10 ms·

For his shows, C.K. saw scalping rates as high as 25%, driving up the price of his shows for people who wanted to attend, by those who didn’t. The only people

by mhartl 14y ago

For his shows, C.K. saw scalping rates as high as 25%, driving up the price of his shows for people who wanted to attend, by those who didn’t. The only people driving up the price of the shows are people who want to attend. How could it be otherwise? People who don't want to go to the show certainly don't raise prices. If scalpers can profit, it means you aren't charging market price. Policies like the one described in the OP simply shoot the messenger. If the market price is too high for some fans, have a lottery with an aftermarket. Once they see the market price, low-income lottery winners can decide whether they'd rather attend the show or sell the tickets to pay the rent. It's not like these issues haven't been studied before. Do a few web searches, or consult an economist. If you don't accept that your naive economic intuition is wrong, you're going to make stupid decisions that often exacerbate the very problems you're trying to solve. (I'm looking at you, Burning Man.)

Androsynth 14y ago
yeah I'm confused, isn't scalping a necessary side effect of the process? It seems natural if you sell tickets at a constant price over time and don't adjust that for higher demand (as event gets closer in time) or lower supply (as tickets are sold). Also, is scalping a bad thing? It seems to me that they are making the market more efficient.
- AndrewDucker 14y ago
  Market efficiency is not necessarily a person's aim.
  - Androsynth 14y ago
    Leaving money on the table does no one any favors. If people are willing to pay $150 for tickets and hes charging $50 (or whatever it is), he's only doing himself a disservice. If people are willing to pay that much and he delivers a show that is up to his normal standard, they won't hate him for charging them that much; quite the opposite actually. It's only the price gauging and poor service of monopolies that people tend to hate (and for good reason). Now, if you are saying 'what about the people who cant afford $150 for tickets?'. If it's not a charity show, the world definitely does not owe you tickets to a stand-up comedy show. On the other hand, charity shows are fine, but he should call it like it is if thats the case. $50 for tickets means the rich will pay less than theyre willing to pay and the poor won't get in anyways. No one wins in that situation.
    - fusiongyro 14y ago
      > he's only doing himself a disservice. How precisely is the scalper, by increasing costs and adding _no value_ doing us a service?
      - jbooth 14y ago
        By increasing liquidity!!
      - Androsynth 14y ago
        Just because he is doing himself a disservice doesn't mean the scalpers are doing us a service.
        fusiongyro 14y ago
        As worded it is implied that the scalper is doing _somebody_ a service, and I disagree with that.
        philwelch 14y ago
        If they weren't doing anyone a service, they wouldn't make money.
        masklinn 14y ago
        Of course they don't and still do: through speculation, they're artificially taking control of the supply allowing them to re-set its price point without providing value. The tickets would sell all the same through the original provider at the original price, they just inserted themselves between the producer and the consumer (usually through brute-forcing the producer's ordering scheme) in order to extract wealth from the consumer. That's parasitism.
        philwelch 14y ago
        That's pretty much impossible. If the market clearing rate is face value, scalping tickets for more than that wouldn't be viable. Do you think running a corner store is "parasitism"?
- potch 14y ago
  If the only factor in your market's efficiency is price charged, then this is true. The real market has other factors like satisfaction/willingness to repeat a transaction (for both sides of the party), opportunities for disruption of your market (exacerbated by said dissatisfaction), and (gasp!) goodwill of parties in a transaction. If you're optimizing just the ledger numbers in your industry, you might make a buck, but you're setting yourself up for hatred and being toppled by a newcomer who customers actually like.
  - Androsynth 14y ago
    Higher prices dont necessarily breed hate in your customers. As long as people see that they are getting what they are paying for, they come out happy. It's the situations where they feel like they are getting screwed, or have too many restrictions, etc. Those generally come about because the market is not efficient, eg ticketmaster.
- joezydeco 14y ago
  Scalping confuses demand. If 1000 people want to see a show in a theatre with 1000 seats, that would be an ideal market. But in reality you get 2000 people trying to buy tickets for that show. 1000 are the fans and 1000 are people trying to buy the tickets to flip them for a profit. The artificial demand creates a market that benefits nobody except the scalpers. The fan loses by paying higher prices, and the artist loses (sometimes) by leaving money on the table. This is why Madonna and the Eagles are charging $750 for front row seats.
  - Androsynth 14y ago
    But if the customers are willing to pay the scalpers price, that means the demand exists. You say 'flip them for profit' as if thats a bad thing, but as long as people buy those tickets, its just smoothing out the market.
    - drivingmenuts 14y ago
      This is the artist himself saying that he'd rather have true fans in the seats at a reasonable price, rather than have the tickets snapped up by the asshole with the biggest wallet (not sorry for editorializing, that's the politest version of my view of scalpers). The add-on effect he's looking for is fan retention over time. If 500 people bought from a scalper at some much higher price, there's a small chance that they will become disgruntled and stop being fans. In the long term, he could lose that business. But if he himself levels out the market, the fans have less to lose. Sure, the artist takes a hit, but that's on him. He can always do something different next time if he's dissatisfied with his revenue. Remember that this is a guy who made so much money the last time, that he was somewhat nervous. I don't think he's thinking about it the same way you are. As for "not doing anyone any favors": way I see it, he's doing his fans a favor by keeping the ticket prices affordable.
      - Androsynth 14y ago
        So true fans are poor? What does having a fatter wallet have to do with your taste in comedy? Also, fans don't work the way you think they do. If I like Louis CK, I like Louis CK. If he chooses to charge $500 for a ticket, I will just watch him on TV. It won't cause me to resent him. In a perfect market, if enough people feel the same way, the price will drop down into the range that I am comfortable paying. If, on the other hand, he has so many fans that some are willing to pay exorbitant amounts to see him live, I will be forced to watch him on TV. If he wants to give everyone (rich and poor) the chance to experience his set live, he needs to increase supply by touring more.
- pyoung 14y ago
  The SF Giants use a variable ticket pricing scheme that seems to be pretty successful. It adjusts the price of tickets based on projected demand. This probably does a pretty good job at eating into scalpers profits (although not entirely). Of course baseball ticket demand is a lot more predictable due to the fact that their are ~80 home games a season. It would be interesting to see if there was any way to implement a similar system for concerts and shows.
  - joezydeco 14y ago
    Trent Reznor had some thoughts on that: "My guess as to what will eventually happen if / when Live Nation and TicketMaster merges is that they'll move to an auction or market-based pricing scheme - which will simply mean it will cost a lot more to get a good seat for a hot show. They will simply BECOME the scalper, eliminating them from the mix." http://forum.nin.com/bb/read.php?59,548515 http://forum.nin.com/bb/read.php?59,548515
    - res0nat0r 14y ago
      I think is partially already in place? Ticketmaster now allows users to resell their tickets via their website: http://www.ticketmaster.com/ticketexchange/ http://www.ticketmaster.com/ticketexchange/
- rmc 14y ago
  Also, is scalping a bad thing? It seems to me that they are making the market more efficient. It might make the market more effecient. But it annoys your customers.
drcube 14y ago
Explain the Burning Man comment please. I'm involved in the local Burners scene, but I've never been to the the big one in Black Rock City. My wife is going this year with a friend, but she was gifted a ticket. So I would like to know what stupid decisions and exacerbated problems I will see if I decide to buy a ticket for next year's burn. Thanks.
- blhack 14y ago
  The bmorg completely disenfranchised large parts of the community with a "ticket lottery". Earlier this year, we were seeing theme camps with something like 10% "success" rate in the lottery, and a lot of the major camps weren't going to be able to go. It was only through a last-ditch effort, cancelling a second lottery and giving the tickets to "established" camps that they were able to get some of the major theme camps to go. The lottery played heavily in the favor of scalpers, who very obviously exploited it to their own gain, and this was something that the community had been screaming up and down about since the lottery was announced last year.
  - mhartl 14y ago
    It's not the scalpers who are to blame. It's bmorg (and the broader Burner community) that's at fault for ignoring basic economics and human behavior. Everyone with a rudimentary understanding of game theory saw the whole mess coming a mile away.
    - blhack 14y ago
      The broader burner community (hi!) were the ones screaming at the borg that this was a terrible idea. They didn't care.
      - mhartl 14y ago
        Some screamed about the lottery, but capping secondary sales at face value is a deeply entrenched (and, in my view, terribly misguided) part of Burner culture.
maxerickson 14y ago
Louis C.K. is attempting to transfer the benefit from the messenger to people that actually plan on attending the show. He is apparently happy to suffer the market inefficiency that leads to his fans seeing cheaper ticket prices.
warfangle 14y ago
Problem with scalpers is they reduce the supply of the tickets endemically, thus driving the market price up. If the scalpers aren't involved at all, the market price is lower than the scalped price.
- mhartl 14y ago
  The scalpers are the market-makers. If there were an official market, the scalpers would be out of business overnight.
  - masklinn 14y ago
    > The scalpers are the market-makers. So what? They're not adding any value in the equation, they're just parasitically extracting wealth from all other entities. What's the point of that from a social perspective?
    - nooneelse 14y ago
      Indeed. And what is the incentive for an artist to allow his/her fans to have their wealth extracted by a third party? None. It only makes the fans less able to buy things from the artist in the future. Louis C.K. is cultivating/nurturing his fans like a gardener cultivates/nurtures a plant. That clearly includes not letting insects eat the leaves off of a plant one intends to get an ongoing crop from.
      - ionforce 14y ago
        The incentive is to allow a specific sect of well-to-do fans access to his show that they didn't get otherwise. Whether or not you agree with that incentive is entirely separate.
        nooneelse 14y ago
        I still don't see how that is an incentive to allow a third party to extract anything from the transaction. He could run an auction for tickets himself to satisfy that desire (if he had it).
diek 14y ago
You're operating on the flawed assumption that the sole endeavor here is to extract as much money from consumers as possible. If $45 a ticket allows Louis C.K. to make a tidy profit while still being affordable for his fans, but a third party buys all the tickets and resells them for $55... sure, some of his fans may shrug and say, "Well, I guess $55 isn't too bad" (price elasticity, etc, etc)... but why would Louis C.K. enable that behavior?
- mhartl 14y ago
  You're operating on the flawed assumption that the sole endeavor hear is to extract as much money from consumers as possible. No, that's why you have an initial lottery. With a lottery, poorer fans still have a chance to get a ticket.
  - timbre 14y ago
    A lottery doesn't seem to me to do anything but mitigate the benefit of fancy redialers or other automated ways of getting your ticket order in first. With or without a lottery, allowing resale for profit gives people willing to pay more a better shot at seeing the performance. Preventing it means everyone who's willing to pay the set price has an equal shot. I've always assumed that's the goal of anti-scalping schemes.
Uchikoma 14y ago
Not if people who have no plan to attend buy significant amounts of tickets to corner the market.
ghshephard 14y ago
I didn't really understand BMORG's response to a ticket shortage - Lotteries play right into the scalper strength - the ability to file lots and lots of requests with different credit cards. I only had three active credit cards, so I could only enter the lottery three times (I didn't get a ticket this year) - but scalpers have a whole catalogue of credit cards and addresses to purchase tickets with. They must have been chuckling with glee when they saw the system this year.

by mhartl 14y ago

Androsynth 14y ago

yeah I'm confused, isn't scalping a necessary side effect of the process? It seems natural if you sell tickets at a constant price over time and don't adjust that for higher demand (as event gets closer in time) or lower supply (as tickets are sold). Also, is scalping a bad thing? It seems to me that they are making the market more efficient.

AndrewDucker 14y ago
Market efficiency is not necessarily a person's aim.
- Androsynth 14y ago
  Leaving money on the table does no one any favors. If people are willing to pay $150 for tickets and hes charging $50 (or whatever it is), he's only doing himself a disservice. If people are willing to pay that much and he delivers a show that is up to his normal standard, they won't hate him for charging them that much; quite the opposite actually. It's only the price gauging and poor service of monopolies that people tend to hate (and for good reason). Now, if you are saying 'what about the people who cant afford $150 for tickets?'. If it's not a charity show, the world definitely does not owe you tickets to a stand-up comedy show. On the other hand, charity shows are fine, but he should call it like it is if thats the case. $50 for tickets means the rich will pay less than theyre willing to pay and the poor won't get in anyways. No one wins in that situation.
  - fusiongyro 14y ago
    > he's only doing himself a disservice. How precisely is the scalper, by increasing costs and adding _no value_ doing us a service?
    - jbooth 14y ago
      By increasing liquidity!!
    - Androsynth 14y ago
      Just because he is doing himself a disservice doesn't mean the scalpers are doing us a service.
      - fusiongyro 14y ago
        As worded it is implied that the scalper is doing _somebody_ a service, and I disagree with that.
        philwelch 14y ago
        If they weren't doing anyone a service, they wouldn't make money.
        masklinn 14y ago
        Of course they don't and still do: through speculation, they're artificially taking control of the supply allowing them to re-set its price point without providing value. The tickets would sell all the same through the original provider at the original price, they just inserted themselves between the producer and the consumer (usually through brute-forcing the producer's ordering scheme) in order to extract wealth from the consumer. That's parasitism.
        philwelch 14y ago
        That's pretty much impossible. If the market clearing rate is face value, scalping tickets for more than that wouldn't be viable. Do you think running a corner store is "parasitism"?
potch 14y ago
If the only factor in your market's efficiency is price charged, then this is true. The real market has other factors like satisfaction/willingness to repeat a transaction (for both sides of the party), opportunities for disruption of your market (exacerbated by said dissatisfaction), and (gasp!) goodwill of parties in a transaction. If you're optimizing just the ledger numbers in your industry, you might make a buck, but you're setting yourself up for hatred and being toppled by a newcomer who customers actually like.
- Androsynth 14y ago
  Higher prices dont necessarily breed hate in your customers. As long as people see that they are getting what they are paying for, they come out happy. It's the situations where they feel like they are getting screwed, or have too many restrictions, etc. Those generally come about because the market is not efficient, eg ticketmaster.
joezydeco 14y ago
Scalping confuses demand. If 1000 people want to see a show in a theatre with 1000 seats, that would be an ideal market. But in reality you get 2000 people trying to buy tickets for that show. 1000 are the fans and 1000 are people trying to buy the tickets to flip them for a profit. The artificial demand creates a market that benefits nobody except the scalpers. The fan loses by paying higher prices, and the artist loses (sometimes) by leaving money on the table. This is why Madonna and the Eagles are charging $750 for front row seats.
- Androsynth 14y ago
  But if the customers are willing to pay the scalpers price, that means the demand exists. You say 'flip them for profit' as if thats a bad thing, but as long as people buy those tickets, its just smoothing out the market.
  - drivingmenuts 14y ago
    This is the artist himself saying that he'd rather have true fans in the seats at a reasonable price, rather than have the tickets snapped up by the asshole with the biggest wallet (not sorry for editorializing, that's the politest version of my view of scalpers). The add-on effect he's looking for is fan retention over time. If 500 people bought from a scalper at some much higher price, there's a small chance that they will become disgruntled and stop being fans. In the long term, he could lose that business. But if he himself levels out the market, the fans have less to lose. Sure, the artist takes a hit, but that's on him. He can always do something different next time if he's dissatisfied with his revenue. Remember that this is a guy who made so much money the last time, that he was somewhat nervous. I don't think he's thinking about it the same way you are. As for "not doing anyone any favors": way I see it, he's doing his fans a favor by keeping the ticket prices affordable.
    - Androsynth 14y ago
      So true fans are poor? What does having a fatter wallet have to do with your taste in comedy? Also, fans don't work the way you think they do. If I like Louis CK, I like Louis CK. If he chooses to charge $500 for a ticket, I will just watch him on TV. It won't cause me to resent him. In a perfect market, if enough people feel the same way, the price will drop down into the range that I am comfortable paying. If, on the other hand, he has so many fans that some are willing to pay exorbitant amounts to see him live, I will be forced to watch him on TV. If he wants to give everyone (rich and poor) the chance to experience his set live, he needs to increase supply by touring more.
pyoung 14y ago
The SF Giants use a variable ticket pricing scheme that seems to be pretty successful. It adjusts the price of tickets based on projected demand. This probably does a pretty good job at eating into scalpers profits (although not entirely). Of course baseball ticket demand is a lot more predictable due to the fact that their are ~80 home games a season. It would be interesting to see if there was any way to implement a similar system for concerts and shows.
- joezydeco 14y ago
  Trent Reznor had some thoughts on that: "My guess as to what will eventually happen if / when Live Nation and TicketMaster merges is that they'll move to an auction or market-based pricing scheme - which will simply mean it will cost a lot more to get a good seat for a hot show. They will simply BECOME the scalper, eliminating them from the mix." http://forum.nin.com/bb/read.php?59,548515 http://forum.nin.com/bb/read.php?59,548515
  - res0nat0r 14y ago
    I think is partially already in place? Ticketmaster now allows users to resell their tickets via their website: http://www.ticketmaster.com/ticketexchange/ http://www.ticketmaster.com/ticketexchange/
rmc 14y ago
Also, is scalping a bad thing? It seems to me that they are making the market more efficient. It might make the market more effecient. But it annoys your customers.

drcube 14y ago

Explain the Burning Man comment please. I'm involved in the local Burners scene, but I've never been to the the big one in Black Rock City. My wife is going this year with a friend, but she was gifted a ticket. So I would like to know what stupid decisions and exacerbated problems I will see if I decide to buy a ticket for next year's burn. Thanks.

blhack 14y ago
The bmorg completely disenfranchised large parts of the community with a "ticket lottery". Earlier this year, we were seeing theme camps with something like 10% "success" rate in the lottery, and a lot of the major camps weren't going to be able to go. It was only through a last-ditch effort, cancelling a second lottery and giving the tickets to "established" camps that they were able to get some of the major theme camps to go. The lottery played heavily in the favor of scalpers, who very obviously exploited it to their own gain, and this was something that the community had been screaming up and down about since the lottery was announced last year.
- mhartl 14y ago
  It's not the scalpers who are to blame. It's bmorg (and the broader Burner community) that's at fault for ignoring basic economics and human behavior. Everyone with a rudimentary understanding of game theory saw the whole mess coming a mile away.
  - blhack 14y ago
    The broader burner community (hi!) were the ones screaming at the borg that this was a terrible idea. They didn't care.
    - mhartl 14y ago
      Some screamed about the lottery, but capping secondary sales at face value is a deeply entrenched (and, in my view, terribly misguided) part of Burner culture.

maxerickson 14y ago

Louis C.K. is attempting to transfer the benefit from the messenger to people that actually plan on attending the show. He is apparently happy to suffer the market inefficiency that leads to his fans seeing cheaper ticket prices.

warfangle 14y ago

Problem with scalpers is they reduce the supply of the tickets endemically, thus driving the market price up. If the scalpers aren't involved at all, the market price is lower than the scalped price.

mhartl 14y ago
The scalpers are the market-makers. If there were an official market, the scalpers would be out of business overnight.
- masklinn 14y ago
  > The scalpers are the market-makers. So what? They're not adding any value in the equation, they're just parasitically extracting wealth from all other entities. What's the point of that from a social perspective?
  - nooneelse 14y ago
    Indeed. And what is the incentive for an artist to allow his/her fans to have their wealth extracted by a third party? None. It only makes the fans less able to buy things from the artist in the future. Louis C.K. is cultivating/nurturing his fans like a gardener cultivates/nurtures a plant. That clearly includes not letting insects eat the leaves off of a plant one intends to get an ongoing crop from.
    - ionforce 14y ago
      The incentive is to allow a specific sect of well-to-do fans access to his show that they didn't get otherwise. Whether or not you agree with that incentive is entirely separate.
      - nooneelse 14y ago
        I still don't see how that is an incentive to allow a third party to extract anything from the transaction. He could run an auction for tickets himself to satisfy that desire (if he had it).

diek 14y ago

You're operating on the flawed assumption that the sole endeavor here is to extract as much money from consumers as possible. If $45 a ticket allows Louis C.K. to make a tidy profit while still being affordable for his fans, but a third party buys all the tickets and resells them for $55... sure, some of his fans may shrug and say, "Well, I guess $55 isn't too bad" (price elasticity, etc, etc)... but why would Louis C.K. enable that behavior?

mhartl 14y ago
You're operating on the flawed assumption that the sole endeavor hear is to extract as much money from consumers as possible. No, that's why you have an initial lottery. With a lottery, poorer fans still have a chance to get a ticket.
- timbre 14y ago
  A lottery doesn't seem to me to do anything but mitigate the benefit of fancy redialers or other automated ways of getting your ticket order in first. With or without a lottery, allowing resale for profit gives people willing to pay more a better shot at seeing the performance. Preventing it means everyone who's willing to pay the set price has an equal shot. I've always assumed that's the goal of anti-scalping schemes.

Uchikoma 14y ago

Not if people who have no plan to attend buy significant amounts of tickets to corner the market.

ghshephard 14y ago

I didn't really understand BMORG's response to a ticket shortage - Lotteries play right into the scalper strength - the ability to file lots and lots of requests with different credit cards. I only had three active credit cards, so I could only enter the lottery three times (I didn't get a ticket this year) - but scalpers have a whole catalogue of credit cards and addresses to purchase tickets with. They must have been chuckling with glee when they saw the system this year.