8 ms·

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 th

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"?
    - sambe 14y ago
      They are doing a service to anyone who buys scalped tickets, who is happy to pay extra rather than not go. Competition at this price is lower. I know many people who have happily paid well over face value on several occasions. Of course everyone would rather pay an artificially low price. Wanting a better deal isn't the same as the premium being extortion. You may not like scalping but there's no point being blinkered about it.
      - fusiongyro 14y ago
        Except they're only paying extra because, ta-da!, the tickets were scalped. The competition is higher at the lower price because, ta-da!, the tickets were scalped. The arguments for scalping only work if the effects of the scalping are ignored. Eliminating scalpers benefits everyone.
        sambe 14y ago
        It's not so much an argument "for scalping" as an argument against being emotional and extreme. So, once again, - no, not everyone benefits. Without the higher price tickets available from the scalpers, they would not have been able to go. They got what they wanted at a price they could afford. Disliking something is not the same as it being inherently and totally evil.
        fusiongyro 14y ago
        You're putting words in my mouth. > Without the higher price tickets available from the scalpers, they would not have been able to go. Again, this is assuming that the amount of competition for the tickets is not affected by the scalpers. In reality, the scalpers are exactly the ones driving the scarcity.
        ionforce 14y ago
        That's the whole point of scalping, to affect access to tickets. Has more money => has more access to scalped tickets vs normal tickets
    - vacri 14y ago
      The value that scalpers add is that you can get tickets at a later time. That's about the only value I can see that they provide, and whether that benefit is moral or not I guess depends on whether you believe in first-come-first-served for that item.
  - dagw 14y ago
    First of all, just because there are a number of people willing to pay $150, that doesn't necessarily mean there are enough of them to sell out every show. So now he either has to lower prices as the dates approach or play to half full venues. Both of which are obviously sub-optimal. Secondly you're ignoring the broader message sent by charging $150. Even if he can find enough people willing to pay that to fill a small venue, it risks sending the wrong message and pissing off people who might otherwise have bought his DVDs, watched his TV shows or gone to other shows. So now instead of being seen as broadly popular "man of the people" who "sticks up for his fans" with wide appeal, he's seen as a stuck up rich fucker entertaining other stuck-up rich fuckers. This will have obviously negative effects on his TV ratings, where I suspect is where he makes most of his money.
  - balloot 14y ago
    What Louis CK is essentially saying is that given a large amount of money already in the bank, it is more valuable for him to have affordable tickets than it is for him to maximize revenue. That is a decision that is perfectly rational. Not everyone gets their full utility from making the absolute maximum amount of money possible. Also, a side effect of this is that below-market value tickets create a shortage, which in turn makes it valuable to be the first to learn about new tickets. This has to be driving signups to his mailing list and twitter feed.
  - vacri 14y ago
    Leaving money on the table does no one any favors. God bless the US health system! $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. Economists are crazy. A full house is a full house. The people who win are the people who attended. How you can possibly say 'no-one wins' from a full house of successful comedy on the cheap is beyond me. Yeah, bummer, the cheap tickets to a very entertaining night left us all feeling crappy...
  - jeffool 14y ago
    >Leaving money on the table does no one any favors. Except fans. Who can now buy his DVDs or other swag. (Or afford both his show, and rent.) If your goal is to get as much money as quickly as possible, there's another word for that. Short-sightedness.
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.

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"?
  - sambe 14y ago
    They are doing a service to anyone who buys scalped tickets, who is happy to pay extra rather than not go. Competition at this price is lower. I know many people who have happily paid well over face value on several occasions. Of course everyone would rather pay an artificially low price. Wanting a better deal isn't the same as the premium being extortion. You may not like scalping but there's no point being blinkered about it.
    - fusiongyro 14y ago
      Except they're only paying extra because, ta-da!, the tickets were scalped. The competition is higher at the lower price because, ta-da!, the tickets were scalped. The arguments for scalping only work if the effects of the scalping are ignored. Eliminating scalpers benefits everyone.
      - sambe 14y ago
        It's not so much an argument "for scalping" as an argument against being emotional and extreme. So, once again, - no, not everyone benefits. Without the higher price tickets available from the scalpers, they would not have been able to go. They got what they wanted at a price they could afford. Disliking something is not the same as it being inherently and totally evil.
        fusiongyro 14y ago
        You're putting words in my mouth. > Without the higher price tickets available from the scalpers, they would not have been able to go. Again, this is assuming that the amount of competition for the tickets is not affected by the scalpers. In reality, the scalpers are exactly the ones driving the scarcity.
        ionforce 14y ago
        That's the whole point of scalping, to affect access to tickets. Has more money => has more access to scalped tickets vs normal tickets
  - vacri 14y ago
    The value that scalpers add is that you can get tickets at a later time. That's about the only value I can see that they provide, and whether that benefit is moral or not I guess depends on whether you believe in first-come-first-served for that item.
- dagw 14y ago
  First of all, just because there are a number of people willing to pay $150, that doesn't necessarily mean there are enough of them to sell out every show. So now he either has to lower prices as the dates approach or play to half full venues. Both of which are obviously sub-optimal. Secondly you're ignoring the broader message sent by charging $150. Even if he can find enough people willing to pay that to fill a small venue, it risks sending the wrong message and pissing off people who might otherwise have bought his DVDs, watched his TV shows or gone to other shows. So now instead of being seen as broadly popular "man of the people" who "sticks up for his fans" with wide appeal, he's seen as a stuck up rich fucker entertaining other stuck-up rich fuckers. This will have obviously negative effects on his TV ratings, where I suspect is where he makes most of his money.
- balloot 14y ago
  What Louis CK is essentially saying is that given a large amount of money already in the bank, it is more valuable for him to have affordable tickets than it is for him to maximize revenue. That is a decision that is perfectly rational. Not everyone gets their full utility from making the absolute maximum amount of money possible. Also, a side effect of this is that below-market value tickets create a shortage, which in turn makes it valuable to be the first to learn about new tickets. This has to be driving signups to his mailing list and twitter feed.
- vacri 14y ago
  Leaving money on the table does no one any favors. God bless the US health system! $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. Economists are crazy. A full house is a full house. The people who win are the people who attended. How you can possibly say 'no-one wins' from a full house of successful comedy on the cheap is beyond me. Yeah, bummer, the cheap tickets to a very entertaining night left us all feeling crappy...
- jeffool 14y ago
  >Leaving money on the table does no one any favors. Except fans. Who can now buy his DVDs or other swag. (Or afford both his show, and rent.) If your goal is to get as much money as quickly as possible, there's another word for that. Short-sightedness.

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.