Do Journalists Understand Ticket Resale?

Do Journalists Understand Ticket Resale?

A consistent trend in ticket resale journalism is the “drive-by” nature of reporting on the topic. Many journalists write about ticket resale (a.k.a. ticket scalping) with a seemingly narrow and incomplete understanding of the subject matter. The result is reporting that is less than complete and a public that does not truly understand what really fuels the secondary market and how it may or may not benefit the general public.

A good example of incomplete reporting is John Seabrook’s piece in the August New Yorker titled, The Price of the Ticket. The crux of this book-report-style review is that the ‘live music business is broken’ and he uses the infamous February 2009 Bruce Springsteen ticket debacle as a vignette to support this claim. While the article offers a useful and unique report on the evolution of the concert promoting business, it fails to fully explain ticket scalping and does not even come close to explaining the mess that is ticket pricing and distribution. In addition, the artice fails to examine why Bruce Springsteen and other artists who claim to be irate about scalping don’t use their star power to productively address the issue instead of writing angry letters or blogs posts about it.

At the outset Seabrook claims that “Almost everyone agrees that the business of live music… is dysfunctional.” This claim is poorly supported and is also untrue. Going by the numbers, Ticketmasters ticketing revenue from 1998 to 2008 grew ten-fold (Rolling Stone, July 9, p.28), and as Seabrook points out himself, live music is actually saving the business of music by providing a strong source of revenue to artists as the rise of the digital music (and piracy) has reduced record sales revenue. Following ticket sales, many acts young and old, are raking in huge revenues every year. Seabrook reports that “forty-percent of all Live Nation seats go unsold…” what he does not report is the reason for that has more to do with ticket mis-pricing and acts like Jessica Simpson being staged in venues that are too large for a limited following.

Seabrook also states that “Both Live Nation and Ticketmaster are loathed by fans…” a claim that is true, but not because the live music business is dysfunctional. In fact, what is dsyfunctional is concert ticketing – and that is the exact reason why fans have little love for Live Nation and Ticketmaster. Seabrook points out that billions of dollars in ticketing revenue are lost to the secondary market without providing a single explanation for this very important observation.

While it is unclear if the secondary market is a $2 billion or a $25 billion business, one thing is for sure, that the size of resale profits is absolute evidence that Live Nation and Ticketmaster cannot effectively sell tickets. It is a wonder how Seabrook could write an article called ‘The Price of the Ticket’ and not want to find out why artists like Bruce Springsteen and Trent Reznor (who both despise scalping) do not depart from letter writing and blogging and take an activist role in addressing issues that have a huge impact on ticket pricing.

For example, as Seabrook points out in his article, Springsteen’s own management team kept 2,262 of the best seats out of the public sale for his May 21, 2009 show, leaving only 108 available. This common practice constrained supply and put a huge price premium on the 108 tickets put up for sale – making them prime targets for secondary market speculation. If Springsteen hates scalpers, why would he stand for under-supplying the market and feeding resale demand? We never get a clear answer other than that his management needed to hold back tickets for potential VIP’s. It is inconsistent to claim your concerts are intended for regular people and that tickets should be equal access and then hold back the best seats for celebrities who can well afford their own tickets.

Finally, Seabrook claims that “ticket scholarship is a neglected field.” To the contrary. there are a good number of scholarly papers on ticket resale, including a small sample posted on this blog. While there are few dedicated ticket scholars, the topic has been widely covered for over ten years. It is true that there are not many studies that examine actual pricing and resale, but this is because Ticketmaster and Live Nation generally refuse to support resale scholarship (though they have done so in two limited cases). [And, Seabrook, if you happen to read this, Kruger’s ‘Rockanomics’ paper studies primary ticket markets and its tiny reference to resale is not empirical. The Sorensen/Leslie paper is the most current and complete analysis of both primary and secondary ticket sales.]

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