Ticket scalping refers to the practice of reselling tickets for popular events at prices higher than their original face value. Many ticket resale sites and brokers engage in this practice, buying up large quantities of tickets when they first go on sale and then reselling them at inflated prices closer to the event date.
This has become an increasingly controversial issue in recent years, especially when it comes to major concert tours and sporting events. Fans complain that scalpers make it harder and more expensive for ordinary people to get tickets. Yet some major ticket sellers seem to tolerate or even encourage scalping practices.
One company that has faced scrutiny for enabling scalping is Ticketmaster. Ticketmaster is the largest primary ticket outlet in the United States, with exclusive ticketing deals in place with many major venues and promoters. Critics argue that Ticketmaster’s policies and fees facilitate scalping and make it easy for professional brokers to buy up tickets and resell them at higher prices.
Why does Ticketmaster allow this?
There are a few possible reasons why Ticketmaster appears to tolerate scalping practices:
Higher convenience fees
When a ticket is resold through a site like Ticketmaster, they can collect their fees all over again. Ticketmaster imposes convenience fees on ticket buyers, typically around 25% or more of the base ticket price. When a broker resells a ticket they bought from Ticketmaster, those convenience fees get applied again. So Ticketmaster can generate higher overall revenues from the same ticket by allowing and enabling resales.
Profit from ticket resale sites
Ticketmaster owns several large ticket resale sites, such as TicketsNow and TicketExchange. These sites allow brokers and fans to resell event tickets, with Ticketmaster collecting a commission on every sale. By allowing brokers to acquire large quantities of tickets, Ticketmaster ensures inventory and traffic for its resale sites. Resale can account for substantial revenues and profits.
Partnerships with brokers
In some cases, Ticketmaster appears to maintain direct business relationships with ticket brokers and resellers. They may grant largeScale brokers special access to bulk ticket purchases or provide other advantages. This ensures brokers can acquire enough inventory to resell through Ticketmaster’s own resale channels.
Facilitating “platinum” tickets
Ticketmaster utilizes pricing tools like “Official Platinum” and “Dynamic Pricing” for in-demand events. This allows them to implement variable ticket pricing, similar to how airline tickets or hotel rooms can change in price. By using data and algorithms to adjust prices, Ticketmaster can implement scalping-like pricing themselves for premium tickets.
Criticisms of Ticketmaster’s policies
Allowing brokers, bots, and scalpers to buy up tickets and resell them at higher prices has drawn a lot of criticism from music fans, consumer rights groups, and anti-scalping advocates. Some of the main complaints include:
Limits regular fan access
When brokers use bots and inside connections to buy up all the tickets, it leaves fewer tickets available for regular fans to purchase at face value prices. Fans end up forced to pay inflated prices just to see their favorite artists or teams play.
Circumvents ticket limits
Many events will implement ticket purchase limits, like 4 tickets per customer, to try and reduce scalping. However, brokers can circumvent those limits and still buy tickets in bulk if the ticket seller allows it. Ticketmaster has been accused of not enforcing posted ticket limits.
Lack of transparency in fees
Critics argue the added fees from Ticketmaster’s resale sites and “Platinum” pricing lack transparency. Fans are not adequately informed about the true costs versus the original face value prices of tickets. The added fees often only become clear at checkout.
Takes advantage of fans
Scalping essentially exploits fans’ enthusiasm for live events. It allows companies and brokers to capitalize on people’s willingness to pay inflated prices for high-demand tickets that were already difficult to get at face value. Many view this whole system as unfair and harmful to regular fans.
Who benefits from the current system?
If scalping seems so unpopular, why does Ticketmaster continue to allow or even encourage it in various ways? As noted already, Ticketmaster and ticket brokers or resellers tend to benefit most from the current landscape.
Specifically:
Ticketmaster
– Generates higher convenience fees from each ticket resold
– Profits from running ticket resale marketplaces
– Secures steady inventory and traffic for its resale sites
– Implements variable “Platinum” pricing on its own platform
Ticket brokers and resellers
– Can acquire large amounts of tickets to resell at a profit
– Have preferential access to tickets through Ticketmaster
– Resell tickets on Ticketmaster’s own resale sites
– Operate in an environment with limited enforcement against scalping
Artists and promoters
– Benefit from having high-profile events sell out immediately, fueling buzz and media coverage
– Top performers can more easily demand higher performance fees and tour profits when tickets are in high demand
So the current environment enables many influential players in the live events industry to maximize revenues. However, regular fans often lose out.
Could artists do more to combat scalping?
In theory, artists themselves could take steps to limit scalping of their events. However, there are limitations and risks, which may explain why more artists have not taken forceful anti-scalping positions:
Restrictions from promoters and venues
Performers are often limited in terms of influencing ticketing policies, especially for large tours playing at major venues. Promoters, venues, and ticketing platforms like Ticketmaster typically control ticketing.
Complex ticketing ecosystem
Tours involve many parties – management, booking agents, promoters, venues, etc. Coming to consensus on scalping policies across all groups would be difficult. There are also long-standing industry practices that are hard to change.
Benefits of high demand
Having tickets be scarce and hard to get does generate publicity and perceived excitement around major tours. This benefits performers as well as promoters.
Risk of empty seats
Aggressive anti-scalping efforts like cancelling resold tickets could deter some secondary buyers and increase risk of empty seats. Most artists would rather perform to full venues.
Lost revenues
Though inflated on resale markets, high ticket prices still funnel back to the artist via royalties in many cases. Cancelled resales would mean less revenue.
So while artists could possibly exert more influence against scalping, there are trade-offs involved that may limit how aggressive they are willing to be.
What potential fixes or reforms have been proposed?
To try and address criticism of Ticketmaster and reform the ticket buying experience for fans, various solutions and proposals have emerged in recent years:
Stronger anti-bot laws
New laws and policies aimed at cracking down on unfair ticket buying bots could help limit large-scale scalping operations. This could create a more level playing field.
Tighter transfer limits
More enforceable limits on ticket transfers and resales per customer could make it harder for brokers to amass large inventories. This depends on tighter identity verification and enforcement by sellers like Ticketmaster.
More transparent pricing
All-in ticket prices should be clear upfront rather than added fees appearing later. This would create more informed consumers and possibly deter some high markups.
Lottery systems and waiting rooms
Sales alternatives based on random lotteries or virtual waiting rooms have shown some success limiting scalping and bots for high-demand events.
Paperless/digital tickets
Requiring ID or proof of purchase via mobile apps can attach tickets to individual buyers. This prevents scalpers from reselling already-purchased tickets.
Cancelling resold tickets
Actively cancelling tickets that get resold is more aggressive but limits professional brokers. StubHub and some artists like Taylor Swift have employed this.
Dedicated fan clubs and presales
Early access to tickets for fan club members helps loyal regular supporters and reduces dependence on general public onsales more vulnerable to scalping.
More artist and promoter control
Top artists taking stronger stances against scalping when negotiating tours could pressure promoters, venues and ticketing firms to address the issue.
Conclusion
Scalping activity is often enabled or tolerated by major industry players like Ticketmaster because it allows them to maximize revenues through added fees and secondary markets. Fans criticise these practices for making tickets unaffordable and limiting access. Completely eliminating scalping may be difficult given all the entrenched interests involved. However, a combination of technology reforms, oversight, and pressure from artists, regulators, and consumers could still make progress toward a fairer system for ticket buying. While limited supply makes scalping hard to stop altogether, there appear to be constructive solutions that could improve the landscape.