Wednesday, July 9, 2008

Scalpers Strike Again

One topic that I touched upon that probably stirred up the biggest debate on this blog to date was scalping tickets. Arguments were made on my behalf that scalpers often take away opportunities for true fans and that they make an unearned profit on those able to afford the hiked up prices, the ultimate goal of their venture. On the other side, arguments were made that scalpers, or "ticket brokers," actually help bands to fill the seats, and ultimately break even most of the time when you consider the balance between small shows and large ones, considering they have to resort to selling tickets to large shows cheaper than face value.

The break-even analysis, I think, is the downfall of ticket scalping - it's an excuse. I've never heard of a ticket broker looking to break even just to help out the bands, whether it be Cradle of Filth or Ricky Martin. If all of you are breaking even, then stop doing it. It's up to the bands to sell the tickets, and if they get over-eager and think they can sell out Giants Stadium and don't, that's their fault.

I bring up the debate again because of a headline I just saw: "Scalpers ask $1,500 for free Bon Jovi Concert" NYC gave out 60,000 free tickets to a Bon Jovi show in Central Park this weekend, limiting 2 tickets per person. And yet scalpers are trying to make a profit off of the people who did not get a chance to get some free tickets...that's unethical. If you buy tickets to a show with the intent of going and something comes up that prevents you from going, it's understandable to try to get your money back...but if you get them for free, that's just plain greedy.

Besides, even though I'm from New Jersey, I don't like Bon Jovi or Bruce Springsteen. I wouldn't go to a free show for either of them. Save your money fans...don't buy a free ticket.



7 comments:

Mike said...

::sigh::

Here we go again.

"The break-even analysis, I think, is the downfall of ticket scalping - it's an excuse. I've never heard of a ticket broker looking to break even just to help out the bands..."

It's not an excuse at all. Take your emotions out of it and think of it strictly in terms of business. A business makes strategic decisions. Some pay off, some don't. You hope that the ones that pay off generate enough profit to offset that decisions that didn't pay off. Most businesses are run conservatively and build upon modest profits. The ticket broker business is a much more volitile business. Good business decisions make huge dividends, bad business decisions break even or lose money. Because of the volitility and subsequent payoffs, there is much more room for error in the bad decisions... which is good because it's a insanely complex market.

"And yet scalpers are trying to make a profit off of the people who did not get a chance to get some free tickets...that's unethical."

Again, I'll refer you to basic supply and demand. When supply is limited, prices go up. The ticket market is a market like any other, as is the resale market. Is Capitalism unethical?

David Oblas said...

Cradle of Filth? should I assume that's a band? I mean, it's not literally a cradle of filth is it?

Oh no! that would be horrible!

KW said...

I realize how business works - scalpers create a business based on the business of others though. Take the stock market - anyone can profit from the success of a business that they are not directly involved in with some investment. The difference here is that we're talking about entertainment - brokers interfere with fans, which is my ultimate point. Stock market investors don't bum people out because they couldn't get their hands on a ticket.

Music artists are capable and responsible for marketing themselves and choose a venue, one basis of which is upon how well they can sell the tickets. They make their own investments - as a music artist, they themselves are a business, making strategic decisions that sometimes pay off just as you say ticket brokers do. By scalping tickets, you can make it look like the artists that made bad investments actually made good ones. By scalping tickets for artists that make good investments, you're making a profit off of their success at a loss for the fans.

There are other factors that exist though. Before, you made the point that if a band really cared, they would play more shows at bigger stadiums. Not all artists are like that. Not all artists want their fans to be watching them from a mile away with binoculars, gasping for air while their nose bleeds. Some bands play smaller venues so that everyone at the show can get a genuine experience.

Similarly, in this instance, some artists like to give back to fans with a free show. When it comes to tickets, supply is always limited. Yes, the ticket market is like any other market, but that doesn't mean it should be treated like any other market - not when it can be and should be treated as measured by fans. Capitalism is the American way - it's not unethical in principle. The beauty of it is that it allows people to act in their own self-interest. And because of that, it can be unethical.

KW said...

And yes, Dave...Cradle of Filth is a band. You can imagine by the name of them that they are basically the polar opposite of Ricky Martin, which was my sarcastic point.

Tom Whalen said...

Gee, what's wrong with Ricky Martin?

(Just kidding)

Mike said...

"Before, you made the point that if a band really cared, they would play more shows at bigger stadiums. Not all artists are like that. Not all artists want their fans to be watching them from a mile away with binoculars, gasping for air while their nose bleeds. "

Probably splitting hairs at this point, but by lifting my quote out of context, you also convoluted the meaning. I was referencing the fact that artists who let their fans pay ridiculous prices on the ticket aftermarket don't really care what the fans have to pay. I did not mean that the artists don't care about the fans. However, if the artists cared about the aftermarket prices, they would act, not complain. They could bring down prices easily by increasing supply. Yet they don't. If they want a more cozy atmosphere, add more shows. If they want to play bigger shows, so be it. This is precisely why Springsteen tickets are so cheap in NJ - he CARES about what people are paying for them, so he adds more shows. When those sell out, he adds even more.

"Yes, the ticket market is like any other market, but that doesn't mean it should be treated like any other market - not when it can be and should be treated as measured by fans."

We disagree on this point. It's a free market, let it act like one.

As a parallel, look at oil prices. Don't look at all the stupid chain emails that go around that spout unfounded, ill-informed, and stupid anti-Islamic and anti-Middle Eastern rhetoric to get a rise out of people. Those rah-rah-lets-boycott-gas-for-a-day emails don't get it right. The real problem with oil prices -- right now, in the short term -- is hysteria in the futures markets. Supply and demand hasn't changed to justify the price fluctuation. Pure speculation and FUD has caused the prices to go through the roof.

Should we regulate it and artificially lower the prices because, well... we all depend on oil for our massive H3s and Escalades and Jimmy and Suzy can't get to soccer practice, and therefore Mommy has no excuse to go buy her $7.25 Extra whipped, skim, 2 sugar, venti vanilla latte with a touch of cinnamon? And with oil prices so high, oh man... there might not be too many $7.25 latte's in that soccer mom's future anyway! Hurry! Regulate the market so the American family doesn't crumble in debt due to the mean old oil companies!

NO!

The market will, as it always has, correct itself. I referenced the "Invisible Hand" in the initial conversation, and it's worth mentioning again.

"The difference here is that we're talking about entertainment - brokers interfere with fans, which is my ultimate point. Stock market investors don't bum people out because they couldn't get their hands on a ticket.

Once again, subjective. Publicly traded stocks effect real people too. I'm sure some people at Enron would disagree that a stocks can't bum people out.

KW said...

On your first point, it's all relative as to whether a band cares about aftermarket prices. The whole reason I brought up this entire topic of scalping on this blog was in response to how NIN is responding to exactly that - by trying to make sure that fans pay the price that NIN sets. Some artists do care. Hopefully, more will catch on to how the problem can be solved and do what NIN has done. But other artists are ignorant. And some artists don't care as you say, like Madonna, who is trying to get a cut of these secondary markets.

On your second point, you're right...we disagree. Let's leave it at that - I won't get into your comparison to Starbuck's soccer moms and oil prices.

And on your 3rd point, about stocks bumming people out...you're right. Stocks can bum people out - the investors. Your analogy doesn't link to the fans that get bummed out...it links to the scalpers who get bummed out with a bad investment.