Ticketmaster allowing verified resale tickets on their platform is a controversial practice that has drawn scrutiny from regulators, artists, and fans. Ticketmaster is the largest primary ticket seller for concerts and sporting events in the US and also owns several large secondary resale marketplaces. Critics argue that Ticketmaster facilitates scalping and inflated prices by enabling the resale of tickets alongside primary market tickets on their platforms. However, Ticketmaster defends the practice as providing a safe resale option and capturing revenues that would otherwise go to unauthorized resellers. The motivations and impacts of Ticketmaster’s verified resale ticketing are complex.
Background on Ticketmaster
Ticketmaster is the dominant primary ticket seller for live entertainment events in the US. The company sells tickets on behalf of venues and event organizers through its website and mobile apps. Ticketmaster has faced antitrust concerns in the past for its lack of competition in primary ticket sales. In 2010, Ticketmaster and Live Nation merged to create the world’s largest live events company, Live Nation Entertainment, which manages artists and owns venues in addition to selling tickets. Live Nation Entertainment now owns several major secondary ticket marketplaces:
- Ticketmaster Resale (formerly GetMeIn and TicketsNow)
- Vivid Seats
- SeatGeek
This combination of primary and secondary ticket sales under one company worries regulators and consumer advocates. Ticketmaster also faces frequent criticism for its high fees which can add 25-30% to listed ticket prices.
What are verified resale tickets?
Verified resale tickets are tickets that have already been sold on the primary market and are now being resold by the initial ticket buyer through an approved resale platform owned by Ticketmaster. Ticketmaster verifies these are real tickets, unlike potentially fraudulent tickets sold on unauthorized resale sites. Fans can resell tickets they can no longer use through Ticketmaster’s fan-to-fan exchanges. Season ticket holders for sports teams and concert promoters also frequently resell large volumes of tickets through Ticketmaster’s resale services.
Key attributes of verified resale tickets:
- Priced dynamically based on demand, similarly to airline tickets.
- Prices can exceed initial face value, offering profit potential for resellers.
- Ticketmaster collects a percentage fee on the resale price.
- Tickets can still be valid for fan benefits like seat upgrades.
- Tickets are verified as authentic and valid.
- Purchases are covered by Ticketmaster’s guarantees.
Why does Ticketmaster allow and facilitate verified resale tickets?
There are several financial and strategic incentives that motivate Ticketmaster to operate its own secondary resale exchanges alongside its primary sales:
1. Captures additional revenue streams
Ticketmaster is able to generate additional revenue by collecting a percentage fee on every ticket resold through its exchanges. These can be substantial funds given how prices are often marked up over the initial face value. Ticketmaster can earn revenues twice from the same ticket if it collects both the initial sale fee and the resale fee.
2. Offsets revenue lost to scalpers on other sites
There is huge demand for popular event tickets on the secondary market. If Ticketmaster did not enable any resale activity, third-party resellers would likely acquire inventory and resell it on competitor exchanges where Ticketmaster loses the associated fees. Facilitating internal resales allows Ticketmaster to recapture a portion of the secondary market activity.
3. Data on customer demand and price sensitivity
The dynamic pricing model on verified resales provides Ticketmaster with valuable data on how much customers are willing to pay for tickets to different events. This data can inform optimal pricing strategies for initial ticket releases. It also enables upselling customers to more expensive ticket tiers.
4. Benefits Ticketmaster’s venue and promoter partners
Venues and event promoters want to capture as much revenue as possible for their in-demand events. Secondary sales can effectively act as a price hike for the most popular tickets. The resale fees are often shared with partners. Guaranteeing valid tickets also helps combat external scalpers undermining the event’s reputation.
5. Brings customers into Ticketmaster’s ecosystem
The verified resale ticketing keeps secondary market activity within Ticketmaster platforms. This exposes more customers to their range of services and fees, potentially increasing sales of other higher margin offerings like ticket insurance. It also discourages customers from supporting competing exchanges.
Criticisms of Ticketmaster verified resales
Allowing ticket brokers and scalpers to resell large volumes of tickets through its own platforms has exposed Ticketmaster to criticisms including:
Facilitating scalping activity
Many see Ticketmaster as enabling scalpers by letting them buy up tickets only to immediately flip them for a profit. The verification of tickets makes it easy for scalpers. Dynamic pricing fuels price inflation. Critics argue Ticketmaster is scalping fans itself through its fees.
Incentivizes reducing initial ticket availability
If tickets are withheld from general initial sales, it increases scarcity and drives up resale prices and Ticketmaster’s fees. Some allege Ticketmaster allocates too few tickets to general public sales.
Hurts access for fans
Fans are frustrated by seeing tickets instantly sell out, then reappear at higher prices minutes later. Verified resales arguably squeeze regular fans out of the market for the best tickets by pricing out all but wealthy die-hard fans.
Lack of transparency around allocation and pricing
The inner workings of Ticketmaster’s inventory controls and pricing strategies for initial ticket releases versus resales are proprietary and opaque to outsiders. This causes suspicions of manipulation.
Conflicts of interest
Ticketmaster wears two hats – getting the best deal for fans on initial purchases and enabling higher re-sales. Critics assert verified resales only exist to benefit Ticketmaster, not consumers.
Recent controversies and responses
Ticketmaster allowing verified resales has periodically sparked outrage and remedial actions:
Bruce Springsteen resale prices capped (2021)
After seeing resale tickets listed for nearly $5,000, far above initial $200 to $400 prices, Bruce Springsteen’s manager John Landau got Ticketmaster to agree to cap resale prices for Springsteen’s 2023 tour at $999 for floor seats and $399 for standard seats. Other artists have pressured Ticketmaster similarly.
Swifties outrage over Eras Tour resale prices (2022)
Taylor Swift fans erupted in anger seeing verified resale prices for her Eras stadium tour listed as high as $22,500 on Ticketmaster. Swift had criticized scalpers earlier in her career. Ticketmaster insisted “89% of tickets…were sold for set prices”
DOJ investigates Live Nation Entertainment (2022)
The US Department of Justice opened an antitrust investigation into Live Nation Entertainment’s practices in the ticketing industry following concerns over unfair competition. Scrutiny increased after the botched sale of Taylor Swift tickets in November 2022.
US Senators pressure Ticketmaster (2022)
US Senators Richard Blumenthal and Marsha Blackburn threatened regulatory action against Ticketmaster if it did not adequately explain its verified resale policies. They criticized the lack of transparency.
Ticketmaster responds
Ticketmaster claims resale sites are a small percentage of its business. It argues the fees captured are justified given the costs of facilitating millions of secure transactions. Ticketmaster notes it has invested heavily in thwarting bots and scalpers. The company blames incredible demand outpacing limited venue capacity for shortages.
The future of Ticketmaster verified resales
Despite the backlash, Ticketmaster currently has little incentive to restrict verified resales as they generate substantial revenues. However, a few factors could change the calculus:
– Regulatory action like capping resale prices or fees
– Continued pressure from high-profile artists
– Emergence of rival ticketing platforms without resale sites
– Overall decline in live events reducing resale demand
Many expect the controversy to continue given Ticketmaster’s entrenched market power in primary sales. Scrutiny of verified resales seems unlikely to abate. But the company has weathered past criticism. Major reforms would likely require regulatory intervention rather than voluntary action. Fans desire more affordable access to live events. But Ticketmaster appears poised to keep utilizing verified resales to maximize revenues absent meaningful external pressure.
Conclusion
In summary, Ticketmaster facilitates verified ticket resales through its secondary marketplaces to generate additional revenues, offset scalpers reselling through competitors, gain customer data, and satisfy partners – despite criticism for enabling inflated prices that hurt fans. Ticketmaster currently retains significant market leverage with limited incentive to restrict profitable resale activity without regulation or artist revolts. The company maintains it expands options by providing a safe resale exchange. But many question whether verified resales ultimately serve fans or just Ticketmaster’s bottom line. The tensions seem unlikely to disappear given the money at stake.