venue and if I'm not mistaken agrees to buy enough tickets to cover the cost of the concert so there are no losses for record companies or venues. for this service they are granted exclusive agency for ticket sales.

If that's not correct please enlighten me.

 
At 6/29/2012 9:38 PM, Blogger Ron H. said...

"And selling something with the proviso that it can't be resold, that it's non-transferable, is a violation of business law as far as I'm concerned."

You may be agreeing to that proviso when you buy the ticket. Not sure.

 
At 6/29/2012 9:44 PM, Blogger Ron H. said...

Louis C. K. says: "...ironically, the lower I've made my ticket prices, the more scalpers have bought them up, so the more fans have paid for a lot of my tickets."

Holy moly! Somebody please buy this man an economics lesson.

 
At 6/29/2012 9:48 PM, Blogger Jon Murphy said...

Scalpers are a sign that prices are too low. If you want to deal with scalpers, raise your prices.

I understand what entertainers like Louis are trying to do: they want their show to be accessible to everyone. Well, that's great and all, but not entirely practical, is it?

 
At 6/29/2012 10:21 PM, Blogger Pulverized Concepts said...

Lots of tickets are sold at less than face value. I never buy a ticket on the street for face value or more and only buy a ticket in the box office if I intend to sell it at a profit. Scalpers provide a service to those that make a last minute decision to attend an event and to those that aren't able to attend at all. Without scalpers arenas would have many more empty seats.

 
At 6/29/2012 10:36 PM, Blogger Mark J. Perry said...

Scalpers are a sign that either ticket prices are too low OR the number of tickets supplied is too low, relative to the demand, or generally both.

Artists, musicians, or comedians, can increase the number of tickets by: a) performing in larger venues, or b) doing more shows in each city, so that they satisfy the demand.

Maybe musicians should take a lesson from movies, and simply supply enough tickets/shows in each market to satisfy fan demand. Ticket scalping is generally a sure sign that tickets are being under-supplied.

There is generally no scalping of movie tickets, because the theaters supply enough tickets/screens to satisfy demand. If a blockbuster movie played for only one night on one screen in each city, there would be massive scalping.

 
At 6/29/2012 10:42 PM, Blogger Cabodog said...

Good point Mark.

 
At 6/29/2012 11:04 PM, Blogger NormanB said...

Again, if tickets were priced perfectly from the beginning the ordinary scalpers premium above the face value would be a net zero.

With computers and an auction tickets could come very close to being priced perfectly. Hasn't anyone figured this out, yet?

 
At 6/29/2012 11:19 PM, Blogger Pulverized Concepts said...

Scalpers are a sign that either ticket prices are too low OR the number of tickets supplied is too low, relative to the demand, or generally both.

Look at the Minnesota Twins right now. They've had a big season ticket sale in their new ballpark but are in last place in their division and playing poorly. Season ticket holders no longer want to go to every game so they get rid of tickets through resellers or on craigslist. Many of these are bought buy scalpers for much less than face value and then resold for whatever they can get, usually below face value. As it is, the game may have an announced crowd of 35,000+ based on sold tickets but only have 22,000 in the seats. Scalpers probably get rid of a few hundred tickets a game to people that cheer on the team, gobble concessions and guzzle expensive beer. It's a win for everybody.

 
At 6/30/2012 6:47 AM, Blogger JakeW said...

Like Cabodog said, if you don't like the fees, don't pay them. Usually, you have the option of purchasing the ticket directly from the venue in person or through some online seller (Ticketmaster). While I don't like the expensive fees, I'm still willing to pay them because purchasing online allows me to compete from the comfort of my home with the people who camped overnight to be first in line.

 
At 6/30/2012 7:05 AM, Blogger Jon Murphy said...

Like Cabodog said, if you don't like the fees, don't pay them.

That is very true, Jake and Cabodog. However, even buying from venues, you are still buying from Ticketmaster.

You are right, though. If the fees are too much, you can skip.

 
At 6/30/2012 9:10 AM, Blogger Hans said...

Pulverized Concepts, very well informed; Jon Murphy needs a lot of remedial homework...

Mr Rosen, the founder of TM came up with a very simply and clever solution to destroy Ticketron, the leader at that time..

Jack up fees, give part of those fees to the venue in exchange for a monopoly...

As long as consumer continue to think this way "purchasing online allows me to compete from the comfort of my home with the people" TM will continue to operation successfully...

In too many cases, convenience trumps ethical issues...

Even one of our local funeral homes, has added a drive through..

 
At 6/30/2012 10:57 AM, OpenID Sprewell said...

Ticketmaster has exclusivity deals with many venues, which is how they maintain their monopoly. Louis CK confirmed that he couldn't use many venues for his non-Ticketmaster tour because of these exclusivity deals in a recent podcast. No doubt Ticketmaster has to charge high fees on each ticket to get enough money coming in to pay off all the venues to maintain those deals. It would be better if there were more competition for ticket sales, so I wish they'd get away from such an outdated model.

All that said, the Ticketmaster CEO, Hubbard, is an interesting guy: he had a great podcast interview with Bill Simmons late last year. Lots of fascinating info in that podcast, including that attendance at live events is down across the board and he didn't feel it was only because of the recession. He's trying to do some good stuff with auction pricing and claims that Ticketmaster gets a lot of flak for what are really venue policies. In any case, he better get away from that whole exclusivity arrangement, as it's anti-competitive and can't last in the market over time.

 
At 6/30/2012 11:22 AM, Blogger sethstorm said...

Nothing's going to change that the scalpers (read: Not Ticketmaster) are in the wrong for trying to distort the market.

Ticketmaster (and Louis CK by intent) is(are) only pulling all the stops because playing nice doesn't work with scalpers. If you want to blame anyone, it is the scalpers - they have responded unfavorably to measures of good faith & trust - which has required Ticketmaster to play hardball.

Perhaps those anti-scalper provisions weren't so bad after all. The company could afford to be nice within the framework of a law.

 
At 6/30/2012 11:49 AM, Blogger Ron H. said...

"Ticketmaster (and Louis CK by intent) is(are) only pulling all the stops because playing nice doesn't work with scalpers. If you want to blame anyone, it is the scalpers - they have responded unfavorably to measures of good faith & trust - which has required Ticketmaster to play hardball."

And here we have sethstorm defending large corporations against individual entrepreneurs.

And I thought I had seen everything.

 
At 6/30/2012 11:56 AM, Blogger Ron H. said...

NormanB: "With computers and an auction tickets could come very close to being priced perfectly. Hasn't anyone figured this out, yet?"

Yes, everyone except those who sell the tickets.

 
At 6/30/2012 12:15 PM, Blogger Ron H. said...

sethstorm:

I have a question for you: Do you consider your local furniture store owner to be a "scalper" because they buy furniture cheap at the factory and resell it to others at a much higher price?

How about the ice cream man who drives around some neighborhoods playing mind numbing songs over and over? Is he a scalper? After all, his products are available elsewhere at lower prices.

As Cabodog and JakeW have pointed out, no one is forced to buy tickets at prices they don't like.

Neither are they forced to buy from scalpers. If you don't like them, don't buy from them. Of course few people agree with you, as the secondary market for tickets seems to be alive and well.

 
At 6/30/2012 1:10 PM, Blogger Ron H. said...

""And selling something with the proviso that it can't be resold, that it's non-transferable, is a violation of business law as far as I'm concerned."

After further thought, an additional $0.02 worth: A ticket is a license, not a physical something.

For a price, you are granted a license to enter a venue and enjoy (well, at least experience) a performance. The promoters and providers of the event own the rights to it, and grant you some of them for the price of a ticket.

They can, if they choose, insist on certain conditions such as standing on your head during the performance, wearing pajamas, not bringing your own food from outside, or even not transferring the license to someone else. Your choices are to agree to all conditions or not attend.

This is somewhat similar to the license you are granted to drive on a public street if you meet certain requirements, and agree to some restrictions including that you can't transfer your driving privilege to someone else by loaning them your physical license document.

 
At 6/30/2012 1:12 PM, Blogger Ron H. said...

"Nothing's going to change that the scalpers (read: Not Ticketmaster) are in the wrong for trying to distort the market."

If you had even one ounce of economic sense, you wouldn't have written this stupid comment.

 
At 6/30/2012 8:34 PM, Blogger Pulverized Concepts said...

For a price, you are granted a license to enter a venue and enjoy (well, at least experience) a performance. The promoters and providers of the event own the rights to it, and grant you some of them for the price of a ticket.

You make a good point. In reality, for a price you are able to enter a space for a certain amount of time. You're not required to watch or listen to anything. There won't be a test. Ordinarily, there's a guarantee that some advertised activity will take place and if it doesn't there might be a refund or rain check. That's why I'm able to sell a $27 face value ticket up in the rafters for which I paid $10 to someone on the street for $22. The buyer will enter the venue and sit pretty much wherever he wants for less than the cost of just entering the building. Why would management care? They've already been paid full price for the ticket.

 
At 7/01/2012 1:19 AM, Blogger randian said...

Why would management care? They've already been paid full price for the ticket.

That's exactly why I find Ticketmaster's jihad against scalpers so bizarre. Both Ticketmaster and the venue were paid in full by the original purchaser. Why do they care what happens after that? It's not as if they can demand extra cash from the purchaser after the fact.

 
At 7/01/2012 1:23 AM, Blogger Ron H. said...

"They've already been paid full price for the ticket."

They shouldn't care, in fact nobody should care. I've never understood this irrational hatred of scalpers who in reality help pople who would otherwise not get a ticket, and hurt no one except maybe themselves if they make a bad call.

Realizing the bit above, which you quoted, allowed me to understand that it's perfectly legitimate for ticket sellers to set whatever conditions they want on the transferability of a ticket, although it's not clear why they would want to.

Insidently I've also come to understand that the prohibition against shouting "fire!" in a crowded theater is a property rights issue, and not a speech issue at all.

Free speech only applies to speech in public, and doesn't apply to private property.

I have no right to come into your house and shout insults at you, nor can I shout "fire" in a private theater. Doing so infringes the right of the customers to enjoy the performance they expect to experience and for which they bought tickets, and it infringes the owners right to do his business of providing a performance in his private theater.

 
At 7/01/2012 1:28 AM, Blogger Ron H. said...

Jon M:

"I believe Bruce Springsteen and a number of other artists are suing Ticketmaster over the fees. The artists see a very small portion of ticket sales."

Without knowing any more about it than what you have written, I would guess that the artists have no standing to sue Ticketmaster, as their contracts are most likely with the promoters, and not Ticketmaster.

If they are paid what was agreed, I don't see what legitimate complaint they could have? How were they damaged?

 
At 7/01/2012 5:19 AM, Blogger Jon Murphy said...

Ron,
I need to do some research, but I think it is just a general antitrust lawsuit.

 
At 7/01/2012 11:32 AM, Blogger Ron H. said...

Jon M:

I see this item now that I have actually made an attempt to know what I'm talking about. :)

I hope the cure isn't worse than the disease.

This, from the article, isn't encouraging:

"This settlement is a victory for anyone who believe s that companies should be held accountable to consumers," Pascrell (D-8th Dist.) said in a statement. "It is also a vivid reminder of the need for federal oversight of the secondary ticket-selling market."

 
At 7/01/2012 10:37 PM, Blogger Hans said...

I buy most of my tickets from street brokers and most of the time at or below face value...

RonH, you frankly do not understand the theory of supply and demand...

 
At 7/02/2012 1:31 AM, Blogger Ron H. said...

Hans:

"RonH, you frankly do not understand the theory of supply and demand..."

That's funny. On what could you possibly base such an odd claim. I can't wait to hear it.

By the way that's "law of supply and demand" not "theory of supply and demand"

 
At 7/09/2012 12:23 PM, OpenID diggendotcom said...

Very interesting perspective knowing the internal facts about the industry. It seems like deja vu back when the media companies didn't accept the digital future. They lost a tremendous revenue channel, since people went the free approach.

Now artists depend on live events for revenue, but it is ironically happening again. Let's learn from our mistakes and not repeat history. I hope this is solved and we can enjoy concerts again without being disappointed in the purchasing process.

 

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