What happens when the event ticketing industry undermines itself?
Event ticketing is and always has been a hotbed topic in the entertainment industry. From struggling to find a pricepoint that both provides a deal to the public and a profit to the event, to ensuring that access to reasonably priced tickets is handled securely and fairly, the industry has it’s shares of headaches. Today I want to talk about just one: The secondary ticket market.
[bctt tweet=”Secondary Ticket Brokers: Scalpers or Saviors? @WhiskeyChick weighs in on the #ConcertTicket Industry!”]
What is the secondary ticket market?
The secondary ticket market is a blanket term to cover all event ticket sales that happen outside of the official venue-managed box office, both online and off. This includes fan club pre-sales, ticket brokers, scalpers, and individual resellers. These days almost all of these transactions are handled online through sites like StubHub, TicketNetwork, and Craigslist. There are even Facebook ticket exchange groups and ebay auctions for the bigger events.
What is the difference between a scalper and a broker?
The definitions vary depending on who you ask, but generally, a ticket broker is a licensed agent who does business in accordance with their local laws and tax codes, acquiring batches of event tickets and re-selling them for a basic but standard transaction fee. They offer a money-back guarantee on the validity of the tickets they sell, and are most often insured in the event of a bad transaction. Full disclosure: I work with ticket brokers at CountryMusicOnTour. A scalper is simply a person who buys tickets at or below face value and attempts to sell them for a profit.
How do brokers get so many tickets so fast?
The most common tactic for high-volume ticket brokers is to join the fan clubs and email lists of major performers, and purchase blocks of tickets during the promo-code pre-sale. They in turn list these tickets immediately on the various secondary market sites and capitalize on early traffic. This is one of the two best times to purchase tickets from the secondary market. The other is in the final 24 hours before an event when venues and promoters release unused seating inventory that may have been held back for promotional reasons. If you do wait till the last minute, it is especially important that you choose a trusted ticket brokerage that provides a guarantee and immediate e-ticket delivery.
The second way brokers beef up their inventory is to purchase additional blocks on the event’s official onsale date. Most will use specialized software that helps them cut through the crowd online, which admittedly gives them an unfair accessibility advantage over the general public.
And finally, individual ticket holders who find they can not attend the event, or in some cases season ticket holders who want to sell off single dates to offset the cost of the season will list their own tickets online or sell to a brokerage at discount rates rather than see those tickets go unused.
Does that mean the ticketing agency is profiting twice off a single sale?
In certain cases, yes. If the tickets are purchased at the original ticketing outlet, and then resold on a subsidiary site owned by the same company, then that parent company made both their original profit from the first sale, and then their share of the secondary sale as well. A good example of this is Ticketmaster and their partner service, TM+. In many cases the primary ticket seller does little to distinguish the face value tickets from the resell tickets, most likely in the hopes that customers will make their selection from all of the available inventory regardless of the original face value.
Then why do people still buy from the secondary market? Shouldn’t we stop the cycle?
I don’t believe we should stop the cycle, but I do believe there needs to be more transparency in it. Not every event-goer has the luxury of having the money for their event the moment official ticket sales start. Nor might they have access to a computer or are they able to get through the mad traffic rush to snag those seats. Yes, that is part of the excitement of getting the tickets you want, but it’s just not an option for everyone. The secondary ticket market serves those fans well by making tickets more accessible to the general public.
Where the system breaks down is in the lack of pricing transparency. Those who buy their tickets on the secondary market know that they will pay a fee above and beyond the original ticket seller’s grand total for the convenience of buying on their time and under more flexible terms. What they often don’t know is how much their end cost has gone up. One broker will charge a lat transaction fee while another marks up the face value of a ticket by a certain percentage, and the end consumer is often shell-shocked when they receive the tickets and see the original face value is sometimes pennies on the dollar they paid. In order to remove the “scalper” stigma from the secondary ticket market, we should insist on price caps on speculative pre-sales and full transparency on the ticket’s original face value when being offered up in these secondary ticket marketplaces.