Business Week and a variety other rags were abuzz this week about Louis C.K.’s efforts to one up scalpers by selling tickets to his shows on his website for $45, period. TicketNews scooped some data on the subject from SeatGeek, which suggests that Louis’ efforts have so far been a success. Some have speculated that this is a blow to scalpers and Ticketmaster. No question, its was a big success for Louis, but I don’t think this is a sign of things to come.
1. This was possible because Louis, much to his credit, went to great lengths to find venues that were not married to Ticketmaster. Not impossible, but not something many artists are able to put the time into between updating Twitter and evading the paparazzi.
2. Capping on the previous point, the desired seating capacity for the tour venues is roughly 2,000 – 5,000 seats. There are more options for smaller, desirable venues with those kinds of capacities. The same would not be true if one wanted to accommodate much more than 5,000 – Ticketmaster (or an evil twin) has them locked up.
3. Louis is explicit that scalping will be monitored and enforced. That is going to deter a good portion of risk averse hobbyists who typically scalp tickets. The more sophisticated enterprise has ways to manage risk and return which will result in fewer tickets being purchased for the purpose of resale.
Skimming the resale prices on Ticketnetwork.com and StubHub, it looks to me like the pros are building risk / return into the ticket prices. For example, in Boston, tickets are at least four times face, in Cleveland, they are closer to ten times face value as of this writing.
Kudos to Louis C.K. for being different and giving Ticketmaster something to think about. Still business as usual for resellers.
Lawrence White, an economist at NYU wrote a commentary on Huffington Post in support of ticket transferability and the State of New York’s recent renewal of a law, “that allows venues to sell non-transferable paperless tickets only if buyers have the option of a transferable alternative, including the right to resell their ticket above or below face value as they see fit…”
The gist of White’s position …if you buy the ticket, you should own it, and be able to do with it as you wish — use it, resell it, or give it away. That is where a secondary market comes in… [t]hese developments give flexibility to a first-instance ticket buyer, whether because the buyer cannot attend an event because of changed plans, or because the buyer wants to sell some of a multi-event series of tickets such as a season ticket. They also benefit the late-instance buyer whose plans change so that attending the event is now a possibility.
I agree with notion that a ticket should be transferable. There are too many inconveniences and short sighted outcomes when tickets are restricted from resale. However, the law should not dictate transferability, especially when the secondary ticket market is largely driven by profit motivated resellers. A comment posted by Ejay McCarthy in response to Professor White’s article claimed, “I tried to buy Justin Bieber tickets for my nieces, but it was sold out in a matter of minutes. Go to ebay right now and you can find them from 200 per ticket all the way up to 3500 per ticket.” That experience has been shared by more than enough average consumers to fill Madison Square Garden to capacity. The secondary market still has too many options for crowding out the public from primary ticket sales.
Public policy that dictates ticket transferability is unnecessary. Why not have laws that regulate the number of tickets resellers can acquire from the primary market? They do not exist because laws like that would interfere with the free market.
There have been a couple of articles in popular press recently (here, and here) talking about the relationship between the Red Sox decline in standings to resold ticket prices. Again, with the help of my friends at SeatGeek.com, I thought it would be interesting to look at how average resale ticket prices are doing as compared to last season.
The above chart observes average resold ticket offer prices for the first 34 games of the 2011 and 2012 season. The chart makes it a little hard to tell, but this years average resale price of $68.17 is down about $12 from last seasons average of $80.65. Who the home team plays has a big influence on resold ticket prices – those wild up ticks on the chart are predictably the Red Sox Playing the Yankee’s. Comparing average resold prices for the first season match-up between these two teams, 2012 is down about 21% on average. By comparison, the games against the Oakland Athletics are down a whopping 53% on average.
The summary: the data confirms it is a buyers market. I predict that the best value games over the summer will be the Blue Jays and White Sox. When the Yankee’s return in July, I would estimate that half decent seats should be in the $90-100 range; better seats should be considered a deal in the $150-175 range. For those that are new to buying tickets on the secondary market, in weekend match-ups, Sunday is your best bet for a deal.
Thanks to a writer for the WSJ, I was clued in on false reports that secondary market ticket prices for the Miami Marlins were in a nose dive. With the help of my friends at SeatGeek.com, I set out to do some myth debunking (sorry Miami Today and Alex Groberman). Average ticket price for 2012 are up about $13 based on secondary market prices for the first 35 games of the season. According to SeatGeek.com, average ticket prices were $35.14 in 2010, $36.26 in 2011, and currently are about $49.58 for 2012. The chart below provides a visual of 2011 and 2012 ticket prices to date.
To be sure, the opening game of the season at their new ballpark has boosted average resale prices for 2012, but I would say overall they are slightly improved with a little help from price speculation for the upcoming Red Sox games you see on the right of the chart.
In the Miami Today piece, Phil Miller, a sports economist, was quoted as saying that Miami is, “not a really good baseball market.” While I agree, the quote in itself is an oversimplification. In many markets, early to mid season standings are not consistent predictors of ticket price/demand. We see this all the time in markets where there is not a fanatical base of followers, a la San Francisco, Cleveland, etc. Interestingly, recent scholarly literature by Lemke, et. al. from Lake Forest College noted that the “effect of league standing on attendance has lessened over the years.” More broadly, factors that can influence ticket demand / attendance change from game to game, weather, time of year, inter-league play v league play…. when it comes to explaining attendance or ticket resale prices in sports, the devil is in the details. The Lemke paper also concluded that new MLB stadiums produce “one of the most erratic relationships over time” when it comes to resold tickets.
For the Marlins, I think its too early to tell whether prices are really up or down.
Earlier this afternoon, a panel discussion at Ticket Summit in Las Vegas entitled, ‘The Merger” was held to discuss the Live Nation / Ticketmaster merger that was approved by the Justice Department earlier this year. The panelists included Jeff Kline of Veritix, Doug Lyons of Tickets.com, and Don Vaccaro of ticketnetwork. For ticket brokers, the timing of the panel discussion could not have been better as almost simultaneously, Live Nations stock price is being hammered by news of a revenue dip and slow summer concert sales. This made harping on Live Nations business model very easy.
While Live Nations stock price tumbled, the panel got to the root of a key issue from the ticket resellers perspective and that is the issue of control. If a fan buys a paperless ticket, why can’t they sell it or gift it later? Why can’t someone in California buy a pair of tickets for a friend in Florida? Because Live Nation / Ticketmaster wants to keep those tickets out of the hands of resellers. Huh? wait. So inconvenience millions upon millions of fans because you want to control who can sell a ticket? Essentially, yes, though Ticketmaster usually veils the explanation. This discussion leads to the issue of ‘fans rights’ which is relatively new talking point in the ticket resale community.
For ticket resellers, fans rights are a convenient platform from which to argue that less control of tickets is better for the fan. This is of course because less control also means there are more opportunities for the secondary market. And that is really the point that this panel and industry leaders, including Chris Tsakalakis of StubHub wants to get across to consumers and industry players. Let the market run free and everyone can win.
A good question raised by the panel discussion is why can’t ticket resellers be viewed as just another distribution channel? What is the problem with presenting options to a diverse customer base? In recent years, major league sports have begun to partner with resellers (Ace Tickets and the Red Sox in Boston and StubHub partnering with the MLB, for example), so why can’t concert promoters and Ticketmaster do the same?