When did ticket scalping become perfectly fine?
When I was young, ticket scalping was against the law, at least that was my distinct impression and my distinct memory.
It also wasn’t so easy to do. Tickets had to be bought either at the box office or with a transaction through the mail. It was harder to do it in bulk. And in order to scalp them, since the internet didn’t exist, people ordinarily had to stand around in the theater district—preferably near the theater in question—and ask passers-by if they wanted to buy a ticket to a popular show. It exposed the scalper to being arrested, because the person and the transaction were visible and sometimes even obvious.
At least, that’s the way I remember it.
Now scalping is big business. Big big business online. People apparently manage to buy blocks of tickets (even though there are some safeguards in place online to supposedly prevent this) and then they sell them for huge bucks to desperate theatergoers, mostly tourists I’d imagine. The old scalpers used to buy the tickets for around eight dollars and mark them up somewhat, but since Broadway tickets now cost hundreds of dollars even at the outset, the scalpers can make a much tidier profit. For a really big show, the tickets can go for many thousands of dollars.
And this all seems to be on the up and up—or at least winked at—with companies like Ticketmaster being the middleman.
When did this become perfectly okay? I missed the transition. According to current law, it’s not legal to sell tickets (in New York, for example) “for more than $5 or 10% (whichever is greater) over the face price of the ticket.” Don’t make me laugh; the markups are enormous these days, and no one even can tell the face price of the original tickets.
One of my brother’s co-workers drives up to several hundred miles, rents vehicles to do this, stays in motels to scalp college football tickets, and brags about the money he makes on a weekend. I haven’t found out weather the tickets are ligit or counterfeit, I wouldn’t put it past this fellow.
If a boycott of scalpers could be organized (truly impossible) for a couple of weeks, the sellers would be stuck with tickets, which have no shelf life, and less value and lose their investment.
Scalping tickets may be a true dilemma, a problem with no solution, at least a workable, practical one.
Mr. Market at work. You can always get a ticket if you will pay the price that is being asked. Right now the market for Nebraska tickets is headed down. Last year people couldn’t give away free tickets.
AS Cornhead notes, as long as there’s a market . . . .
Neo, you’ve included a key description: “desperate theatergoers.” I’ve referenced Robert Hughes’ series The Shock of the New before and his comment about seeing Michelangelo’s David: It’s more important to have seen the David that to see it. I can add to that the purported admission of a Mercedes-Benz CEO that we don’t sell cars, we sell status!
Likewise, this is one fuel that propels people and allows for such black markets. No one should every be a desperate theatergoer; if one doesn’t see Hamilton or Cats or any other theater production, they will live. No one needs the lastest iPhone or tech contrivance; they simply want it oftentimes motivated even subconsciously by the status it conveys.
Fools and their money, as they say.
When did ticket scalping become perfectly fine?
Perhaps when people realized that concerts and theatre performances were discretionary expenditures and the transaction between scalper and purchaser was voluntary. What happens to uninsured people who require a trip to the emergency room is 100x as egregious as what’s done by ticket scalpers. (No, I’ve never scalped myself).
A different question is why ticket vendors are allowing these off-the-books retailers to grab so much consumer surplus. There wouldn’t be many scalpers if the tickets were optimally priced from the vendor’s point of view (assuming conventional vendor behavior). I assume there have been academic studies which answer this question. You might consult EconLit to locate them. If you’ve a Friends of the Library membership at one of the research universities in Boston (or one of the teaching institutions, EconLit being a common subscription), it might include access to their databases.
Art Deco:
The original sellers are selling at a discount to middleman scalpers who then make an enormous profit. Many buyers are priced out of the market by the scalpers scooping up the available tickets at the outset. That’s the problem. Only the richest buyers can buy in the inflated market. The scalpers are the ones who profit.
I agree that it’s the original ticket sellers who should have an interest in stopping it.
Scalpers actually perform a useful function in that they efficiently clear the market for tickets. The examples in Neo’s post and in the comments are all of scalpers who make large profits on a transaction. This isn’t always the case: in many cases, scalpers buy blocks of tickets in advance that turn out to be unsalable at the prices they originally paid. (Not all scalped Broadway tickets are for Hamilton in the middle of a boffo run of performances.) It’s true that producers don’t capture the entire consumer surplus when they sell to scalpers at the list ticket price, but in return they are assured that they sell all their tickets….and don’t have to figure out the ins and outs of what might be a fast changing market demand or risk unsold tickets. This last point was much more salient before computers and online transacting made it easier to predict and respond to demand by the original ticket sellers. Interesting enough, more and more ticket sellers – especially sports teams – are using some sort of “Demand” pricing so that prices reflect market conditions more accurately.
There is a pretty large body of literature on this….it’s something economists really like to talk about.
Mineral:
Yes, it seems that, more and more, the original sellers are using some sort of pricing where the prices rise as the tickets get scarcer (that’s in the article I linked), a sort of “premium” ticket class when the press gets more intense. It’s something like what happens with airplane seats, as time goes on and it gets closer to departure, and the available seats on a given flight become more scarce and more expensive.
Yep, baseball teams and some college football/basketball teams are doing the tiered pricing thing. Why charge the same for tickets to the Chicago White Sox as for the Yankees when the demand is much higher for the Yankees.
The major downside when these groups buy huge blocks of tickets for resale is that they become the de facto official seller if you want really good seats. The individual has no chance to beat them on the original market.
I am a pure libertarian / capitalist on this topic. If you don’t like the price, don’t pay it. It’s all entertainment after all, not life essentials. The venue operators and ticket originators could reduce or eliminate the scalping by raising their prices to match what people will pay on the street to a scalper. Any votes for that approach?
My wife and I go to a couple of Red Sox games every year. It’s inconvenient to plan ahead, so we decide to go at the last minute when we are available and scalp tickets. Certainly we pay more than if we bought them through the team, but we get the benefit of going when and as we want and the weather is favorable. I also like the negotiation with the seller.
Above @ 3:38 pm I noted: “No one needs the latest iPhone or tech contrivance; they simply want it oftentimes motivated even subconsciously by the status it conveys.:
I just read the folloiwng article noting Gucci’s new one-piece swim suit; $380; should not come in cotnact with chlorine; sold out. Go figure.
The link:
http://www.foxnews.com/lifestyle/2018/09/22/guccis-sold-out-380-swimsuit-cant-touch-chlorine.html
T:
For lounging by the pool.
Many buyers are priced out of the market by the scalpers scooping up the available tickets at the outset. That’s the problem.
If the ticket vendor sold them at the market-clearing price, buyers would also be priced out of the market. The curio here is that they’re not sold at the market-clearing price by the vendor.
There’s no end to the ways nice things are better than not-as-nice things. Theatre tickets are not a matter of social concern. Medical care, long-term care, schooling, and legal services are.
It’s something like what happens with airplane seats, as time goes on and it gets closer to departure, and the available seats on a given flight become more scarce and more expensive.
In that case, the service provider is trying to capture more consumer surplus by price discrimination. The people arriving at the end are business travelers whose ticket is purchased by the corporation or they are personal travelers under the most severe time constraints. That behavior by vendors makes ready sense. Ticketron’s behavior is undertaken for more esoteric reasons.
Art Deco:
I certainly wasn’t suggesting that theater tickets are some sort of necessity.
But lots of things are regulated that aren’t a matter of life or death or health, and there used to be laws against scalping (and still are, to a certain extent). Why? Here’s why:
It varies by State, and sometimes local municipality. It was illegal when I grew up in Chicago, but I always thought it was an absurd law. Why would there be a law restricting an owner from selling his property? The law was generally ignored, but police would occasionally bust the more overt scofflaws.
I think “Hamilton” was the first production to figure out that they could get most of the mark-up by jacking up the face value of the ticket. That started a trend and now most performances start with a ticket price close to what folks are willing to pay on the second hand market, or any market.
And Neo, I know you addressed the reasons for illegality in the above comment, but most of that is nonsense. You could say the same for most any product. How can we trust the second hand car market. There are lies and counterfeits galore. To me, it boils down to a basic, human right. If I own property I should be free to sell it.
Rufus T. Firefly:
No, it’s not nonsense. A lot of fraud exists, but there are laws to try to limit it.
And a car is a car, even a used car. An object. You can drive it before you buy it. You can take it to a mechanic.
Tickets are sold online. There’s apparently a lot of fraud. Why shouldn’t that be regulated?
I don’t think these laws are aimed at restricting an owner from selling his property. A person who bought a ticket and wants to resell that ticket isn’t the target of the laws. The target is automated systems run by businesses that buy up a huge proportion of the tickets for popular venues merely to resell them, despite the sellers’ wishes to limit them to bona fide human beings.
“Cars are cars”. They’ll like it when you walk up!
Yes, you can take them to a mechanic. But when you’re poor, that could mean if you look at five cars shelling out for inspections that cost more than the car.
The best bet, and I’ve been there a few times, is to buy off a friend. That is so they have some stake in their assurances.
“A person who bought a ticket and wants to resell that ticket isn’t the target of the laws”
The scalper bought the tickets — they’re their property. You’re asking for a restriction between producer and buyer. We call that retailing, where I come from.
Most sales are scalping, it’s just that we’re so used to it we don’t notice. When we buy from a shop we don’t pay cost plus distribution charges, we pay what the retailer thinks they can get away with.
If the actual manufacturer sold iPhones direct, they’d cost way less. When the price of avocados sky rockets due to decreased supply, I don’t get on my high horse — even though the retailer likely bought them at a fixed price agreed before the season started. The retailer takes the loss when there’s oversupply and I can buy three for a dollar (which is when I do buy them).
It’s free markets in action. They don’t have scalping in non-free markets, but they have other more serious issues.
Complaints about the poor being priced out are the bread and butter of requests for Socialism. That’s what drives the people who want to make the system “fair”.
Scalping complaints are so middle class. People that don’t like it when they feel the pinch of free markets, not just the poor.
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I think there are more pressing issues in front of us than scalping tickets.
Just sayin’.
But lots of things are regulated that aren’t a matter of life or death or health, and there used to be laws against scalping (and still are, to a certain extent). Why? Here’s why:
Fraud is already a crime. Prison, fines, and forfeiture are appropriate penalties for people who engage in fraud. You might institute a licensing requirement to assist the state in tracking people who sell tickets on the secondary market. There are trade-offs incorporated in doing that, however. (I believe the General Business Law in New York does require licensing of ticket vendors, with the register of franchises maintained by the Secretary of State. We could check). However, in efforts to combat fraud, there’s no need to regulate prices.
Youtube has this stylized depiction of Neo teaching her next-door neighbor how to score theatre tickets.
https://www.youtube.com/watch?v=65OMoWgfgNA