TicketMaster’s Selling Method is the Real Problem

TicketMaster’s Selling Method is the Real Problem

Amidst the excitement over the proposed merger of TicketMaster and Live Nation exists one popular thread of discussion; high ticket prices. Many fear that the merger of these two companies will result in a monopoly that will ultimately increase ticket prices. While I am opposed to the merger because of potential anti-trust issues, the real problem is not the threat of high ticket prices, but continued mis-pricing and inefficient selling methods. In plain speak, whining about high ticket prices overlooks the fact that present selling methods attract scalping and buying frenzies. Let me explain…

First, tickets for many events are intentionally under-priced, this is something that has been widely discussed by economists. In plain speak, John Mayer does not want to be seen as gouging his fans so he and his promoter prices tickets below what one may be willing to pay as a good will gesture. That also helps ensure a sold-out show, which makes for more concession and t-shirt sales. While setting prices low makes fans happy and accomplishes business objectives, it opens up the door for people to resell tickets at a higher price.  Compounding the problem is that a limited number of tickets end up on the resale market, which can artificially increase the perceived value of an available ticket.

Second, TicketMaster and Live Nation have failed to adopt ticket selling methods that make it possible for the most desired tickets to sell at a price that more accurately represents what fans are willing to pay. Under the present system, tens of thousands of people line up to buy a limited quantity of under-priced tickets which results in a near instant sell-out. Though the appearance of a first come – first served system seems fair, there are too many ways to abuse the system. 

The solution to both the pricing problem and the inefficient selling method is not original, and it is proven to work. I will explain here:

Bon Jovi Concert in X City on X Date: 20,000 seats available, 2,000 seats are taken by the band, radio stations and promoters, so 18,000 seats to sell.

1. 1,000 seats are considered the best; 200 sell for $300, 200 sell for $200 and 600 sell at auction with a $70 min price.
2. 4,000 seats are considered decent; 1,500 sell for $100; 3,500 sell at auction with a minimum price of $50
3. 3,000 seats are considered fair; sell them in two sets of 1,500 at auction with a min price of $40
4. 10,000 seats are considered bare bones; sell half at face value and half at auction.

Seller varies  times when auctions begin and end, and also sells tickets that were not auctioned at face value over course of time leading to show date.

How does some variation of this method help people efficiently get tickets at a fair price?

a. Ticket scalpers would be forced to either buy a pricey ticket they may not be able to resell for a profit, or compete against other scalpers in auctions.
b. While some ticket prices may be higher, they will overall be more consistently priced in line with demand. 
c.  As this method evolves, buyers will learn that auction ticket prices fall after the on-sale date. If you really want the  tickets now, you  pay a premium. If you are willing to wait, you will usually get what you want for a lower price in a couple weeks.
d. Fans who want the cheap seats don’t get caught up in a holding pattern behind people trying to get the best tickets. 

This method was tested. I also explain on this blog that most resold tickets tend to fall in price over time, I am quite sure this would happen in primary markets too. The caveat is that this method would take a little time to tweak, but it would work. 

I do not know about everyone else, but all I care about is buying tickets at a reasonable price. If you want to seriously put a dent in scalping and artificially high prices, urge TicketMaster & Live Nation to change their selling methods.