UK Politicians Support Having Musicians Paid Multiple Times If Tix Are Resold

from the first-sale-is-for-suckers dept

A month ago, we noted that the managers of some well-known bands were pushing for a rule that would require anyone reselling concert tickets to contribute some of their profits back to the musician. It's difficult to see how this is reasonable. If anything it sounds like double dipping. In a normal transaction, after you've sold something, you no longer have a right to have any say over what the buyer does with his purchase. If he sells it for more money, that's his to keep. That certainly seems fair to everyone. What is clouding this when it comes to ticket sales is that professional ticket resellers have been monopolizing the ticket business, figuring out ways (sometimes using questionable means) to buy up all hot tickets within seconds of them going on sale. They then quickly turn around and resell them, sometimes at greatly inflated prices. This is upsetting many fans for completely understandable reasons -- and so the government is trying to figure out what to do about these "touts" (which in the US we call "scalpers").

The recommended policy starts off well by saying it's not a good idea to ban ticket sales, but then supports requiring any resale to kick back some of the profit to the musician or sports team. That actually seems like the worst of all world's situation. That's unlikely to stop ticket resales and jacked up prices, and it actually rewards the artists for getting the tickets into the hands of resellers. It gives those performers a chance to double dip on much higher ticket sale prices, while allowing them to shrug and say that they really priced them at an affordable level. There are ways to deal with the issues raised by ticket resales, none of which require government intervention -- but it's difficult to see how the proposed solution does anything at all to help, while doing plenty to eat away at the concept of having ownership of a product you actually bought.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Alfred E. Neuman, Jan 10th, 2008 @ 5:22am

    MOTS

    Scaplers do not follow to present laws, what makes this new proposal any differnt ?

    Looks like, smells like ....

     

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  2.  
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    fuse5k, Jan 10th, 2008 @ 5:30am

    mobile ticketing

    couldnt they just send the tickets via SMS to the purchasers mobile phone.

    say john smith and his 3 mates are going to a gig, they all turn up and a guy at the door scans in a barcode and hey presto john's 4 tickets come out.

    obviously this would require all people who have tickets purchased together to enter together, and would make it more difficult for the touts...

     

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  3.  
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    Danny, Jan 10th, 2008 @ 5:34am

    Yeah

    Well at least they aren't wasting time with claims that this would be the best way to help the fans that buy those tickets. The record and sports industries saw a revenue stream and instead of stopping they decided they wanted a cut of it. I'm sure the RIAA will pull a similar stunt soon over in the States.

     

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  4.  
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    Ima Fish, Jan 10th, 2008 @ 5:35am

    This makes no sense. The sole reason scalpers exist is because ticket prices are set to low. If ticket prices for popular concerts and shows reflected the actual price the market was willing to pay, scalpers would not and could not exist.

    Bands with huge concert draws such as Led Zeppelin (and many others, they came to mind first) should auction off their tickets to the highest bidders. Sure, scalpers could buy them, but considering they bought them at the highest price, who would they sell them too?! Nobody.

    That way the band/theater troop gets their fair share, as defined by the actual market price, and scalpers are out of business. Problem solved.

    Of course some will complain that this would price the poor and middle class out of going to see concerts. Who fricken cares?! I'm priced out of any number of things. I'm priced out of owning a solid gold car. I'm priced out of owning a mansion. I'm priced out of having a personal assistant. Not being able to buy everything you want is simply a fact of life. Get used to it.

     

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  5.  
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    matt, Jan 10th, 2008 @ 5:59am

    wait a minute

    sorry, market price is not always an accurate price. Remember, markets fluctuate and are known to be very volatile. So if the market says on the day of the concert that its worth 500$ but every day prior they says its worth 5$, how much would you say people pay?

    Raising price doesn't fix a situation. Scalpers would exist even more so with higher priced tickets, because as things get closer to concert time they would be forced to sell them for less simply to recoup on the losses. Additionally, this would bring up the price of all tickets well above market price, which would cause less people to go to the concert, which would cause them to raise price to compensate for the lack of attendance or drop a concert.

    yes, good idea indeed. /golfclap

    Usually the business economics of scale can apply well to music concerts: AKA cheap concert tickets, enormous attendance = more cds sold, more merchandise sold, etc.

     

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  6.  
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    Pax, Jan 10th, 2008 @ 6:12am

    This is actually a good idea

    And it should be applied to everything and not just profits but losses. I think if I buy a book for $50 then sell it after a year for $20, the author or publisher should have to reimburse me some of the loss.

    Try that on for size, musician scum. Why should you only share in the upside?

     

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  7.  
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    SmellyG, Jan 10th, 2008 @ 6:13am

    Re: Ima Fish

    Er, you what?
    Going to a Led Zeppelin Concert hardly is the same as a gold car or a mansion. What your proposing is make high profile concerts something that a select few can afford, only to stop tickets being overpriced and annoying fans? That would make the bands as bad as the scalpers, and not solve anything.

    What happened to the one ticket per person rule? That worked fine until RMG came along and made that program.

    It does make buying tickets annoying, but not as annoying as paying too much for them.

     

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  8.  
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    Ima Fish, Jan 10th, 2008 @ 6:14am

    Re: wait a minute

    "how much would you say people pay?"

    Um, the aforementioned auction I wrote about?! Yeah, that's it, the auction.

    "Scalpers would exist even more so with higher priced tickets, because as things get closer to concert time they would be forced to sell them for less simply to recoup on the losses."

    Once again, if scalpers did buy the tickets at auction for the highest price, to whom would they sell? If they continually buy high and then sell low, as you suggest, they'll go out of business.

    "Additionally, this would bring up the price of all tickets well above market price"

    The prices at auction would fluctuate to accommodate this. Maybe you don't understand how auctions work. Auctions start low and then go high. If there is no demand, the tickets would sell for low prices. If the demand is high, the tickets would sell for high prices. You might want to read up on that before mashing your keyboard again. Thanks!

    "AKA cheap concert tickets, enormous attendance = more cds sold, more merchandise sold, etc."

    Wait a minute, I though artists were supposed to make their money touring now that now one is buying CDs?!

     

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  9.  
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    Ima Fish, Jan 10th, 2008 @ 6:20am

    Re: Re: Ima Fish

    "Going to a Led Zeppelin Concert hardly is the same as a gold car or a mansion."

    How is it different? A concert or a car is merely something you can buy if you have the money and the desire. If you have the desire but not the money, that's not anyone else's problem but yours.

    "That would make the bands as bad as the scalpers, and not solve anything."

    I'm merely pointing out why, in our capitalist system, scalpers exist and how to get rid of them. If you don't like or understand capitalism, that's your problem not mine.

     

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  10.  
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    Gunnar, Jan 10th, 2008 @ 6:39am

    Re: Re: Ima Fish

    Yes, the select few 100,000.

    With more and more concerts selling out within minutes of opening sales (not just Hanna Montana, a series of 5 Mighty Mighty Bosstones concerts sold out in under 6 minutes too), choosing to sell some tickets via auction and some via pre-sale makes sense.

    That way die-hard fans can still skip work to get in line ( or wait at computers) for tickets, and the artist benefits from the higher prices instead of the scalpers.

     

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  11.  
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    Ima Fish, Jan 10th, 2008 @ 6:56am

    Re: Re: Re: Ima Fish

    The Mighty Mighty Bosstones are still together?! That is so cool. I saw those guys in Detroit back in the 90s and they were awesome. God, that brings back memories.

    "the artist benefits from the higher prices instead of the scalpers."

    Thanks, that's my point exactly. I didn't do a very good job explaining it.

     

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  12.  
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    Anonymous of Course, Jan 10th, 2008 @ 7:05am

    I like the kickback idea...

    I like the suggestion of a kickback on
    every subsequent sale. But I think it
    should apply across the board. Everyone
    that produces anything should be entitled
    to the same consideration.

    Just think of it, farmers, engineers,
    construction workers, all getting residuals
    for their work. The economy would collapse.

    Maybe that would be a good thing. Because our
    system of values is so far out of wack that it
    could use retooling.

     

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  13.  
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    dave, Jan 10th, 2008 @ 7:13am

    What a terrible idea.

    This proposal shows the same flawed logic as DRM.

    DRM presupposes that when you sell something, the person purchasing the product is not really purchasing the product. Instead, he/she is entering into a contract with the manufacturer of the product (someone they've never met) that limits how that product is used. This differentiates it from ever other product you purchase (when was the last time the sweatshop worker said that if you're too fat for your Nike tights you can't wear them, even if you buy them?).

    A great analogy is cars or properties. Who would suggest that if I buy some real estate, then turn around and sell it for more that I should have to pay some of my profit to the original owner? Same goes for cars (isn't that kindof how used car lots even exist???).

     

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  14.  
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    Danny, Jan 10th, 2008 @ 7:21am

    license or sale?

    Concert and sports tickets, for at least the last 25 years, have been purported by the *seller* to be a license to attend rather than a sale, per se.

    Of course we could have a long discussion arguing this one, but in this case it makes at least a little bit of sense. The promoter wants to be able to control behaviors at the event (no swearing at Isiah Thomas, etc.) and therefore wants to be able to kick you out (revoke your license), move you to other seats (change the license), or ban you forever (really revoke your license :-)). Given their (possibly legitimate) desires to manager behaviors after first sale, there may be a case here that a ticket is actually a license contract.

     

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  15.  
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    Danny, Jan 10th, 2008 @ 7:22am

    another danny

    Just to note, I (Danny) who wrote comment #14 am not the same Danny who wrote comment #3.

     

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  16.  
    identicon
    Kevin, Jan 10th, 2008 @ 7:25am

    Interesting thoughts

    I see a couple of interesting thoughts here. I think that there are several problems here that you have to define.

    1. A lot of people don't like that scalpers buy up all the tickets and resell them for much higher prices. From that perspective, the issue is that the prices are too high.

    2. The bands/sports team don't like that scalpers buy up all the tickets and resell them for much higher prices. From that perspective, the band/sports team is losing out on money that they could have had for the ticket sale if they priced them higher.

    Auctions are useful for determining something roughly approximate to the "market price," but what they're really much better at is extracting the maximum sale price for high demand/low supply items. So auctioning tickets helps solve #2, but it does nothing for #1, and probably makes it worse.

    You can try to come up with some sort of ticket restriction system that makes it harder/"impossible" to transfer a ticket to someone else, but that poses other issues. I have season tickets to our local NHL team, but I can't go to all of the games. Sometimes I give them to co-workers or family members who can go when I can't. Restricting the trade of tickets would prevent me from being able to do that, and this is something that would alienate a LOT of season ticket owners.

    So you really have to find some other way to do it. While I have no doubt that this problem existed 20 years ago, I don't think that it was nearly as widespread. The widespread rise of the ticket broker is a relatively new phenomenon. And as much as I hate to say it, I think that it's probably due to two main factors.

    1. You can buy tickets online. Instead of having to stand in line at the box office you can purchase tickets from the comfort of your own home. While restrictions on the number of tickets you can buy at a time might help a little, a determined broker can use multiple accounts/credit cards/computers to order multiple groups of tickets simultaneously, thus defeating the system.

    2. You now have a global marketplace in which to buy/sell tickets. In "the old days" your scalpers usually bought tickets for events in their own city/region and sold tickets to people in that same city/region. There were some exceptions of course, in cases of an event with national appeal (like Superbowl tickets). These days, your ticket broker might live in a shack in Montana, but regularly buys and resells tickets to shows and events in New York, LA, Boston, Miami, or anyone else. So instead of relatively small groups of scalpers/brokers dealing in a particular geographic area, you have a nation of scalpers/brokers dealing in all geographic areas. This edges out the local consumer.

     

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  17.  
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    Ima Fish, Jan 10th, 2008 @ 7:46am

    Re: Interesting thoughts

    "So auctioning tickets helps solve #2, but it does nothing for #1, and probably makes it worse."

    For #1 you wrote: "A lot of people don't like that scalpers buy up all the tickets and resell them for much higher prices. From that perspective, the issue is that the prices are too high."

    If scalpers are setting their prices too high, that means no one is buying them, which means scalpers are not making any money. If that's true, they would not exist. Since they do exist we can eliminate that possibility.

    Therefore, we are left with the fact that people are paying scalpers. Which means that the prices charged by scalpers are by definition not too high. To put it another way, if someone is willing to pay a scalper price X, that someone would be wiling to pay that same price at an auction. However, with the auction, the money goes to the band and the venue, not in the scalper's pocket.

    "You can try to come up with some sort of ticket restriction system that makes it harder/"impossible" to transfer a ticket to someone else"

    Why create such a complicated system when the market can work it out? If I'm at a store and see widgets for sale real cheap, i.e., below market price, I can buy them and sell them on ebay. If I can do that, I don't see why scalpers can't also take advantage of lower than market prices on tickets. The easiest solution is not to ban and enforce a ban on after market sales, it's to correct the original price.

     

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  18.  
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    Enrico Suarve, Jan 10th, 2008 @ 8:48am

    Re: Re: Interesting thoughts

    Whilst I appreciate that the idea of an auction does appear to tick a lot of boxes and in some ways makes a lot of sense it's probably going to be ultimately self defeating

    Supporting a band is much more than just the music for many - its heavily linked to supporting that bands ethos, kind of tribal

    Look I know that I'm not explaining this very well but basically the first band that totally like disses the real fans by scalping their own audience will be the first band on the scrap heap

    Everyone hates scalpers, to be effective bands know you have to love them

    Plus my expeirence of bands (spent a few year in the industry - nothing big) is that they don't really tend to think in terms of markets, sure they may love the money but most of them kind of understand theres more to it than that

    Hope some of this made some sort of sense?

     

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  19.  
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    Ima Fish, Jan 10th, 2008 @ 9:16am

    "Look I know that I'm not explaining this very well"

    I think you're explaining yourself very well and I know exactly what you mean. Musicians, especially "rock" musicians (whatever that means nowadays), don't want to be seen as gouging their fans.

    But setting a price someone is willing to pay is not gouging. It's merely setting the correct price. It may be too high for some, but so are any number of other products or services.

    The the question is who should reap the benefit of ticket sales, the scalper or the band? I think it should be the band.

     

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  20.  
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    Hulser, Jan 10th, 2008 @ 9:31am

    multi-auction?

    OK, I've had an idea for a while that seems like it would solve the problem of ticket scalping.

    Problem: By law, event tickets are sold under market value. Online ticket sales have allowed scalpers/touts to buy up whole lots of tickets that would normally have gone to the "little guy", "regular people" or the "real fans".

    Solution: Some major event ticket seller sets up an online system where a purchased ticket is automatically enrolled into an auction (unless you opt out). You buy the ticket at the government mandated price, but you can give someone else the option to bid on it an the company's web site. Say you buy two tickets to The Mighty Mighty Bosstones for $60. Someone who didn't even know they were still around -- and who has a much better paying job than they did when they first heard the band -- offers you a $100. You accept the bid and make a profit, the other fan gets to see the concert, the ticket seller and the artist/team takes their cut of the auction sale, and the government can say it's protecting the little guy. Everyone's happy...except the scalpers who are now cut out of the picture.

    The key to this is that if the ticket sellers have a vested interest in preventing scalpers from buying the tickets, then they'd likely figure out a way to tighten security on their web site. Right now, what's the downside to TicketMaster selling out all of its tickets to scalpers in six seconds? From a bottom line standpoint, none. But if they were cut into the profits on the resales of the tickets, I don't think it'd be too long before they figured out some way to prevent the wholesale purchase of tickets by scalpers/touts.

    So, it seems like this would work. Anyone see any reason why it wouldn't?

     

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  21.  
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    Ima Fish, Jan 10th, 2008 @ 10:10am

    Re: multi-auction?

    "So, it seems like this would work. Anyone see any reason why it wouldn't?"

    First, it seems unnecessarily complicated, e.g., the government would have to set up a mandated price. I don't see why the government should be involved with such trivial and private matters.

    Second, early buyers would still "make a profit." So even though these scalpers would have to share some of that profit with the band, they would still have an incentive to keep scalping. This would not eliminate scalpers in anyway.

    Like I said, the only simple way to eliminate the problem is to set an accurate initial price.

     

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  22.  
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    Overcast, Jan 10th, 2008 @ 10:33am

    Stupid solution to a stupid problem.

    The facility where the show will take place, should simply have you put a deposit on the tickets. You actually get them, and pay for them - with the same card used to make the deposit once you are there for the show.

    That way, there are no tickets to actually sell in advance.

     

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  23.  
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    Ima Fish, Jan 10th, 2008 @ 10:48am

    "You actually get them, and pay for them - with the same card used to make the deposit once you are there for the show."

    I don't know if you've ever actually been to a concert before, but having to check tens of thousands of individual credit cards would take a lot of time (ignoring the fact that not everyone has credit cards). Basically, you'd have to treat concerts like airports and show up hours in advance.

    And your solution could easily be sidestepped. Scalpers could still put deposits on a large number of tickets under temporary credit card numbers (my credit card company allows me to make such temporary numbers with a set amount.) They could then have fake cards made with those temporary numbers. And then sell those fake cards for more than the original deposit price.

    So essentially, the "credit card" would become the new ticket. Thus, scalpers would simply sell the card.

     

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  24.  
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    Hulser, Jan 10th, 2008 @ 11:00am

    Re: Re: multi-auction?

    First, it seems unnecessarily complicated, e.g., the government would have to set up a mandated price. I don't see why the government should be involved with such trivial and private matters.
    LOL. I don't see why the government should be involved with setting event prices, but the fact is -- as far as I understand it -- that they are. That's why ticket scalping exists, because for some reason I can't fathom, some people thing that even tickets should play by rules outside the normal supply/demand model.

    Second, early buyers would still "make a profit." So even though these scalpers would have to share some of that profit with the band, they would still have an incentive to keep scalping. This would not eliminate scalpers in anyway.
    But that's why I described key to the model, giving the original ticket selling company an incentive to increase their security. Right now, they couldn't care less who buys the tickets. Oh, sure, they probably give some lip service to the bands that say they want to market to the true fans, but from a profit standpoint, selling the tickets is all that really matters. But if the original ticket seller would actually get more profit if their web site was more secure -- and didn't allow most of the tickets to be grabbed up by scalpers -- then normal fans would be the ones getting the tickets. Which would in term mean that the normal fans would be in control of if/when/how much the tickets were sold.

     

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  25.  
    identicon
    Vincent Clement, Jan 10th, 2008 @ 11:37am

    Nothing But Nonsense

    This is more nonsense from people and organizations that do not want to adapt their business model to changing times.

    It's clear that a percentage of fans are willing to pay more than the face value of a ticket. Set up an auction system and maximize your profit.

    Why do content creators such as actors, musicians, writers, directors, producers, etc, believe they are entitled a cut every time their content is sold? When you resell a car, does the auto manufacturer get a cut of that sale? If I use my truck for business purposes, does the auto manufacturer get a percentage of your profits?

     

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  26.  
    identicon
    Anonymous Coward, Jan 10th, 2008 @ 12:38pm

    Re: multi-auction?

    Problem: By law, event tickets are sold under market value.

    What? I've never heard of this law. And since you didn't state any regional limitations, you were obviously referring to some type of universal law. Now, unless you can cite such a law, I'm calling bullshit!

     

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  27.  
    identicon
    Michael, Jan 10th, 2008 @ 12:44pm

    Market

    I've never understood just exactly why tickets shouldn't be subject to the free market. What makes tickets so special? I can live without concert tickets much more easily that I can food and shelter yet those are subject to the free market.

     

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  28.  
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    AMP, Jan 10th, 2008 @ 12:47pm

    Re:

    I think the problem with this model is that the very people that would be priced out, are exactly the demographic that a lotthese bands target. Seems like they would risk alienating their fan base.
    Plus holding an auction for every ticket on say a 20 city tour at an average of 60,000 people per city (making thse numbers up) seems pretty complicated. Just a thought, I haven't really thought it through all they way.

     

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  29.  
    identicon
    Anonymous Coward, Jan 10th, 2008 @ 2:40pm

    Re: Re:

    I think the problem with this model is that the very people that would be priced out, are exactly the demographic that a lotthese bands target.

    If they're so interested in getting every last penny they can, then maybe they're targeting the wrong demographic.

    Seems like they would risk alienating their fan base.

    I can't imagine people going to concerts by bands they don't like and crowding out fans. I don't see the motivation for that and it just doesn't make sense. It seems to me that the biggest fans would be the ones willing to pay the most.

     

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  30.  
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    Francis Burdett, Jan 10th, 2008 @ 9:40pm

    Auction for Tickets

    Are there any case studies where an auction model was used for music or sport ticket allocation?

     

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  31.  
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    Enrico Suarve, Jan 11th, 2008 @ 3:40am

    Re:

    Yeah funnily enough it was 'rock' musicians I was mainly thinking of when I wrote it

    I still think bands would tread very carefully around this one - whilst to someone who understand supply and demand and market theroy (which you obviously seem to), this may seem a fair solution, I would be worried about what percentage of their fan base would be understanding and what percentage would just see it as an afront

    Whilst I understand that more and more these days the concert is where the bands are making their money they have to be careful not to drive people away or they may lose momentum

    Selling all your tickets at a high price today but losing fans may not make sense in the longer run, especially whe it comes to reducing merchandise sales (another key area bands make their money in and one which in my expereince they understand even better than tickets sales, as it is one which has always been theirs and always been profitable - even when the model was different and the concerts were the loss leaders)

    Would be interesting to see what would happen with a band who auctioned though I give you that - if someone does it i'll quite happily chew popcorn on the sidelines with you and swap observations!

     

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  32.  
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    MentalNomad, Jan 11th, 2008 @ 8:55am

    Couple of points; bad analogies

    1. People keep talking about tickets like property, but they are no more like property than intellectual property. Tickest represent a right - the right to attend that concert on that date.

    Bear in mind that the purpose of tickets is simply to avoid lines and delays at the door; the alternative is to charge entry at the door, in which case the promoter/artist has complete control over the entry price. Of course, that's untenable with thousands of people trying to decide between seats and make purchases in the 30 minutes before a big concert starts, never mind the problems of mobs outside sold-out events, so we have tickets. Thus, even the POSSIBILITY of a "free market" with "scalpers" is created only by the ARTIFICIAL use of pre-sold tickets to speed building entry and control crowds.

    2. The promoters / artists are the ones selling the privilege of attending, and I feel they should have some rights here. It's not a just matter of "fair market price." If Sting wants to have a concert that middle-class people can afford, he can set the door price at $50. If he wants to avoid a mob, he can pre-sell the tickets. But if scalpers use techincal artifice (buyer bots) to nab the tickets before the actual attendees buy any, they get to set the market price for what Sting charges? Isn't that a violation of Sting's rights? For that matter, if Sting wanted to provide a student discount, what happens to the resalability? Can the scalper resell at "market," and if so, what happens to the Sting's right to subsidize students in attending his event?

    3. There's not necessarily double-dipping... it depends how it's structured. If an artist is contracted to receive 20% of ticket sales, and 3rd parties are required to pay out 20% of the resale price over the face value of the ticket, then it's not double dipping. The artist is getting 20% of all sales. It's simply honoring the artist's agreement to perform. Scalpers depend on the artists, why should they not be expected to support the source of their livelihood be complying with the agreement?

     

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  33.  
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    MentalNomad, Jan 11th, 2008 @ 8:59am

    One more thing....

    "it actually rewards the artists for getting the tickets into the hands of resellers... it's difficult to see how the proposed solution does anything at all to help"

    One might say it helps by reducing the profit of the scalpers. If the activity is less profitable, there will be less of it.

    But that assumes that one defines the existence of scalpers as a problem. I don't see where you describe what is, in your opinion, "the problem..." but I do see you refer to a ticket as product, which I disagree with (see above.)

     

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