Scalping, also known as ticket reselling, is the practice of buying event tickets and then reselling them for a higher price. This has become increasingly common with the rise of online ticket resale platforms. Scalpers often use bots or hire people to buy up large amounts of tickets the moment they go on sale. The tickets are then resold on secondary markets for a profit. This can make it very difficult for regular fans to buy tickets at face value. But does this practice actually benefit the artists themselves?
Do artists see any of the money from scalped tickets?
In most cases, no. Artists and event organizers rarely receive any additional revenue from tickets that are resold by scalpers. The original ticket sale proceeds go to the artist, venue, promoters, etc. Any profit made from reselling goes to the scalper. Many big artists have spoken out against scalping for this reason. They don’t like seeing their fans get ripped off trying to attend shows. However, that’s not to say artists never benefit indirectly from scalpers.
Exceptions where artists get a cut
There are some exceptions where artists can get a percentage of resale revenue:
- If the event organizer or artist chooses to partner with a ticket resale platform, they may get a percentage of fees on any resold tickets.
- Some artists (such as Bruce Springsteen) have started using “paperless” mobile-only tickets that cannot be resold in order to cut down on scalping.
- Few ticket resale platforms, like Twickets, only allow tickets to be resold at face value or less. This eliminates profiteering from scalping.
But these types of arrangements are still relatively rare in the live event industry. Scalpers who resell through independent online marketplaces are keeping all of the extra profit for themselves.
How can scalping indirectly benefit artists?
Though artists may not directly profit from scalpers, there can be some indirect benefits:
Higher attendance at shows
Scalping provides a way for shows to sell out even when tickets are initially priced below market demand. Economic theory argues that optimal pricing would eliminate scalping. But artists often prefer to price tickets low for the sake of their fans. Scalpers help fill any remaining demand.
Sellouts are beneficial for creating excitement and publicity around events. More attendees also spend more on merchandise, food, drinks, etc. at the venue. Higher overall revenue can enable bigger productions.
However, scalping may also reduce attendance if secondary market prices become truly unaffordable for most fans. There’s a delicate balance of maximizing attendance through optimal pricing.
Reduced risk of losses
Scalping can reduce financial risk for event organizers and artists. Typically events need to sell 70-80% of tickets just to break even after covering all costs. If an event fails to sell enough initial tickets, scalping provides a potential outlet to improve sales. Reselling at least generates some revenue, as opposed to empty seats.
Of course most artists would prefer to make events accessible to their fans. They aren’t aiming to produce shows at high risk. But the buffer of potential scalping can reduce anxiety about unforeseen low demand.
Higher merchandise sales
As noted, larger crowds due to scalping can drive more in-venue merchandise sales. Musicians and bands often make a significant chunk of their touring income from merch.
By putting more fans in seats, scalping may indirectly increase the number of touring t-shirts, albums, hoodies and other memorabilia sold at each show. However, these higher merchandise revenues don’t necessarily make up for fans paying inflated resale prices.
Positive publicity from sellouts
Scalping can create headlines and social media buzz about an event “selling out.” This free publicity has promotional value for artists. Fans rush to buy scalped tickets in fear of missing out. A reputation for being in high demand and selling out incentivizes larger future venues.
However, excessive scalping also risks backlash if seen as unfairly preventing real fans from buying tickets. There are downsides from appearing too exclusive or overpriced. The publicity benefits must be balanced carefully.
Do most artists oppose scalping?
Many high-profile musicians have voiced opposition to scalping:
- Bruce Springsteen sued Ticketmaster over scalping and now uses paperless tickets.
- Adele implemented paperless tickets and criticized unfair resale prices.
- Garth Brooks cancelled shows over rowdy scalpers outside venues.
- The Foo Fighters mocked scalpers by performing in disguise at a small venue.
- Kid Rock made tickets free for his shows to undermine scalpers.
These artists seem to view scalping mainly as a detriment to their authentic relationships with fans. They don’t appreciate third parties profiting off their popularity without permission.
However, some musicians have indicated more neutral or favorable stances on scalping:
- Kanye West defended people’s rights to resell tickets, despite his own frustrations.
- Mick Jagger acknowledged economic arguments in support of scalping.
- Gene Simmons of Kiss said “the market is never wrong” in supporting scalpers.
These views acknowledge the complexities of balancing supply, demand, and accessible pricing.
What economic theories apply to ticket scalping?
Most economists view scalping as an example of an efficient market for a scarce resource (tickets). The key economic theories are:
Price discovery
Scalpers help “discover” the true market value of tickets based on supply and demand. The initial ticket price may undervalue scarcity. Resellers bid up the resale price until it balances out supply and demand. This is considered an efficient allocation of resources.
Price discrimination
Scalping allows a form of price discrimination between high and low willingness-to-pay customers. Many fans pay low initial prices based on ability to pay. Wealthier fans pay scalpers a premium for additional convenience and access. This captures more consumer surplus overall.
Arbitrage
Scalpers take advantage of pricing inefficiencies between primary and secondary markets. They profit from arbitrage just like traders buying and selling assets. This helps correct inefficient pricing and information asymmetries.
However, many argue these theories fail to account for fairness, ethics, and public goods that are not pure commodities. Excessive scalping has led some jurisdictions to regulate ticket resale markets with price caps and other consumer protections.
Do ticket release strategies affect scalping?
How tickets are initially sold can impact opportunities for scalping:
Slow ticket release
Gradually releasing batches of tickets over time, rather than all at once, helps thwart scalper bots from sweeping up large volumes. This gives more real fans a chance to buy from the primary seller.
Lotteries and waitlists
Prioritizing sales through randomized lotteries or waitlists makes it harder to scalp, since resale is prohibited. Scalpers avoid wasting time on uncertain ticket access.
Paperless/mobile tickets
Requiring ID or a credit card tied to entry prevents scalpers from reselling. But it also reduces options for legitimate fans to transfer tickets.
Higher initial pricing
Setting prices higher from the outset makes scalping less profitable and may deter bots. But it makes events less accessible to less affluent fans.
Balancing all these factors poses challenges for maximizing fairness, affordability, and availability. No perfect system exists.
Conclusion
In summary, ticket scalping offers some potential indirect benefits but rarely direct profits for artists. Savvy artists use ticketing strategies that aim to throttle scalpers while remaining fair to fans. Outright opposition is giving way to nuanced attempts at balancing legitimate access, optimal pricing, and financial viability. In the end, artists strive to sustain connections with their audiences above all else.