In some places, there are laws against ticket scalping. Obviously, it would be a bad thing if scalpers bought up a majority of the tickets, but what if they only bought, say, 10%? In that case, ticket scalpers could actually provide a valuable service by allowing people to get tickets on the day of the event without having to get reservations months in advance. And if they charged completely outrageous prices, then no one would buy their tickets anyway, so ticket scalpers are bound by the law of supply and demand like anyone else. Do you think ticket scalping is immoral? If so, why?
The law of supply & demand in this case is hampered by the fact that the supply is limited (the vendor can not increase the supply due to a sudden increase in demand). There are only X number of seats in a stadium. If 100 scalpers each purchase 1% of the total number of available tickets, they have essentially cornered the market. This is the immoral & probably illegal aspect. But there are (I think) either laws or policies enforcing ticket rationing, so cornering the market is rather difficult for a scapler unless they employ an army of buyers at area ticket windows.
I’ve bought from “ticket agencies” before, mainly because I couldn’t afford to spend all day waiting in line at the box office. The higher price I paid included a service charge that compensates them for their time & effort spent on ticket procurement. In other words, I’m paying (handsomely, usually) for somebody else to camp out in a ticket line all day long.
I don’t think I see anything immoral in this, if the scalper charges a price that is too high, then I would re-evaluate my desire to see that particular performance/event.
These days almost any tickets can be bought over the phone with a credit card. There is a limit to how many you can buy, but scalpers get around this by employing lots of people to use their own cards to buy tickets (they use high-speed auto dialers to get through the busy signals), for which they earn a certain amount of money. There was a story in one of the network newsmagazines a couple of years ago on how they worked.
IMO scalping is immoral. These “ticket brokers” serve no useful purpose; Attrayant makes the argument that he bought from them because he couldn’t spend all day in line, but because of the ticket the scalper got for you, someone else who was willing to wait on line missed out.
Someone did wait in line- the scalper. The person who lost out just wasn’t the early bird, IMO. And if the scalper made his purchase via telecharge (or whatever), anybody else could have done that, too. The last time I purchased tickets over the phone, I didn’t get a busy signal. I went into a queue where I was assured that I would be served in turn. If the telephone software isn’t biased, waiting in a queue is no different from standing in line.
With recent technology, being able to buy over the internet, etc. I agree than brokers probably don’t serve a useful purpose any more. They will probably lose their customer base & find it uneconomical to continue staying in business. That means the laws will end up catching the little guy, who bought a ticket or two and then forwhatever reason can’t use them. Of course he wants to resell them to the highest bidder- wouldn’t you?
Doesn’t a place like Ticketmaster technically scalp? They make money somehow. It’s not in the price of the tickets?
Ticketmaster makes its money by tacking on a huge “convenience charge” (often nearly as much as the cost of the ticket itself). This is especially irritating when tickets are ONLY available through Ticketmaster.
How big is this convenience charge? I remember it being about $2. Has it gone up lately?
If you are trying to buy tickets to certain shows (say, for a Rolling Stones show) that everyone wants to go to, or on the first day when for a season become available (the Jones Beach theater on Long Island does it this way - all tickets through the end of the season go on sale the same day) then chances are you will get a busy signal. Of course, you can sometimes get around this by calling offices out of the area.
Of course, there’s also the question of what constitutes “scalping.” If I bought a ticket for a Saturday night concernt, and suddenly found out that I couldn’t attend, would I be scalping if I tried to sell the ticket at the same price I paid for it? How about for an extra $5? $10? $20?
The most egregious examples of scalping occur when demand overwhelms supply at the set (below market) ticket price. I saw on the web the other day that anyone with $1,300 burning a hole in his pocket can see RUSH with a friend, front dead center without having to wait in line, know somebody in the business or just get lucky.
How else could you allocate the most desireable tickets? The promoter himself could price these tickets at, say, $300 apiece and bypass the middleman. I imagine the bands and the fans would oppose this.
You could somehow make it difficult to re-sell tickets: the ticketholder must show a photo i.d. and the credit card he purchased the tickets with. Then only the “lucky” would get front row seats.
The promoter could set aside the best seats for contest winners, his best friends, local politicians, the band’s family members, local celebrities, you name it.
No matter which allocation method is chosen, some corruption is most likely inevitable.
Remember that the ticket broker is not assured of making a profit. They buy tickets on the assumption that there will be demand for them. If there is no demand, the broker loses the time and money invested in getting the tickets in the first place.
Here in Dallas, ticket brokers are all over the place and quite legal. However, scalping is not legal. There were signs outside of Reunion Arena that declared scalping to be illegal. What I’m not sure of is how scalping is defined. It may be the act of selling tickets, or selling tickets for more than face value.
adam yax: I believe that, techniacally, it’s only scalping if it occurs on the premises of the event (standing out in front of the stadium selling tickets, etc.).
The disruption of scalpers is a natural consequence of trying to put the price of a limited resource significantly below its actual value. It is a case where irrational behavior allows people to incur wealth without providing a useful service. While it’s not exactly moral, it isn’t immoral either. Here’s how I see it: the band, wanting to foster good will, offers the tickets below market value. The difference between the price and market value is a “gift” that they are giving to their fans. The scalpers then take that gift for themselves. Suppose a band were to leave twenty dollar bills around with notes that said “We wish to show our appreciation to our fans by sharing the money we have made. Please do not take this unless you are one of our fans”. Would it be morally questionable to take one of the bills, even if you’re not a fan? Yes. But I wouldn’t be able to muster too much anger at those that took the money anyway.
It’s actually one of the biggest economic riddles: why, if most big shows more than sell out, don’t they keep raising the ticket prices until they JUST about sell out?
The only going explanation I’ve heard so far comes from Steven’s Landsberg’s “The Armchair Economist” and he heard the idea from Ken LcLaughlin. Basically, it’s this: teenage concergoers are the ones most likely to follow up a concert by buying records, tshirts, and other crazy stuff. So concert people want teenagers to come, not adults. And the best way to get teenagers is to have low ticket prices: ensuring that the kids will queue up. Some teenagers are willing to spend flagrantly, some aren’t, but in the end concert promoters make out better.
Now, I don’t know, and Landsberg doesn’t know, and McLaughlin doesn’t know, if that really explains it. But at least that gives some sense of the riddle.
Scalpers, as Attrayant noted, exist because the market ISN’T working right: people are willing to pay more to ensure that they’ll get good seats, but no one will let them. So they adopt strategies to ensure their entrance, and scalpers supply one of these strategies.
—Here’s how I see it: the band, wanting to foster good will, offers the tickets below market value. The difference between the price and market value is a “gift” that they are giving to their fans.—
The problem, though, is that regardless of the band’s intention, it isn’t much of a gift. Even without scalpers, all they are doing is exchanging one rationing system for another: highest bidder to first come first serve. But I don’t see a very good argument for why one rationing system is better than the other. In fact, first come first serve might even be WORSE. Having to endure long queues, give up work and school, might well be way more of an inefficient hardship on fans than higher prices.
The thing is, the same number of people get in no matter what, and presumably all are fans. All the band does by setting low prices and cracking down on scalpers is REDUCE the range of choices that a fan has for how they can choose to spend their resources competing to get in. Some gift!
Landsberg has suggested a neat possible alternative: last come, first served. That is, mandatory cutting in line. The most recent person to arrive gets to go first, while the ones that waited longer are pushed further back. If that sounds unfair (and hey, it might be in the end, but hear him out), you haven’t considered the effect this system would have on the length of queues. It would drastically shorten them, and people would waste far less time waiting around in line. As always, we’d acheive the same end: the same number of people would get in. There just wouldn’t be anymore waiting around for it. Neat hunh?
A good solution that is probably against every normal human instinct and would never work in practice. First come, first serve is pretty drilled into the human concept of fairness. But when you think about it, there’s nothing more fair about any particular person getting in over another person. Everyone wants in. It’s just that some would be willing to increase their chances by “purchasing” a better chance with their time in line. But that’s inefficient for society, and is totally “unfair” to those people who don’t have a lot of free time to waste in lines.
So, what da ya think?
They’re speculators and as such are assuming a degree of risk. What if no-one wants to re-purchase the tickets, or will only do so at a price that doesn’t fully compensate the scalper for his time and effort?
If they’re guaranteed a profit, it’s because, as others have pointed out, the limited supply of tickets is being offered by stadiums/bands at below-market prices. The real question is, why are concert tickets sold this way, leaving a lottery rather than price mechanism to allocate a scarce, desirable, non-essential commodity?
Put kindly, this is rather vulnerable to strategic behaviour. I could extract the rents by hanging around threatening to join the queue at very little cost.
Another alternative to the “teenagers buy more records” theory is the “stadium full of suits sucks” idea. My expected enjoyment (and therefore my willingness to pay) of a concert or sporting event depends partly on the demographic mix of the crowd: just as shopping depends partly on the items and partly on their presentation. In addition a demonstative crowd tends to improve the performance (and lower the reservation price) of the performers. At a sporting contest you can handle a certain percentage of “theatre-goers” as long as they are small relative to the number of fans. My guess is that ticket sellers try to take account of this and that the “bargain” that fans get when they buy tickets is in fact a competitive return which recognises their contribution to the show. 
—Put kindly, this is rather vulnerable to strategic behaviour. I could extract the rents by hanging around threatening to join the queue at very little cost.—
Yep. No system, ultimately, is going to ward off rent-seekers in this sort of environment. Of course your efforts would only shorten the queue further, and if it got short enough: you’d get sent in, game over. Fact is, you’d probably be no more threatening than anyone else is to anyone else wanting to get in.
So it’s a little more robust than you give it credit for. But certainly not perfect.
That’s almost exactly what U2 did for the “Elevation” tour. Tickets for most shows were $130, $85, and $45. As a result, a lot of the shows didn’t sell out.
Interestingly, though, they made the $45 seats some of the best in the house–standing room only on the arena floor, including 350 or so lucky souls who were essentially “inside” the heart-shaped stage. (That’s where I was.) I guess they figured that the people willing to pay $130 wouldn’t want to stand the whole time.
I think one reason ticket prices don’t rise higher than they have is that most bands want to protect their reputations. I remember when the Eagles toured again for the first time, and the cheapest tickets were twice what anyone else was charging. A lot of people lost a lot of respect for them. Unfortunately, they appeared to be on the leading edge of a trend. Still, I can’t say I regret a nickel of the $45 I paid for that U2 show, and I don’t think I would have been disappointed at $130.
Dr. J
Well I used to scalp tickets for 15 years or so.
Ticket scalping itself is not imoral. However what usually goes on in the bussiness that John Q. public doesn’t get to see is all the “payoffs” that go on behind the scenes. i.e. Paying the clerk at the ticket window to save all the good seats when they go on sale, or paying off security to let you be first in line. Things like this are common tricks in the trade. The sad thing about it is that the true die hard fans really never have a chance of getting the good seats; even if they camp in line all night. becuase the scalpers have such a dominate buying power.
For those interested in reading more about the last come first serve Apos talked about. Here is Landsburg´s article
http://slate.msn.com/?id=100332