Ticket Re-Sellers and Scalpers

Trent Reznor wrote a post on his Nine Inch Nails (NIN) forum about re-sellers and scalpers of concert tickets.  In it, he discusses the motivations for TicketMaster to encourage the secondary market for tickets, which leads to scalpers poaching tickets and re-selling to customers at huge mark-ups and at huge inconvenience to them.

As I’m sure you’re familiar with, event ticket purchasing is a scam, the bigger the event is.  Smaller events use an online purchasing framework and charge a usage fee, which you’re somewhat willing to pay because event organizers don’t have the infrastructure to go around middlemen.  But as events get larger, the more likely they’re swept up into TicketMaster’s orbit.  TicketMaster is tightly coupled with the physical venues where events are held, and thus they can control all distribution, access, and promotion.

If someone were so inclined, this subject would probably make for an excellent muck-raking book.  I certainly don’t understand the business and economics behind it but I think most of us can intuit what’s going on behind the scenes.

So Reznor, who put his last album up on his web site for free under a Creative Commons license, and who put his album with Saul Williams up for $5, is pissed off with the music industry labels and monopolists.

And it’s fair to say that most of us are too.  I have not been to many concerts in my life.  The sort of ninja moves you need to obtain tickets are not in my repertoire.  People fight over a small pool of tickets released online at a known time, crushing servers in the process.  Tickets are sold out in minutes.  This certainly incentivizes certain people to game the system, knowing they can re-sell the tickets at a mark-up that companies like TicketMaster benefit from (especially since they apparently own re-sellers, according to Reznor’s post).

TicketMaster is pushing a future of auctions, but this is still a closed system, so essentially all it’s doing is creating more profit for them while letting us see just how much we’re getting screwed in a public arena.

So I just skip out on concerts.  Some bands just plain suck live, anyway.  So the variables required for me to find a concert I can get tickets to while also enjoying and making sure my friends can all go too are too much for me.  I just give up.

Right now with the advent of internet collaboration (through web 2.0/web 3.0 tools) and the success of the change.org movement, a bunch of people are looking to organize to solve systemic problems that have existed since before most of them were born.  A lot of problems were created in the 50’s and 60’s and were institutionalized in people like in my generation:  we grew up buying CDs from Columbia House and seeing a newspaper on our front lawn and watching junk food ads in between our Saturday morning cartoons.  The next generation won’t even know what I’m talking about.

It’s quite amazing to see the problem-solvers approach every entrenched, fucked-up problem out there.

The Omnivore’s Dilemma, which I’m finally reading now, discusses our culture of corn and petroleum.  So people are trying to figure out how to wean our culture off the industrial food complex.

Electricity, oil, and cars go hand-in-hand.  They have promised us cheap solutions but those solutions are going to be far less palatable very quickly.  So people are now excited about solar energy, sustainable living, electric cars, the smart grid, and radically new forms of housing and energy usage to break away from the cartels.

American politics has become somewhat frozen — the Democrats and Republicans for a while became clients to Bush’s administration, both differing very little and unwilling to break too far from what the elite thought was.  So people voted in a candidate using web sites and community organization and grassroots initiatives.  That energy is now being put into transparency and collaboration tools for monitoring the government, and insurgents within Obama’s administration are now wanting to push government data out to the public, after Cheney’s attempt to classify everything.

Universities pay exhorbitant license fees for software and administration tools.  But MIT just decided to open up its scholarly articles for free while people like Kevin Donovan and CNDLS at Georgetown are pushing free tools and OpenCourseWare as alternatives.

Cellphones are notoriously tying together handsets, access providers, spectrum control, and software in the United States.  It’s a very restrictive model.  Google, while out to make a profit, is now testing the limits of the incumbent system with Android, its fairly open system that will work across devices.

Then there’s the busting of cable TV and the advent of online content streaming…  And new journalism models…  And more and more and more.  Information is being distributed faster than organizations can lock it down.  So what’s going on is a war.  And we’re winning.  All these shitty businesses that exist by locking people into a closet and abusing them are now being blown apart by the internet and by peoples’ sharing of ideas.  Facilitated by a brutal economic and financial crisis that no one can avoid.

Concerts are another battleground.  Why can’t music artists successfully organize against companies like TicketMaster?  If more of them worked like Reznor does, eschewing contracts and the desire to maximize profit without any of the negative effects of current ticket-selling schemes, then they could quickly tip the balance.  Wikipedia’s “Ticket resale” page lists alternatives.

Lottery…  Have a period of time where anyone can offer to purchase tickets.  But then winners are randomly selected.  This allows anyone a chance to get in.  Tie it to credit cards.

Authentication…  Print out names and photos on tickets, then verify at the gates.

Float prices…  Obviously some people will pay more.  Let them pay for the front seats, fine.  Float the front-row prices but make everything else lottery.

Distribution…  Must be combined with floating prices.  Bands should see concert tours as a way to promote their brand, not just make a shitload of money from each appearance.  That is, internet stream the concert to all those who couldn’t make it to the venue.  Bands may not want this kind of accountability though, to be judged by the same online viewers through each performance every other night.  But that drives up incentives to produce quality while maximizing potential future customers of your band’s music and product.

Venues…  Venues need the big acts to make revenue.  What if all these abandoned stores and buildings were turned into cheap venues themselves? (they’re already being filled with churches, libraries, and other public centers)  Then you don’t need the mid-size venues anymore.

It’s a war.  A war on the middlemen who begin to enjoy their cut a little too much and try to grow it.  A war on the people who act as gatekeepers between content and consumer.  It’s a war they are going to lose.

The Great Disruption is going to destroy the old infrastructure and build a sustainable infrastructure in its place, one that links value directly with those willing to pay for it.  In time, the middlemen will be back in new forms, but for now, the internet is giving us infinite tools to take control of our lives back.

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2 Comments

Filed under Business, Internet, Music, Tech

2 responses to “Ticket Re-Sellers and Scalpers

  1. Long live disintermediation!

  2. Tracie

    Yet again, you’ve touched on a topic close to my heart. I personally experienced Ticketmaster’s neat little trick of directing you to tickets now when supposedly no more tickets are available. Nice. Consumerist posted some bitching about it, and Springsteen complained too, but nothing shall stop the great TicketMaster!

    Taking a bigger viewpoint, it’s thrilling to see how the internet has helped expose the dirty secret of America: our businesses aren’t very innovative and our esteemed business leaders aren’t pure capitalists. We’ve been coasting for quite a while (hello automakers) and I think now we’re at one of those points in history where substantial changes occur. We can either see it as a challenge and a chance for better things, or we can just keep prolonging the old, tired ways.
    I feel for Obama, he was handed a helluva turd from Bush and a fickle public is looking for someone to blame. Already, they’ve lost ground to Republicans who’ve taken the lead and are using government intervention to bolster the faithful who were confused about some of Bush’s big gov actions. I’m rambling now, so I’ll stop.
    Keep the faith, Ben.

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