Friday, August 17, 2012

Ticketmaster Must Be Stopped

Ticketmaster is no stranger to controversy. Often criticized for its outrageous service fees, poor customer service and monopolistic control over the primary ticket industry, the ticketing giant — along with others in the ticket and live event industries — is now threatening to completely eliminate fan ownership of the tickets they buy.

How? By issuing “restrictive paperless tickets” that are non-transferable, and can only be used by the original ticket purchaser, similar to an airline ticket.  What if you get sick or end up having a conflict for a concert or game? Too bad, you would lose the ticket under Ticketmaster’s new policy for some events.

What is Ticketmaster’s motivation? The company already dominates the primary ticket market and is now attempting to elminate the secondary market with its new ticket restrictions.  In my commentary on MLive.com, I argue that when you purchase a ticket to a concert or a game, you should own it. Fortunately, there is legislation pending in both the Michigan House and Senate that would protect free-market competition in the secondary ticket market by banning practices that prohibit fans from transferring, reselling or giving away tickets to family and friends


27 Comments:

At 8/17/2012 4:05 PM, Blogger The Hobbyist said...

Are the purchasers of tickets not free to do business or not with Ticketmaster? Won't the free market eventually take care of such poor business practices?

 
At 8/17/2012 6:27 PM, Blogger PeakTrader said...

A well written article for the masses.

 
At 8/17/2012 6:33 PM, Blogger juandos said...

People who get shafted by Ticket Master deserve the shafting they get...

 
At 8/17/2012 7:52 PM, Blogger Nicolas Martin said...

If you concede that legislation properly corrects this alleged market failure, then Katy bar the door.

 
At 8/17/2012 7:54 PM, Blogger Doug said...

How difficult can it possibly be to create a competing online ticket sale company for events? It'd seem by now there'd be a lot of competition in a natural free market. Are there some intellectual property that Ticketmaster holds that prevent competition?

 
At 8/17/2012 8:09 PM, Blogger Sean said...

Agree, this is sick.

 
At 8/17/2012 9:57 PM, Blogger Ron H. said...

"I suppose one could argue that if you buy a ticket from Ticketmaster, you then agree to the terms of non-transferability. You are the market--you do not have to buy the ticket. By buying the ticket, you agree that you benefit from the transaction, even with the restrictions."

Exactly. You are buying a limited license, not permanent property rights to anything.

 
At 8/18/2012 4:54 AM, Blogger Charles Platt said...

This practice already exists in Las Vegas. I bought tickets to a high-priced magic show online, more than a year ago, and was warned that I had to show up and show identification which matched the ticket. Otherwise, no entry. And no refunds, of course.

 
At 8/18/2012 5:40 AM, Blogger Larry G said...

Is. Professor Perry advocating regulation ?

:-)

 
At 8/18/2012 7:44 AM, OpenID jdcrossevolve.com said...

Agreed with Larry G. It seems like a far superior solution is to start a company that would compete with TMaster by selling tickets that customers actually own in the sense that Mark P would like (and that most people would like). Also, it's almost certainly not the case that consumers of restrictive paperless tickets are being deceived about their non-transferable nature. If they were being deceived, then a proposal to make Ticketmaster more forthcoming would have merit. But simply forcing TMaster to offer a different product seems contrary to what is often written about on this blog.

-JD Cross

 
At 8/18/2012 8:02 AM, Blogger Nicolas Martin said...

Presumably venues contract with Ticketmaster to sell their tickets voluntarily and for reasons that they perceive to be in their interests. If, say, a concert hall believes that it is served by an arrangement that includes non-transferable tickets, what business is it of government? Either our economist is taking the piss out of us, or his faith in the free market is remarkably conditional.

 
At 8/18/2012 8:19 AM, Blogger Jon Murphy said...

Well, this is a discussion of property rights. Who actually owns the ticket.

When you buy a ticket from ticketmaster, do you own the ticket or does that ticket remain the property of ticketmaster?

Dr. Perry's argument is that when the money is exchanged, you therefore own that ticket, the right to enter into the concert hall, and it is then your right to do as you wish with that ticket.

Ticketmaster's argument (and it seems the commentators' argument here as well) is that Ticketmaster fully owns the ticket and only sells the privilege to attend the concert.

Dr. Perry is not being disingenuous or hypocritical. He's just using a different understanding of property rights from you guys.

If you care about my personal opinion, read on.

I agree with Dr. Perry here (probably not in the legislative phase. I'd rather take this issue to court). I feel that, once money exchanges hands, the buyer now owns the property for which he has purchased. One is not renting a ticket, but rather buying it. The act of buying is the transfer of property from one person to another. I do feel it is unconscionable for Ticketmaster to circumvent this ancient piece of common law.

 
At 8/18/2012 8:31 AM, Blogger Larry G said...

re: who owns

if the ticket says "non transferable" and you are informed of that as a condition of the sale - and you have free choice to accept or reject - then are you saying that it's not legal to condition the sale in that way?

 
At 8/18/2012 8:39 AM, Blogger Jon Murphy said...

if the ticket says "non transferable" and you are informed of that as a condition of the sale - and you have free choice to accept or reject - then are you saying that it's not legal to condition the sale in that way?

No, I'm not saying it's illegal. I'm saying it's unconscionable.

 
At 8/18/2012 8:40 AM, Blogger Jon Murphy said...

Rather, I should say I don't think the property rights in this situation are clearly defined.

 
At 8/18/2012 8:44 AM, OpenID Sprewell said...

Jon, I completely disagree. Common law is irrelevant because that was an entirely different time, when authentication and other mechanisms were not available. These companies are not selling "tickets" as you knew them anymore, they are selling you a provisional license to sit in that seat. They are perfectly within their rights to put whatever provisions they want in that contract, just as you are perfectly within your rights not to buy that license. This new form of "ticket license" loses value if you cannot sell it on the secondary market, so economics tells us that the price will fall, because that insurance of being able to resell your ticket won't be there anymore. Ticketmaster is not stupid; they don't intend to get rid of secondary markets altogether, they just want to get cut into that market also.

Their CEO said as much in a great podcast last year, when he pointed out that Ticketmaster allows NFL tickets to be resold on their own secondary ticket exchange, where they take a cut of the resulting price. I think the real issue here is that Ticketmaster has such a stranglehold on this market, but passing a law to force them to only sell tickets in a certain way, as Mark seems to be proposing, is certainly not the solution. The market is perfectly capable of dealing with this issue, and it will route around Ticketmaster if that's what customers truly want. As I pointed out a couple months ago, Louis CK is already cutting Ticketmaster out of his next comedy tour. Their position is much more fragile than you would think, especially if you listen to their CEO in that podcast, as he himself admits they are behind the times.

 
At 8/18/2012 11:27 AM, Blogger Sean said...

They are perfectly within their rights to put whatever provisions they want in that contract, just as you are perfectly within your rights not to buy that license.
Of course they are. But there is what is legal, and what is good. Ticketmaster has a right to do what they wish, and we have a right to converse among ourselves, complain, and otherwise recognize the greatly diminished value of a non-transferable ticket. :)

 
At 8/18/2012 11:32 AM, Blogger Larry G said...

we have a right to converse among ourselves, complain, and otherwise recognize the greatly diminished value of a non-transferable ticket


but do we have the right to use govt to regulate it?

 
At 8/18/2012 12:51 PM, Blogger sethstorm said...

Hopefully that scalper-protection legislation fails. To prohibit the restriction in the name of "free markets" is something that goes against its own purpose.

Ticketmaster is only taking a measure that will work - since other policies have resulted in unwanted circumvention. Perhaps this will create additional room for actual attendees - since scalpers can't buy out a venue and then hide behind the "sick individual" or "schedule conflict" excuses.

The fans never owned the ticket in whole, they simply bought a license to attend an event - with terms that they agreed to abide when buying said license. Perhaps reading the fine print would do well for people that want to blindly defend indefensible scalpers.

The ideal scenario is where anti-scalping laws are restored, but at least Ticketmaster has it right.

 
At 8/18/2012 12:58 PM, Blogger juandos said...

"Is. Professor Perry advocating regulation ?"...

Did you see anything at all in the posting calling for government interference larry g?

 
At 8/18/2012 1:36 PM, Blogger Larry G said...

Did you see anything at all in the posting calling for government interference larry g?



"Ticketmaster Must Be Stopped"

"Fortunately, there is legislation pending in both the Michigan House and Senate that would protect free-market competition"

bonus question:

what if another company did challenge Ticketmaster but Ticketmaster either bought them out or engaged in a price way to drive the other company out of business.

Would that still be an unfettered free market that did not warrant legislation or regulation?

 
At 8/18/2012 1:45 PM, Blogger Costa Vesos said...

"Ticketmaster Must Be Stopped"

If it must the market will stop it. The last thing that we need are more idiots in Congress to intervene.

 
At 8/18/2012 1:47 PM, Blogger Costa Vesos said...


Did you see anything at all in the posting calling for government interference larry g?

I did. So did larry. And I suspect that you did too. In case you missed it:

Fortunately, there is legislation pending in both the Michigan House and Senate that would protect free-market competition in the secondary ticket market by banning practices that prohibit fans from transferring, reselling or giving away tickets to family and friends.

Seems pretty clear.

 
At 8/18/2012 4:29 PM, Blogger Ron H. said...

"As I pointed out a couple months ago, Louis CK is already cutting Ticketmaster out of his next comedy tour."

And that is the whole issue. Artists, promoters and venues enter into exclusive agreements with Ticketmaster for the benefits they gain from that agreement.

If they chose to sell tickets in some other manner or through some other agency, the Ticketmaster problem wouldn't exist.

As all the private actors involved are free to do as they wish, consumers can register their dissatisfaction by NOT buying tickets at prices and under conditions they don't like.

 
At 8/18/2012 4:51 PM, Blogger Ron H. said...

Jon M:

"When you buy a ticket from ticketmaster, do you own the ticket or does that ticket remain the property of ticketmaster?"

When you buy a ticket you are buying a license. You are granted certain rights and agree to certain restrictions, and what you "own" is clearly spelled out - hopefully.

Most licenses are restricted in various ways, including restrictions on transferability. Your drivers license isn't transferable. Your fishing license isn't transferable. When you buy a book or CD you own the physical media, but not the story or music it contains.

Although it's beyond understanding why anyone (other than Ticketmaster) would want to restrict a secondary market in tickets, if it's a condition of the license, then our choice is to not buy the ticket.

I'm not advocating obeying the rules here, mind you, and I'm a big fan of scalpers, I'm only defending the right of the ticket issuer to place whatever idiotic restrictions they wish on the license they grant.

 
At 8/18/2012 5:04 PM, Blogger Ron H. said...

"Hopefully that scalper-protection legislation fails."

This is almost certainly a first:

I agree with sethstorm on this, but for different reasons.

 
At 8/20/2012 10:02 AM, Blogger Its GSATT said...

"Did you see anything at all in the posting calling for government interference larry g?

I did. So did larry. And I suspect that you did too. In case you missed it:

'Fortunately, there is legislation pending in both the Michigan House and Senate that would protect free-market competition in the secondary ticket market by banning practices that prohibit fans from transferring, reselling or giving away tickets to family and friends.'

Seems pretty clear."




I have been following this blog for a relatively short time, but i have been able to pick up that Dr. Perry enjoys sarcasm. When he said "Fortunately", I'd be willing to bet he was rolling his eyes about the legislature.

Let Ticketmaster hang themselves with this. This sounds like such a horrible business plan that I suspect their is "legislature" trying to force them to staple their tickets to customers Identification.

 

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