Ticketmaster Sued in Canada for Scalping Tickets to Shows(bloomberg.com)
bloomberg.com
Ticketmaster Sued in Canada for Scalping Tickets to Shows
http://www.bloomberg.com/apps/news?pid=20601082&sid=au_YrzyUh7NY&refer=canada
4 comments
I think that's where things will eventually be, but the ticket industry moves very very slow. For sports, teams often sell tickets below market price for cash flow purposes. Season ticket holders often have to pay the entire balance upfront before the season even starts and independent of the team's performance. Also, if face value goes up too high their can be (and has been) a fan and media backlash. Also, many stadium agreements are set up so that a team makes more money from merchandise & concessions than ticket proceeds. In the NFL, if you don't sell out you run the risk of TV blackout; this also causes downward pressure on prices.
Concert tickets are a different beast since bands don't acquire win & loss records, but the public perception of face value still applies. During the season, prices can vary dramatically based on how good a team is playing. For example, Lions and Rams tickets we're going for $5 by season end. However, this almost never happens with bands on tour unless they require a reputation for sucking live. Also, what Ticketmaster doesn't make very public is that they often split their "convenience fees" with the artist.
Concert tickets are a different beast since bands don't acquire win & loss records, but the public perception of face value still applies. During the season, prices can vary dramatically based on how good a team is playing. For example, Lions and Rams tickets we're going for $5 by season end. However, this almost never happens with bands on tour unless they require a reputation for sucking live. Also, what Ticketmaster doesn't make very public is that they often split their "convenience fees" with the artist.
Thanks, that gives some insight. The argument for sports tickets is quite convincing, I didn't realize all the factors that were involved.
I'm still not sold on the public-backlash argument for performers though. Couldn't price targeting reduce the public backlash? Eg. charge $50 for a limited number of tickets 3 months in advance, when the die hard, starving-college-student fans are ready to buy tickets, and $200 to the investment banker who buys tickets for his kid at the last minute.
Maybe I'm over-simplifying things, or over-estimating the money the scalpers are making.
I'm still not sold on the public-backlash argument for performers though. Couldn't price targeting reduce the public backlash? Eg. charge $50 for a limited number of tickets 3 months in advance, when the die hard, starving-college-student fans are ready to buy tickets, and $200 to the investment banker who buys tickets for his kid at the last minute.
Maybe I'm over-simplifying things, or over-estimating the money the scalpers are making.
Agreed. The case is much more clear cut for sports than it is for concerts. What you're talking about exists in the form of presale passwords:
http://ticketstumbler.com/blog/presale-passwords-faqs/
Presale passwords allow fans to gain access to tickets before the public sale. However, scalpers can pretty easily acquire them and the sales limits aren't very hard to game. What does tend to happen though is that the investment banker type (is that reference even valid anymore? :-D) can buy his tickets on the secondary market at the last minute from TicketsNow, which Ticketmaster owns, and sometimes the artist receives a cut of those proceeds. To people on Hacker News, market prices makes a lot of sense, but in practice they scare a lot of people away. Fixed prices are why Ebay acquired Half.com & Stubhub. And it's why places that deal with futures or more complex purchasing options like First Dibz have blown through loads of cash without gaining much traction; the people behind those sites aren't the target market.
What's also interesting is that artists tend to make more money from tours than CDs, merchandise, itunes, etc (as the label gets a significantly larger cut of the latter). So maybe there's some behind the scenes pressure to ensure sellouts and drive the type of sales that benefit the label most.
One final thought: if an artist becomes really hot (like the Flight of the Conchords currently) shows can be added...double or tripling supply in a given metropolitan area. The same thing cannot be done with sports.
http://ticketstumbler.com/blog/presale-passwords-faqs/
Presale passwords allow fans to gain access to tickets before the public sale. However, scalpers can pretty easily acquire them and the sales limits aren't very hard to game. What does tend to happen though is that the investment banker type (is that reference even valid anymore? :-D) can buy his tickets on the secondary market at the last minute from TicketsNow, which Ticketmaster owns, and sometimes the artist receives a cut of those proceeds. To people on Hacker News, market prices makes a lot of sense, but in practice they scare a lot of people away. Fixed prices are why Ebay acquired Half.com & Stubhub. And it's why places that deal with futures or more complex purchasing options like First Dibz have blown through loads of cash without gaining much traction; the people behind those sites aren't the target market.
What's also interesting is that artists tend to make more money from tours than CDs, merchandise, itunes, etc (as the label gets a significantly larger cut of the latter). So maybe there's some behind the scenes pressure to ensure sellouts and drive the type of sales that benefit the label most.
One final thought: if an artist becomes really hot (like the Flight of the Conchords currently) shows can be added...double or tripling supply in a given metropolitan area. The same thing cannot be done with sports.
It's becoming more common lately for artists to sell tickets with very high face values: Jay-Z's recent concert in DC had the majority of tickets selling for $500 and balcony tickets for $375, which was slightly over the secondary market price. Elton John and Billy Joel's upcoming tour have tickets going for $200 and $100.
But the main reason is risk management -- why take a risk with high priced tickets when you can be sure that the scalpers can guarantee you a sellout at the profit margin you're comfortable with? As fallentimes says, audience perception goes into it also -- Bruce Springsteen sells his tickets for about $100 which is well under market for an artist that appeals to an older crowd. He probably thinks he is doing his fans a favor.
But the main reason is risk management -- why take a risk with high priced tickets when you can be sure that the scalpers can guarantee you a sellout at the profit margin you're comfortable with? As fallentimes says, audience perception goes into it also -- Bruce Springsteen sells his tickets for about $100 which is well under market for an artist that appeals to an older crowd. He probably thinks he is doing his fans a favor.
The thing I don't like about the risk management argument is that aren't these performances usually put on by major labels? Or is it the venue that is taking the risk?
If it is a large label that puts it on, they already have a "diverse portfolio" in some sense, so if one show bombs they can rely on others to balance it out. Even if they do need to manage risk, surely there is a more efficient way to do it?
Maybe you're right and it is the result of benevolence on the part of the artist.
If it is a large label that puts it on, they already have a "diverse portfolio" in some sense, so if one show bombs they can rely on others to balance it out. Even if they do need to manage risk, surely there is a more efficient way to do it?
Maybe you're right and it is the result of benevolence on the part of the artist.
Because if they didn't agree to what ticketmaster wants - ticketmaster will boycott them band/venue. Good luck setting up your own ticker sales site and agreeing deals with every other venue/band.
Between this, the rumored Livenation merger (hi antitrust!) and plummeting disposable income, Ticketmaster/Ticketsnow is in for a world of hurt.
Ticketmaster has such a terrible user experience, we don't even include them in our site listings (blog only) although we do include Ticketsnow. What is sort of funny: out of all the TicketStumbler ticket providers, they've been the most helpful.
Ticketmaster has such a terrible user experience, we don't even include them in our site listings (blog only) although we do include Ticketsnow. What is sort of funny: out of all the TicketStumbler ticket providers, they've been the most helpful.
I was wondering if you'd drop by and comment on this post. It's only fitting.
Can't wait for that creative destruction to come about.
Can't wait for that creative destruction to come about.
> plummeting disposable income
Actually spending on entertainment and culture has tended to do well in previous downturns - even severe downturns. Its another escape that gets a boost like alcohol, tobacco, gambling etc.
Actually spending on entertainment and culture has tended to do well in previous downturns - even severe downturns. Its another escape that gets a boost like alcohol, tobacco, gambling etc.
In this case, it hasn't been true. Teams are really hurting.
According to this anecdotal radio report cultural spending in Europe is trending up (live performances, exhibitions) while other forms of discretionary spending (especially eating out) is dropping. The claim was this was expected and in line with previous downturns. The only U.S. discussion was during the intro with the old standby of the rise of movie houses and Hollywood during the depression. There was no discussion of sporting events.
[piece begins at 15:25] http://podcast.cbc.ca/mp3/twtw_20090208_11769.mp3
[piece begins at 15:25] http://podcast.cbc.ca/mp3/twtw_20090208_11769.mp3
NBA, NFL, MLB, NASCAR, Broadway:
http://www.usatoday.com/sports/basketball/nba/2008-10-13-nba...
http://nbcsports.msnbc.com/id/28141796/
http://bats.blogs.nytimes.com/2008/12/08/layoffs-at-mlbcom/
http://www.newsobserver.com/business/story/1297679.html
http://www.ticketnews.com/Broadway-ticket-sales-remain-slow-...
The real test for concerts will come in the summer.
http://www.usatoday.com/sports/basketball/nba/2008-10-13-nba...
http://nbcsports.msnbc.com/id/28141796/
http://bats.blogs.nytimes.com/2008/12/08/layoffs-at-mlbcom/
http://www.newsobserver.com/business/story/1297679.html
http://www.ticketnews.com/Broadway-ticket-sales-remain-slow-...
The real test for concerts will come in the summer.
I cannot tell you how happy I am to finally see Ticketmaster under the gun for this. Over the summer when Radiohead came to Toronto, it was literally seconds before Ticketmaster was "sold out" and redirecting users to TicketNow for tickets at over double face value.
I was one of the lucky few to get tickets directly from Radiohead at a pre-sale a few weeks before.
It is absolutely wrong for Ticketmaster, who has control over probably 95% of the tickets for every show, to turn around and sell them for double the price. It's a conflict of interest, and makes some shows prohibitively expensive. Ticketmaster is scum.
I was one of the lucky few to get tickets directly from Radiohead at a pre-sale a few weeks before.
It is absolutely wrong for Ticketmaster, who has control over probably 95% of the tickets for every show, to turn around and sell them for double the price. It's a conflict of interest, and makes some shows prohibitively expensive. Ticketmaster is scum.
Ontario and similar jurisdictions cannot hold back the tide of secondary ticket markets. The internet prevents it. Consumers who want tickets to sold out shows will find a way and the web will help them to do it. TicketsNow does not even come close to dominating the secondary market.
Hacker News?
Yes because 2 YC startups sell tickets. Therefore any legal issues regarding activity of such is important.
I didn't flag the article as inappropriate because I was asking why it was relevant. Thank you for taking the time to explain - it wasn't immediately clear.
And hopefully it's interesting as well :).
The closest I've come to a reasonable explanation was in the Armchair Economist, but I remain unconvinced that they wouldn't be better off selling tickets at a higher price or engaging in some sort of price-targeting.