The secondary market refers to the resale of tickets after they have already been sold by the primary ticket seller. This includes tickets resold through ticket brokers, resellers, secondary marketplaces like StubHub, or by fans themselves.
What is a primary ticket market?
The primary ticket market is the first sale of tickets directly from the source. This includes:
- Venues selling tickets directly to fans
- Artist or team box offices selling tickets
- Official ticket sellers like Ticketmaster contracted by venues
Primary market tickets are sold at face value prices set by the artist, team, or venue. These are the initial, official ticket prices.
What is the secondary ticket market?
The secondary market is where tickets are resold after the initial sale on the primary market. Sellers in the secondary market can ask any price they want, allowing tickets to be resold potentially above or below face value.
There are several key players in the secondary ticket market:
- Ticket brokers – Companies that buy up tickets specifically to resell at a profit. They may have ticket buying bots that purchase quickly.
- Resellers – Individual ticket holders selling extra tickets they have for an event, often just to recoup costs.
- Secondary marketplaces – Resale sites like StubHub and Vivid Seats that act as middlemen connecting buyers and sellers.
- Scalpers – People who buy tickets only with the intent to resell for profit, often right outside venues.
Why does a secondary market exist?
There are several key reasons a vibrant secondary market exists for event tickets:
- Fixed supply – There are only so many seats, making tickets limited. When demand exceeds supply, a secondary market emerges.
- Underpricing – Venues may intentionally underprice tickets, knowing the secondary market will correct prices.
- Changing circumstances – Fans resell tickets if they can no longer attend an event due to schedule changes.
- Profit motives – Some buyers hope to profit by reselling hot tickets above face value.
Is the secondary market legal?
In most cases, yes. Reselling tickets is legal in the United States and many other countries. However, some states have enacted restrictions or bans for certain scenarios. There are also ongoing debates about regulation.
Some key legal considerations:
- Many states ban ticket scalping right outside venues to protect consumers.
- Some states restrict using bots to buy up tickets during initial sales.
- Venues, teams, and artists may prohibit ticket resales as a condition of purchase.
- Deceptive practices like speculative ticket listings can violate consumer protection laws.
Why is the secondary market controversial?
While reselling tickets is largely legal and accepted, some aspects of the secondary market generate controversy and debate.
- High prices – Tickets can become very expensive on the secondary market, pricing out fans.
- Unofficial sellers – Some platforms have issues with counterfeit or invalid tickets.
- Lack of regulation – Critics argue more regulation is needed to protect consumers.
- Unethical tactics – Things like ticket bots and speculative listings are seen as against the spirit of fair sales.
As a result, there are frequent calls to change laws governing ticket resales to protect consumers and clamp down on predatory practices. But attitudes remain mixed, as reselling provides value too.
What are the benefits of the secondary ticket market?
Despite controversies, the secondary market also provides some important benefits:
- More options – Fans have more opportunities to buy tickets, even sold out events.
- Lower prices – Secondary market prices can also be below face value if demand is low.
- Convenience – Platforms make it easier to resell or find resold tickets.
- Transferability – Tickets can be resold if plans change vs. being wasted.
The secondary market essentially allows tickets to be treated as commodities rather than one-time-use products. This provides more flexibility for both buyers and sellers.
Are secondary market prices usually higher?
Secondary market ticket prices are often – but not always – higher than face value. Whether a specific ticket will have a higher resale price depends on:
- How in-demand the event is
- If the event is sold out
- If the tickets are for front row, VIP, etc.
- How close the event date is
For very high-demand events like playoffs or concerts by major artists, secondary prices can be many times face value. But resale prices also fluctuate based on supply and demand in the marketplace.
Average resale ticket price data
Event | Average Resale Price | Premium Over Face Value |
---|---|---|
2022 Super Bowl | $7,308 | 276% |
The Rolling Stones 2022 Tour | $434 | 88% |
2022 MLB All-Star Game | $389 | 43% |
Coachella 2022 | $558 | 119% |
For major games and popular concerts, average resale prices commonly exceed face values by 50-100%. But for lower-demand events, resale can be below face value.
How does the primary market try to limit resales?
Teams, venues, and artists try to discourage mass resales through various efforts like:
- Imposing ticket limits to prevent bulk buying
- Requiring identification matching ticket holders upon entry
- Cancelling or revoking tickets suspected of being resold
- Using paperless mobile-only ticketing
- Prohibiting ticket resales as a condition of purchase
However, these restrictions often have limited effectiveness. Sophisticated brokers find ways around limits. And platforms like StubHub can resell mobile tickets by changing the ticket holder’s account details.
Are speculative ticket listings a problem?
Speculating, also known as “white-labeling”, is when tickets are listed for sale before the seller actually owns them. This can be misleading to buyers.
Common speculative listing practices include:
- Brokers pre-listing tickets they expect to buy once sales open
- Sellers listing extra tickets that exceed limits, hoping to later acquire
- Fake listings intended to gauge demand rather than make actual sales
These speculative practices are criticized for:
- Misrepresenting ticket inventory and availability
- Driving rapid price inflation when sales open
- Tying up money in bogus transactions
- Potentially defrauding buyers with invalid tickets
As a result, some states now have laws prohibiting speculative listings. But enforcement remains a challenge.
Are ticket resale bots legal?
Bots that automatically buy up tickets are controversial. Some key points on the legality:
- Federal law does not prohibit ticket bots, but they violate terms of use on most sales platforms.
- Around 30 states have enacted bans on ticket bots.
- New York’s ban has resulted in major lawsuits against resellers using bots.
- Some argue bots should be legal, as they increase efficiency and liquidity.
- Bots make it harder for fans to buy tickets at face value during initial sales.
Despite the ban in many states, sophisticated brokers still employ bots and workarounds like using thousands of credit cards. The debate over fairness and access versus free markets continues.
What protections exist for buyers of resold tickets?
Buyers on the secondary market have fewer protections than primary sales. However, there are still some safeguards:
- Many resale platforms offer guarantees against invalid tickets.
- Credit cards and services like PayPal offer purchase protection.
- State laws may prohibit deceptive speculative listings.
- Resellers with a long history and reputation have incentive to avoid problems.
Best practices for buyers include:
- Researching the reseller and platform.
- Using payment methods with protection.
- Avoiding sellers significantly undercutting market prices.
- Purchasing early before event to sort any issues.
How has the secondary ticket market evolved?
Some key ways the secondary ticket market has changed over time:
- Internet marketplaces like StubHub and Vivid Seats now dominate over brokers and classifieds.
- Mobile ticketing and instant digital transfers reduce frictions.
- Data analytics help resellers optimize pricing strategies.
- Social media provides new avenues for individuals to resell tickets.
- Upsells for related services like parking and merchandise are more common.
While often still controversial, the secondary market has become more robust, efficient, and price transparent over time through evolution and competition.
Conclusion
The secondary ticket market, where tickets are resold after initial sales, provides important benefits like increased flexibility and options for both buyers and sellers. However, the market also suffers criticisms related to unfair pricing, lack of protections, and unethical practices. The debate over finding the right balance of regulations continues. While the secondary market expands, primary sellers also implement more restrictions attempting to limit resales. Understanding the market dynamics, risks, and safeguards enables informed navigation of the secondary market for event tickets.