Things We All Hate is the newsletter from OZY that explores how our shared dislikes can help bring us together in hard times.
May 24, 2022
Things We All Hate
The world is slowly re-opening and live events are returning. You’ve waited weeks, months, maybe even years now for your favorite performer to go on tour. Finally, the tickets go on sale and you pounce. And you know what comes next: If you’re one of the lucky few who snagged tickets, then you’ll soon see the price has ballooned so far above face value — thanks to service charges and processing fees — that you hardly recognize it. And if, like most ticket buyers, you weren’t fast enough, then you’ll head to a ticket resale website only to discover the tickets are now selling at double or triple the original price. And how do you even know for sure that you are buying actual tickets and not getting scammed?
In this week’s Things We All Love to Hate, we’ll corner the market on live events and grab a front row seat to see the scalpers, resellers and ticket-selling companies profit off a murky ticket-pricing and purchasing process.
Why is buying tickets
such an expensive hassle?
Pent-up demand
An imbalance in supply and demand in the ticket market always creates an opportunity for ticket scalpers, and the demand for live experiences coming out of the pandemic is skyrocketing. Live Nation, the world’s largest concert promoter, says 2022 will be its biggest year on record. Venues are booked out and there has never been a better time to charge more (or mark up) tickets.
Fees and add-ons
It’s the fees, silly! According to a recent study, the average ticket fee is now 27% of the ticket’s face value. Some service fees can get as high as 75-to-80% of face value. It’s no accident that Ticketmaster, the large online ticket seller, is widely considered one of the most hated companies in the world, despised by fans and performers alike. Nearly 7,000 Americans took the time to complain about Ticketmaster’s fees to the Federal Trade Commission (FTC) during an open-comment session in 2018.
Secondary markets, and markups
It usually doesn't get any cheaper on the secondary market, where professional ticket brokers and scalpers flip tickets for huge markups on sites like StubHub and SeatGeek. There is a perception, encouraged by the sites, that they are platforms for fan-to-fan sales, but one 2018 government report found that the “overwhelming majority” of ticket sales were conducted by professional ticket brokers, who often (with Ticketmaster’s blessing) use bots to buy up large groups of tickets during presale periods when they are not available to the general public.
How did it get so bad?
‘Sidewalk men’
Ticket scalpers date back to the early 19th century, when they were sometimes known as “sidewalk men” for standing on sidewalks outside theaters and concerts, seeking to sell marked-up tickets to last-minute attendees. In the 1860s, for example, one journalist reported that tickets to Charles Dickens’ second American tour with a face value of $5 were being scalped for as much as $50 (more than $1,700 in today’s money). And the internet has helped professional scalpers and brokers become omnipresent.
An innovative upstart…
Ticketmaster started in 1976 as a quest by two Arizona State University staffers seeking to improve sales for their university’s theater. Soon Ticketmaster had out-performed dominant players like Ticketron. The key to success was focusing on the venues themselves: Whereas other ticket sellers charged venues, Ticketmaster paid them. Ticketmaster, now merged with Live Nation, controls ticketing for 80 of the top 100 arenas in the U.S.
…Turned domain master
Due to its 2010 merger with Ticketmaster, Live Nation now controls over 80% of the ticket market, along with managing over 500 major artists and owning over 200 venues. In 2020, the Justice Department alleged that Live Nation was forcing venues to use its Ticketmaster services and retaliating against those that did not.
Fun and frustrating facts
Hard times
The mass cancellation of live events during the pandemic in 2020 hit the concert and event industry hard, causing an estimated 60% decline in revenue — the largest ever single-year revenue contraction.
Rising prices
Overall, the average price for a popular live event has more than tripled since 1995 (now $80 per show, up from $26). Fan spending on food, drinks, merchandise and parking is also up more than 10 percent at Live Nation events since 2019. The popular band BTS, for example, now charges $85 for a hoodie.
Winning and losing acts
BTS and other big acts like Bad Bunny are the biggest beneficiaries of the current concert crush. BTS recently sold more than $33 million in tickets for four shows in Los Angeles, while Bad Bunny brought in more than $3 million per night during his recent tour. Meanwhile, many smaller acts have struggled to find venues due to the sheer number of groups touring and booking all the sites.
Could buying tickets suck less?
Opting out
Those with the leverage to change the system are the big-name performers, who could play at alternative venues or curtail the secondary market by making their tickets non-transferable. Such efforts, though, have gone badly in the past. In 1995, Pearl Jam — then arguably the biggest band in the world — decided to play at smaller venues and even canceled its summer tour in order to bypass Ticketmaster and its high fees. But the band eventually had to bow to the ticket giant in order to play major arenas and stadiums.
Alternative plays
A crop of new discount ticket apps have emerged. Goldstar, for example, sells tickets to plays, stand-up comedy, concerts and sporting events at an average of 50% lower than face value, provided you are okay with some slightly offbeat experiences. Similarly, Gametime provides a mobile ticketing marketplace that allows users to buy and sell discounted tickets after an event has started.
Tech fixes
Major ticketing platforms are already using blockchain technology to deliver digital tickets, updates and special offers to event-goers. Blockchain can also help combat resale fraud and cut out unwanted middlemen or resellers because every ticket is verifiable and the original seller can set constraints on reselling.
WATCH ADENA FRIEDMAN
on The Carlos Watson Show, season 4!
This will make you feel better…
Airport ticket scalper
Think Ticketmaster could never bring you even two minutes of delight? Think again. The company’s 2014 promotional prank — showing a scalper trying to sell airline tickets — is genuinely entertaining. Plus, there’s no processing fee to watch!
