Scalping tickets, as it has been called, is becoming a legitimate means of getting cheap tickets. (SARAH POTTHARST/The Daily Campus)
Correction: In the original article published below, TicketsNow is described as a non-member of NATB. TicketsNow is actually a founding member of the NATB. The Daily Campus apologizes for this error.
It was 2:30 Friday afternoon and I had an unexpected offer to attend Austin City Limits music festival. By 3 p.m., I had written 20 e-mails to Craigslisters who were selling tickets online. By 3:10, I had a promising response.
At 3:45, I was speeding to the Guitar Center parking lot on Central Expressway and Lovers Lane to make a deal. By 4 p.m., I had a ticket in my hot little hand and was on my way to Austin.
My impromptu ticket deal was a prime example of what economists call a “secondary market.”
A secondary market “takes a particular asset, real or financial, of an original purchaser and resells it,” according to SMU economics professor Bernard Weinstein.
The secondary market of ticket resale allowed Weinstein and his wife to snatch two tickets to “The Producers” Broadway show, just five minutes before the curtains opened, at a substantially reduced price.
Finding a last-minute ticket online is easy, which is a “tremendous benefit for consumers,” Weinstein said.
Web sites such as Craigslist, eBay, Ticketmaster and TicketsNow allow for online consumers to buy tickets with unprecedented expediency and often cheaper than the original sale price. But there are dangers in the online market.
Some local businesses, such as the nearly 30 year-old Texas Tickets, have been around long enough to see technology change the industry.
“In the old days, the tickets were 50 bucks, and then you’d go line up at the record store and they’d charge you $5 for selling you the ticket,” said Scott Baima, president of Texas Tickets.
Texas Tickets is now the largest independent, privately owned ticket brokerage company in the state and it’s a member of the National Association of Ticket Brokers, which promotes consumer protection.
“If you buy [the tickets] through eBay or Craigslist and the show cancels, you’ve got nothing,” Baima said.
Many online ticket-resale sites such as StubHub and TicketsNow are not members of the NATB, which leads to a serious dilemma for the online market: “Internet traffic is invisible,” says Nathan Binford, marketing director of the Granada Theater on Greenville Avenue.
This means that online ticket sellers who are fraudulent in their transactions cannot be held accountable because they are untraceable. This also applies to event cancellations.
The result of this intractability is that the buyer is not guaranteed to get his or her money back if a problem such as an event cancellation arises. Those who buy from members of NATB, on the other hand, are always guaranteed a reimbursement.
Web sites such as Craigslist contribute to this “Internet invisibility” because they do not charge site users for postings. Any regular Joe can list a ticket for sale and take part in unfair transactions without being held accountable.
“You can say you’ve got front row seats to the Rolling Stones and there might not even be a show,” Baima said.
Despite the dangers associated with most online ticket transactions, the Internet is also home to the mega-power of second-hand ticketing: Ticketmaster.
Ticketmaster conducts the majority of online ticket resale transactions. After merging with Live Nation Worldwide, Inc.—the largest producer of live concerts in the world—Ticketmaster is now the largest ticket reseller.
Binford is upset with Ticketmaster and its affiliates because he says the company bought the rights to key words in Google searches, such as “ticket” as well as certain ticket-selling links on the Internet. This steers consumers away from buying tickets at the Granada concert venue’s Web site.
Another aspect a customer might notice is the extra fee added to the total cost of their tickets.
The reason for the “hefty fees” in the economic structure of Ticketmaster and similar Web sites may be less complicated than it seems. The companies tack on additional charges to the actual ticket fee, making the total cost greater for the consumer rather than if they had simply bought tickets from the venue.
“They’ll tack on a $10 service charge, a transaction fee of $2. You want to print them yourself? That’ll be $3 more,” Baima said, who explained Ticketmaster’s transaction process with made-up numbers as examples.
Weinstein believes these fees are a necessary income for the company. The ‘services’ mentioned on the checkout page of resale Web sites, such as Ticketmaster and StubHub, pay for the company’s computer system, feed paper, electricity, software, etc.
SMU senior business major Jack Chapman interns for the House of Blues concert venue, which resides under the Live Nation umbrella. Chapman offers another reason why these fees might be crucial to the income of Live Nation’s Ticketmaster Web site.
An artist performing at the House of Blues receives 104 percent of the base ticket price for his/her performance. This leaves the House of Blues with a 4 percent deficit.
One way in which concert venues can counteract this deficit has nothing to do with ticket selling – it has to do with alcohol consumption.
“Places like the Granada and the House of Blues are basically glorified bars. They make money off bar sales and concessions,” Chapman said.
Some online ticket buyers, such as senior philosophy major Channing Morris, are not pleased with the additional fees imposed by these Web sites.
“I think it’s unfair that I have to pay more on Ticketmaster, but I’m also never worried about my bank account being tampered with like I am on other Web sites,” Morris said.
Chapman has had the luxury of seeing the business from the seller’s point of view. This has allowed him to be more accepting of the online ticket selling process.
“Now that I’m seeing the operation side with the promoter, I can see that if they didn’t have these fees, they would barely make any money,” Chapman said.
Ultimately, it comes down to basic economics.
“As long as there’s a willingness to buy,” Weinstein said, “why is it unreasonable?”
