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Freakonomics did a great deep dive [0] into the complexity of ticket markets. The short of it is that incentives are mixed and spread through the following part

Freakonomics did a great deep dive [0] into the complexity of ticket markets. The short of it is that incentives are mixed and spread through the following parties: sellers, venues, promoters, artists, and fans. Artists don’t want to look like they gouge their fans. Promoters take a cut and need to hit volume milestones. Fans want access, and are willing to pay extra. [0] - http://freakonomics.com/podcast/live-event-ticket-market-screwed/ http://freakonomics.com/podcast/live-event-ticket-market-scr...

jrockway 8y ago
It's kind of unfortunate. I am perfectly willing to allow the artist to gouge me. If 2000 people want to see the concert and there are 1000 seats, what choice do they have? Sure, next time book a bigger venue, but this time... you just have to let people bid on the tickets and sell them to the 1000 highest bidders. I feel like I've always gotten a good deal on the secondary market. Every so often I am in Japan in late August and like to attend a 3 day anime song concert. The tickets are sold way in advance, and are $60 (ish) for a randomly selected seat in Saitama Super Arena. This means your $60 may get you a front row seat or one on the upper balcony behind a pillar, you don't know. And you have to physically buy the thing from a convenience store in Japan 6 months in advance. So the primary market is just bad. I end up just buying tickets on Yahoo Auctions and for $200 I get a front row seat. Would I have been just as happy to give that $200 directly to the people running the event? Yup! But they don't let me, so they lose out on $240. Multiply that by thousands of tickets sold, and you wonder whether or not any of these people ever attended business school. Similarly, you can get reverse gouged on unpopular events. My brothers are big basketball fans. Whenever they visit New York, we go see the Nets play. The Nets are historically terrible and never fill up the arena, but apparently they sell a lot of tickets for corporate events. These tickets end up on the secondary market for reasonable prices, and that's what I buy. The list price can be something like $1000 and yet we buy them for $100. (I also enjoy the banter with the coworkers of the people that sold us their tickets. Every time, it's "I can't believe so-and-so sold their tickets!" But people are drinking and you can't take yourself too seriously and be a Nets fan, so it's all in good fun.) Anyway, kind of wandered off topic... but the only way to make demand meet supply is to gouge people, so that supply falls to exactly meet demand. The artist deserves the money, not middlemen.
- cortesoft 8y ago
  Right? This whole thing comes down to the most basic of economic questions: "How do we distribute a scarce resource where demand is greater than supply?" We have an amazing system for this - a market. Why don't we just accept that price is based on supply and demand and let the market (secondary markets included) determine the price freely.
  - medell 8y ago
    Some artists want their concerts to be accessible. Not every creator is in the maximizing profit mindset.
    - kbenson 8y ago
      So? If artists want to control the experience perfectly, don't sell on an open market. There are ways to prevent the majority of resale (will call, purchasing credit card required at gate, etc). If artists really care, they would do more than lip service (some do!). When they don't, the message is clear. They might care, but they care about money more, because let's be clear, brokers buying out a venue within a day that might take a few months to sell out is good for the artist, promoter and venue. They get to offload risk to a broker, for the cost of possibly some more money in the long run, and they get all their money up front and can do what they want with it for that time.
      - jtmcmc 8y ago
        Uh there are many reasons. Artists desires are typically mediated through a promoter or a promoter and a venue and the contractual obligations of both. For instance if the only appropriate sized venue is a live nation venue then you're using ticketmaster! if it's one that has an exclusive contract with ticketmaster same thing. You often can't just "get a different venue" because for various sizes of venue there are only so many in a city, even fewer that are correct for your show, and that are available.
        8y ago

jrockway 8y ago

It's kind of unfortunate. I am perfectly willing to allow the artist to gouge me. If 2000 people want to see the concert and there are 1000 seats, what choice do they have? Sure, next time book a bigger venue, but this time... you just have to let people bid on the tickets and sell them to the 1000 highest bidders. I feel like I've always gotten a good deal on the secondary market. Every so often I am in Japan in late August and like to attend a 3 day anime song concert. The tickets are sold way in advance, and are $60 (ish) for a randomly selected seat in Saitama Super Arena. This means your $60 may get you a front row seat or one on the upper balcony behind a pillar, you don't know. And you have to physically buy the thing from a convenience store in Japan 6 months in advance. So the primary market is just bad. I end up just buying tickets on Yahoo Auctions and for $200 I get a front row seat. Would I have been just as happy to give that $200 directly to the people running the event? Yup! But they don't let me, so they lose out on $240. Multiply that by thousands of tickets sold, and you wonder whether or not any of these people ever attended business school. Similarly, you can get reverse gouged on unpopular events. My brothers are big basketball fans. Whenever they visit New York, we go see the Nets play. The Nets are historically terrible and never fill up the arena, but apparently they sell a lot of tickets for corporate events. These tickets end up on the secondary market for reasonable prices, and that's what I buy. The list price can be something like $1000 and yet we buy them for $100. (I also enjoy the banter with the coworkers of the people that sold us their tickets. Every time, it's "I can't believe so-and-so sold their tickets!" But people are drinking and you can't take yourself too seriously and be a Nets fan, so it's all in good fun.) Anyway, kind of wandered off topic... but the only way to make demand meet supply is to gouge people, so that supply falls to exactly meet demand. The artist deserves the money, not middlemen.

cortesoft 8y ago
Right? This whole thing comes down to the most basic of economic questions: "How do we distribute a scarce resource where demand is greater than supply?" We have an amazing system for this - a market. Why don't we just accept that price is based on supply and demand and let the market (secondary markets included) determine the price freely.
- medell 8y ago
  Some artists want their concerts to be accessible. Not every creator is in the maximizing profit mindset.
  - kbenson 8y ago
    So? If artists want to control the experience perfectly, don't sell on an open market. There are ways to prevent the majority of resale (will call, purchasing credit card required at gate, etc). If artists really care, they would do more than lip service (some do!). When they don't, the message is clear. They might care, but they care about money more, because let's be clear, brokers buying out a venue within a day that might take a few months to sell out is good for the artist, promoter and venue. They get to offload risk to a broker, for the cost of possibly some more money in the long run, and they get all their money up front and can do what they want with it for that time.
    - jtmcmc 8y ago
      Uh there are many reasons. Artists desires are typically mediated through a promoter or a promoter and a venue and the contractual obligations of both. For instance if the only appropriate sized venue is a live nation venue then you're using ticketmaster! if it's one that has an exclusive contract with ticketmaster same thing. You often can't just "get a different venue" because for various sizes of venue there are only so many in a city, even fewer that are correct for your show, and that are available.
      - 8y ago