The resale ticket market has exploded in recent years, with massive growth fueled by online ticket marketplaces like StubHub and Vivid Seats. Fans can easily buy and sell tickets for a profit, turning concerts into a speculative market. This has led to increasing ticket prices, as brokers try to snap up as many seats as possible hoping to sell them for more.
But what happens when those tickets don’t sell? Despite the demand, even popular shows don’t always sell out on the secondary market. Late cancellations or changes in schedule can alter demand rapidly. And sometimes brokers simply misjudge interest and are left holding unwanted tickets. So what becomes of these unsold resale tickets? There are a few potential outcomes.
Returned to the Original Seller
One possibility is the unsold tickets are returned to wherever the broker or scalper first acquired them. Primary ticket sellers like Ticketmaster often allow season ticket holders or other buyers to later place their seats on resale sites. If the tickets never sell, the original buyer is stuck with them again.
This outcome is more likely with speculative resale buys, where brokers snapped up tickets hoping to profit but couldn’t find buyers. The tickets wind up back with their original purchaser, who chose to try and resell. This means brokers lose their upfront investment on the tickets they couldn’t flip.
Resold at Reduced Price
Another common resolution is the unsold tickets are resold, but at a cheaper price. Brokers initially try to sell for a large markup. But as an event nears with inventory left, they’ll steadily lower prices attempting to unload tickets and recoup any money.
This reactive repricing often happens in the last few hours before an event, sometimes at fractions of the initial asking price. Brokers would rather take a smaller profit or even a minimal loss, as opposed to eating the whole ticket value.
Discarded or Given Away
As a last resort, extra tickets may be discarded or given away. As the event time approaches, the ticket resale value drops to near zero. At that point brokers may decide the time and effort to resell isn’t worth the meager return.
Tickets are essentially worthless after the event occurs. Some brokers may attempt to give away or discard leftover inventory instead of lowering prices even further. They choose to lose just the initial purchase amount, rather than investing additional time and effort for minimal gain.
Cancelled and Refunded
For very late unsold tickets, brokers can sometimes cancel the tickets and obtain a refund. Many ticketing platforms allow cancellations up until a certain time before the event, such as 48 hours. By cancelling, the broker recoups the ticket value instead of losing the full amount.
Of course, this option depends on the refund policies in place. Ticketmaster and others have stricter time limits or fees for broker cancellations. And for resale sites like StubHub, individual sellers may not allow cancellation. But when possible, last-minute cancellations let brokers cut their losses.
Factors Impacting Leftover Tickets
Why do some tickets not sell on the secondary market? Here are the main factors that can lead to excess ticket inventory after the initial sales frenzy:
Overestimating Demand
Aggressive brokers sometimes buy up massive numbers of tickets as an investment. They hope to capitalize on high demand and limited supply. But if they overestimate interest, they can be left holding hundreds of unsold seats. Popular artists with volatile followings, like Taylor Swift, are prone to these misjudgments.
Last-Minute Schedule Changes
Sellers anticipate demand based on the event date, time, and details. But late cancellations, postponements, or artist dropouts can instantly reduce interest. Brokers can be left with large supplies they no longer expect to sell out.
Special Promotions
Extra batches of seats released at the last minute, like radio promotions, can flood supply. Venues, artists, and promotors want to fill every seat. So they offer new discounted deals and giveaways close to events that make existing resale tickets less appealing.
High Initial Prices
If brokers overprice inventory too high initially, asking prices may exceed what buyers are willing to pay. As events approach, last-minute lower prices bring demand. But early, the same tickets languish unsold at higher amounts. Setting prices too ambitiously high can backfire.
Diminished Interest
Hype and excitement don’t always last. The frenzy around tickets drops off over time. Casual fans lose interest, income gets diverted elsewhere, and other events compete for limited entertainment budgets. Hot acts grow cold. What once seemed like a sure-bet, profit-generating event turns into a dud.
Big Losses onUnused Tickets
Leftover inventory leads to big money sunk on unused tickets. In the worst cases, brokers pay hundreds of thousands in upfront costs they fail to recoup. Here are some notable recent examples:
Taylor Swift, Reputation Tour
Huge demand was predicted for Swift’s 2018 tour, her first in years. But brokers overestimated wildly. Hundreds of great seats per show, bought for between $200-$1000, resold for pennies or went unused. Total losses estimated ran into the millions.
FIFA World Cup, Brazil 2014
A million tickets were purchased upfront by brokers, hoping to resell at large profits. But after dismal sales, over 350,000 tickets were unused, costing an estimated $100 million in sunk costs.
Olympic Games, Rio 2016
Up to 20% of tickets were unsold, as Rio Olympics mania never materialized. With brokers sitting on thousands of tickets, last minute prices collapsed to as low as $3 per seat, even for prized events.
Protecting Yourself as a Buyer
To avoid getting stuck with unused tickets yourself:
Buy Early
Prices normally rise over time up to events. Buy early to get better deals before demand spikes. Trying to time the market’s lowest point can be costly.
Avoid Last Minute Buys
While tempting, last minute deals aren’t always a bargain. The event could sell-out or surplus inventory may simply not exist. Stick with reliable sellers.
Know Refund Policies
Understand cancellation and refund rules before you buy. Reselling sites like StubHub offer guarantees, but individual sellers may not. Check before purchasing.
Are Unsold Tickets a Growing Problem?
The pain of unsold tickets seems to be getting worse in recent years. Why the trend?
Rise of Speculative Resale Market
With big money in play, speculative brokers take bigger risks. They buy first and try to profit later. But concert economics and consumer demand don’t always follow expectations.
Higher Initial Prices
As brokers bid up prices, there’s further to fall if demand is soft. $1,000 tickets crashing to $100 leads to huge losses. Lower initial prices would reduce exposure.
Tour Schedule Changes
Top artists now route tours to maximize profits over fan convenience. Fickle schedules mean more cancellations and alterations that undermine broker plans.
Focus on Hitting Sales Milestones
Artists fixate on instantly selling out shows as proof of popularity. But this leads to pricing tickets below equilibrium then dumping seats later at deep discounts, conflicting with brokers’ sales.
Potential Ways to Reduce Unsold Inventory
The industry is reacting, trying to stabilize the resale market and minimize unused tickets. Here are some emerging tactics:
Paperless Ticketing
With digital-only tickets, capacity is capped accurately and last minute giveaways stopped. Brokers have fewer options to unload inventory.
Tighter Refund Window
Shorter refund cutoffs, like 48 or 24 hours out, reduce brokers’ ability to ditch unsold tickets for a refund.
Resale Market Coordination
Direct resale partnerships between vendors and sellers helps balance pricing and inventory between primary and secondary markets.
Minimum Resale Pricing
Price floors prevent brokers dumping tickets as events approach. But it also sustains higher consumer prices.
Capping Resale Volumes
Limits per buyer prevent speculative stockpiling. New sales rules also try to restrict seasonal ticket holders from reselling a majority of their seats.
Does the Resale Market Need Regulation?
Some argue the secondary market needs government intervention to rein in abuses. But regulation faces challenges:
Stifling an Economic Marketplace
Free markets theoretically manage supply and demand most efficiently. Imposed controls risk unintended distortions, inefficiencies, and barriers.
Murky Legality and Politics
Ticket resale occupies a grey zone between economic activity and consumer protection. Lobbying can easily stall reform efforts.
Difficult Enforcement
Regulation requires consistent monitoring and enforcement across 50 states. Ambiguous rules open loopholes for brokers to exploit.
Risk of Higher Prices
Capping brokers may curb speculative excesses. But it could also reduce competition and push prices higher for consumers.
Conclusion
The soaring resale concert ticket market has a dark side – thousands of unsold tickets and millions in broker losses when demand fails to meet aggressive expectations. This waste harms the industry, artists, and fans.
While regulators and venues grapple to find solutions, some losses seem inevitable in such a volatile, speculative marketplace. Better analysis, transparency, and risk management appears critical to minimize the fallout. With growing global demand for live entertainment, unsold ticket surpluses will likely remain an obstacle for years to come.