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Category: Tkt Ec

General discussion on the topic of the economics of ticket resale and or scalping.

Red Sox Tickets: A Buyers Market

Red Sox Tickets: A Buyers 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.

red_sox_ticket_prices

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.

 

Resale Prices: What Goes Up…

Resale Prices: What Goes Up…

This article is a follow-up on a concern often expressed by readers and friends alike that for one reason or another, a particular concerts ticket prices will not come down because everyone want tickets to that show! Most recently, I have been asked specifically about Lady Gaga and Taylor Swift. During my research, which was a few years ago, I observed resale ticket prices on the internet for more than 150 concerts over the course of a two year history. Of those, only a handful of concerts had cases where average prices did not fall and in no case did average prices go up. I feel confident in stating that, as a general rule, resale ticket prices will fall from the day the tickets first go on sale.

In further illustrating this point, I asked my colleagues at SeatGeek to prepare two graphs charting average resale ticket prices for two John Mayer concerts from February of this year. The first show took place on February 24th in Boston – a town that has a huge college population and enough Mayer fans to create a lot of demand on both the primary and secondary market. The second show I picked was the first of two concerts Mayer performed at Madison Square Garden on February 25th. I chose this show because Madison Square Garden is a very popular venue and because the city has a vibrant resale market which significantly increases speculation (people buying for the explicit purpose of reselling tickets for a profit). So, everyone wants a ticket, supply is short and prices are high, right? Not really.

In the below charts (courtesy: SeatGeek.com), ticket prices are represented by blue and red lines. The blue line is average resale ticket price over time without any controls on price. In both cases, average price starts at about $120 per ticket ($20-30 above face value including fee’s) and proceeds on a roller coaster ride with a nice crash in the last five to seven days. I often recommend buying resold tickets in this time frame because the crash consistently seems to occur in the five to seven days leading up to a show. I will propose why this is the case in a moment.

The red line is average ticket price excluding tickets sold for more than $120. I control for price to rid the analysis of highly priced tickets (usually the best) that tend to skew the average price which helps us see a more consistent average price. Some people are willing to drop $500 for a pair of front row tickets at anytime and those ticket resales skew average prices upward.

Notice the bump in average price in the five days leading up to the shows? That is you and your friends realizing a week before that they don’t have a ticket and they are all running to the resellers for tickets – but this does not have to be you! If you are looking for values, be brave and wait out the storm. I specifically suggest looking for resold tickets on the 3rd or 4th day leading up to an event. Referring to my article titled SOLD OUT?! Three Strategies for Getting Tickets, I would concurrently pursue strategy 1 and 2 on these days until I found the tickets I wanted. For example, I bought two tickets for the February 24th Mayer show for $92 each from TicketMaster the day before the show. As the chart illustrates, average prices were at or below $90 on that day, so the resale market was no better or worse than the primary market. Strategy 1 just happened to work for me so I did not have to revert to a reseller – however I did have to wait quite patiently.

John Mayer, TD Banknorth, February 24, 2010John Mayer, MSG, February 25, 2010

For those who want a little more information on why prices tend to drop in the final days leading up to the show, I have three proposals.

1. Resellers want to get ticket out of their inventory before they have to sell them to street scalpers or otherwise toss them out, so they price to sell.
2. People like you and I bought too many tickets for friends who don’t show and we are now selling them at face value on eBay and Craigslist, which arbitrages the higher prices that resellers seek.
3. The combination of one and two creates enough supply to support the demand wildly high prices are not supported.

TicketMaster would like to think that they are participating in the arbitrage by selling tickets at the last minute, but I think the number of people who know to look on the primary sellers website is not sufficient to have an influence, but it is nice for those in the know!

Top 25 Tours of ’08: Geeking Out on the Data

Top 25 Tours of ’08: Geeking Out on the Data

The other day I was getting a haircut from Heather, my trusted ‘hair designer.’ During the course of our usual banter, I told her about this blog. The resulting discussion between her and the other patrons focused on the $5,000 ticket price they heard someone paid to see Madonna and how crazy that person is and unfair it is that ticket scalping is legal, etc, etc… This conversation frustrated me and is the reason why I am sit here at 1am writing this post.

To be sure, resold ticket prices are not cheap, but as I will explain on another day, the face value of the tickets are artificially low and that results in so much resale activity. The good news is that the proliferation of reselling offers more price variety and that means you won’t have to spend anywhere near $5,000, or $500 to see popular artists.

Geek out time.

Every year, Billboard Magazine publishes the top 25 tours and concerts of 2008. The average person may look at these charts and obsess over the eight and nine (yes NINE) figure revenues tours produce. Though it is fascinating to me that a band as old as Bon Jovi could possibly do 99 shows in 365 days, or that the Spice Girls are even on this list, a ticket geek of my variety takes joy in crunching the numbers for my hair designers (and her patrons) benefit.

I did a little futzing with Billboard’s numbers and added in ticket price data from StubHub’s 2008 Annual Report. This data is a little imperfect because Billboard reports from November to November and StubHub does a calendar year, still the average numbers give a good enough idea of how average ticket prices from a primary seller (like TicketMaster) might compare with StubHub (a fixed price reseller).

The net result of this analysis is that Madonna tickets had the highest average price, but they also had the highest average face value. Yes, average means some tickets sold above these numbers, but some also sold below the average. The other point of note is that sell out ratio did not really effect average resale price, compare Madonna to the Eagles… or Bon Jovi and Bruce Springsteen for that matter. I have not proven it yet, but I am quite sure that sell out hype is not a driver of resold ticket prices (though it may drive volume).

TAKE AWAY: Average resale numbers are not cheap, but they are not as insane as my hair designer might presume and in all truth, if one really wants to see Madonna or the Eagles, know that you can buy a pair of decent tickets below the average resale prices – especially if you follow the advice I have posted on this site. Note: The Stub Hub numbers in BOLD are their top ten average ticket prices in 2008. Also, StubHub only reports average ticket prices over $100 so, the n/a are either under $100, or the tours did not have tickets resold on StubHub.

Top 25 Tour Ticket Prices for 2008

The Economics of Tickets (when to buy & not)

The Economics of Tickets (when to buy & not)

If there is anything I want people to know, it is when is the absolute worst time to buy a ticket for an event. Though I formally studied concerts, I have run casual tests with sporting events and other kinds of event and discovered similar price patterns. Based on these price patterns, I establish two golden rules that will be reinfored throughout my How To writing.
 
Golden Rules:
1) The worst time to buy tickets is on or near the date the tickets went on sale. In this time frame you will almost always pay more for an event ticket and you will surely kick yourself if you check prices in two months to find they are cut in half.
2) The best time to buy is in the fourteen day period leading up to the event.
Why? When tickets go on sale is typically the time when everyone including scalpers and resellers and regular people are trying to buy tickets. Sometimes 50,000 people are attempting to buy tickets for a show that only has 14,000 tickets on sale. This scenario results in an committed subset of the 36,000 who did not get tickets to hunt on eBay and other tickets site for a very limited inventory of resold tickets. My research found that about 1 – 3% of tickets were resold so event from start to finish so, 5,000 people looking for the couple of hundred that may be on sale in the weeks or two around the onsale date is great for sellers and super bad for buyers.
On the other hand, in the three weeks leading up to the event, a few critical factors turn a sellers marketing into something more pleasant. Specifically:
– Well intentioned people who bought tickets have to sell because they can’t go or someone bailed on them (incleased supply);
– The primary ticket seller (eg TicketMaster) releases more tickets in this time frame to thwart reselling or because there is excess;
– Resellers / scalpers alike have to compete with the above two and need to move tickets so they adjust prices on all but the very best tickets;
– Buyers come into the market in a less organized fashion so sellers have to entice people to buy. Typically people wrongly assume if they don’t have a ticket for an event a few weeks before, they probably cannot find them.
These factors make the few week period before the show a great time to buy, especially from eBay auctions.

PROOF: I like to provide a little proof for the nay sayers out there who think I am full of it. Below I show ticket prices for the better seats at TWO different SOLD OUT concerts. One at Madison Square Garden and the other at Tweeter Center in Massachusetts. The charts I sample average ticket prices from the on sale date until the 14th day before the concert. The second chart samples ticket prices 14 days or less before the concert date. I incliuded statistical information for the math geeks out there.

Key: Auction = single ticket auction price; Buy It Now = the per ticket price for Buy It Now;  Fixed Price = a single ticket sold at a fixed price (Stub Hub was kind enough to share the data).

Chart A: Kenny Chesney at Madison Square Garden, this is a sample of the better ticket prices 14 days or more before the event date. Section Quality two is the section in front of the stage, section quality 3 is right behind section 2.Kenny Chesney Ticket Prices - 14 Days or More Before Event

 
Chart B: The same Kenny Chesney concert now sampling ticket prices in the 14 days leading up to the event. Note that the average auction ticket price drops more than $60 and the average fixed price drops about $30.
Kenny Chesney Ticket Prices - Less Than 14 Days Before Event
 
Chart C: Jimmy Buffet at Tweeter Center in Massachusetts with ticket prices from the on sale date until the 14th day before the event.
Jimmy Buffet Tickets - More than 14 days Before Event
 
Chart D: The same ticket prices for the Jimmy Buffet concert 14days or less before the event. In this case prices have dropped more than $200 on the auction route, but they actually went up a few dollars for fixed price tickets – but not much.
Jimmy Buffet Tickets - Less Than 14 Days Before Event
 
Jimmy Buffet tickets (for reasons I do not know because I am not a parrot head) seem to hold prices on the fixed price market, and there are some exceptions like this for high demand tickets. However, overall you are not going to loose much by waiting. In fact, waiting can save you some decent cash. Most of the other events I examined in the course of my research had price patterns similar to that of Kenny Chesney – decent price drops in the last two weeks before the event.