From the sublime to the ridiculous. Last week it was politics; this week it’s rock show tickets.
The news release of the week concerns Tragically Hip’s farewell tour, because of the lead singer’s incurable brain cancer. Highly charged stuff. Earlier in the week, a special presale made tickets available to fans, with seats on the stadium floor going for $116 and $166 Canadian. In one hour, tickets were sold out, immediately turning up on ticket resale sites (scalpers) for up to $2800. And that’s in US dollars! Outrage ensued. Demands ranged all the way up to government intervention in the industry. Let’s slow down and take a look at the reality.
How Are Prices Determined?
In true free enterprise tradition, the promoters figure out how much it will cost them to stage the event. They analyze the risks, then set the ticket prices based on their expectation of how full the house will be (often in the 80% range), allowing a reasonable profit for all concerned. This figure is also affected by how much risk the promoters and the band are willing to take. Not so different from selling shoes or cars or houses. You price too high, you don’t sell. You price too low, you don’t make money. As you might guess, in the rock music business, it’s more of a crapshoot because of the band’s relationship with its loyal followers. If prices are too high, people might complain that the band has forgotten their roots, and stop being loyal. If fans are offered a special deal and don’t get it, who should they blame?
It’s when ticket prices are too low that things get hairy. Scalpers are taking a different kind of risk from promoters. If a production company sets prices too high and gets hit with a loss, they go out of business. If a ticket scalper sets his price too high, he loses the original price of the ticket, and that’s all. At the beginning, he can set his prices very high lower them easily if they don’t sell. If the producers do that, the band gets all sorts of static from people who paid the original, high price.
Thus the prices are driven by two different sets of criteria, and the fans fall down the crack between the two.
Do We Blame the Scalpers?
But the question occurs to me. What exactly was going on? The tickets everyone was complaining about were “presale tickets,” which were supposedly set aside especially for avid fans. Now, that sounds fishy to me. How were these tickets designated? What was to stop the nefarious scalpers from jumping online with their buying bots and scooping the lot? Which they did, because there was no system set up to stop them.
And, in the world of big business, when someone doesn’t take steps to stop something, we can be forgiven for assuming that they didn’t want it stopped.
Which leads to interesting speculation. One ticket reseller interviewed on CBC suggested that only 25% of the tickets are offered to the general public. So there could be all sorts of reasons for setting the prices of these fairly low and watching how they sell. Worst that can happen is that you get a whole lot of free publicity. Less happily, we must remember that Ticketmaster actually owns Tickets Now, one of the biggest resellers. How does that figure into the deal? Not to the fans’ advantage, I’d hazard a guess.
Buyer Beware
My reluctant conclusion is that the selling of rock concert tickets is no different from any other enterprise. Scalpers are a fact of life. The band and the promoters are the ones responsible for the original ticket prices and the security surrounding them. In this day of technology, there are many ways to ensure that low-priced tickets for avid fans actually go to the avid fans. If the promoters really wanted it, the scalpers could be relegated to a small number of individual purchases, leftovers and returns like they used to be in the days of paper tickets. Gaining fan support by pretending to provide special tickets, and then doing nothing to make it happen is a cheap trick. (I know: wrong band.) This industry doesn’t need government interference. It needs bands and their representatives to live up to their own hype.