One of the best things to come out of all the recent press on Ticketmaster’s business practices is an examination of the legal ticket resale market. A recent story in the WSJ, for example, outlined how Ticketmaster sets aside 10% of the best seats in a venue for the artist, enabling him to resell them at a huge markup in the secondary “TicketExchange Marketplace.” In other words, artists are scalping their own tickets with Ticketmaster’s help. Not always, of course, but “more often than not” according to a post today by Trent Reznor on the NIN forum. In it Trent explains what happens to the premium seats NIN are allotted: they are passed on to fans in pre-sale, with stringent ID guidelines to ensure they are not resold (“I assure you nobody in the NIN camp supplies or supports the practice of supplying tickets to these re-sellers because it’s not something we morally feel is the right thing to do.”). He also acknowledges that by playing TM and LiveNation venues on the upcoming NIN tour, he is getting into bed with these guys (“I’ve learned to choose my fights and at this point in time…”). Also of note: “Be suspect of artists singing the praises of the Live Nation / TicketMaster merger. What’s in it for them?” Cough. Trent’s entire missive after the jump.
As we approach on-sale dates for the upcoming tour, I’ve noticed lots of you are curious / concerned / outraged at the plethora of tickets that somehow appear on all these reseller sites at inflated prices – even before the pre-sale dates. I’ll do my best to explain the situation as I see it, as well as clarify my organization’s stance in the matter.
NIN decides to tour this summer. We arrive at the conclusion outdoor amphitheaters are the right venue for this outing, for a variety of reasons we’ve throughly considered*. In the past, NIN would sell the shows in each market to local promoters, who then “buy” the show from us to sell to you. Live Nation happens to own all the amphitheaters and bought most of the local promoters – so if you want to play those venues, you’re being promoted by Live Nation. Live Nation has had an exclusive deal with TicketMaster that has just expired, so Live Nation launched their own ticketing service. Most of the dates on this tour are through Live Nation, some are through TicketMaster – this is determined by the promoter (Live Nation), not us.
Now we get into the issue of secondary markets for tickets, which is the hot issue here. The ticketing marketplace for rock concerts shows a real lack of sophistication, meaning this: the true market value of some tickets for some concerts is much higher than what the act wants to be perceived as charging. For example, there are some people who would be willing to pay $1,000 and up to be in the best seats for various shows, but MOST acts in the rock / pop world don’t want to come off as greedy pricks asking that much, even though the market says its value is that high. The acts know this, the venue knows this, the promoters know this, the ticketing company knows this and the scalpers really know this. So…
The venue, the promoter, the ticketing agency and often the artist camp (artist, management and agent) take tickets from the pool of available seats and feed them directly to the re-seller (which from this point on will be referred to by their true name: SCALPER). I am not saying every one of the above entities all do this, nor am I saying they do it for all shows but this is a very common practice that happens more often than not. There is money to be made and they feel they should participate in it. There are a number of scams they employ to pull this off which is beyond the scope of this note.
StubHub.com is an example of a re-seller / scalper. So is TicketsNow.com.
Here’s the rub: TicketMaster has essentially been a monopoly for many years – certainly up until Live Nation’s exclusive deal ran out. They could have (and can right now) stop the secondary market dead in its tracks by doing the following: limit the amount of sales per customer, print names on the tickets and require ID / ticket matches at the venue. We know this works because we do it for our pre-sales. Why don’t THEY do it? It’s obvious – they make a lot of money fueling the secondary market. TicketMaster even bought a re-seller site and often bounces you over to that site to buy tickets (TicketsNow.com)!
NIN gets 10% of the available seats for our own pre-sale. We won a tough (and I mean TOUGH) battle to get the best seats. We require you to sign up at our site (for free) to get tickets. We limit the amount you can buy, we print your name on the tickets and we have our own person let you in a separate entrance where we check your ID to match the ticket. We charge you a surcharge that has been less than TicketMaster’s or Live Nation’s in all cases so far to pay for the costs of doing this – it’s not a profit center for us. We have essentially stopped scalping by doing these things – because we want true fans to be able to get great seats and not get ripped off by these parasites.
I assure you nobody in the NIN camp supplies or supports the practice of supplying tickets to these re-sellers because it’s not something we morally feel is the right thing to do. We are leaving money on the table here but it’s not always about money.
Being completely honest, it IS something I’ve had to consider. If people are willing to pay a lot of money to sit up front AND ARE GOING TO ANYWAY thanks to the rigged system, why let that money go into the hands of the scalpers? I’m the one busting my ass up there every night. The conclusion really came down to it not feeling like the right thing to do – simple as that.
My guess as to what will eventually happen if / when Live Nation and TicketMaster merges is that they’ll move to an auction or market-based pricing scheme – which will simply mean it will cost a lot more to get a good seat for a hot show. They will simply BECOME the scalper, eliminating them from the mix.
Nothing’s going to change until the ticketing entity gets serious about stopping the problem – which of course they don’t see as a problem. The ultimate way to hurt scalpers is to not support them. Leave them holding the merchandise. If this subject interests you, check out the following links. Don’t buy from scalpers, and be suspect of artists singing the praises of the Live Nation / TicketMaster merger. What’s in it for them?
* I fully realize by playing those venues we are getting into bed with all these guys. I’ve learned to choose my fights and at this point in time it would be logistically too difficult to attempt to circumvent the venues / promoter / ticketing infrastructure already in place for this type of tour. For those of you about to snipe “it’s your fault for playing there, etc… ” – I know it is.
Kudos to Trent for trying to put scalpers out of business. He’s got his work cut out for him.