(Still) Looking for a miracle.
November 24, 2013 11:09 AM   Subscribe

Ticket Wars: Why the Ticket Industry Is So Hated and How That's All About to Change "A couple of economists at Northwestern University have developed a scheme to change everything. It's surprisingly simple, and, if it spreads throughout the industry, it could control the very thing that makes the industry so frustrating. Ticket prices will finally make sense."

(If it's not obvious at first, you can scroll through the article slideshow-style at the top of the page.)
posted by Room 641-A (42 comments total) 13 users marked this as a favorite
 
NPR's Planet Money did an interesting little piece on how Kid Rock was trying some new techniques to fight back against scalping while keeping his fans happy. Like him or not, the dude has done some smart things.

And boo on that FastCompany graphic. Is this some coded way of saying "go get the printed magazine, you cheapskate"?
posted by JoeZydeco at 11:30 AM on November 24, 2013 [1 favorite]


It's a coded way of saying "we still think it's 1997 and that our website is just a tool to reprint the only thing that actually matters, the print magazine!"
posted by chrominance at 11:33 AM on November 24, 2013 [10 favorites]


I was recently gifted a pair of tickets for a hockey game, since I hadn't gone to a game for 10+ years. The seats are 2/3 of the way up, in the middle of a section, at about the blue line.

Each ticket was 125$.

You [they] can't explain that to the point that I'll be going to another game this decade.
posted by LD Feral at 11:34 AM on November 24, 2013 [7 favorites]


Ticket companies are not hated because the prices don't make sense. They are hated because they are high. And by now they are pretty much hated by reflex.
posted by benito.strauss at 11:34 AM on November 24, 2013 [11 favorites]


The Power of Purple Pricing, Sandeep Baliga and Jeff Ely in the Harvard Business Review

What Is Purple Pricing? -- Northwestern Basketball explains

No, Fast Company, I refuse to click on your ugly little pictures.
posted by BitterOldPunk at 11:36 AM on November 24, 2013 [7 favorites]


Northwestern uses "Purple Pricing" for their big draw games, typically when Michigan and Ohio State come to town in football, and a few popular teams in basketball. The best seat price for Michigan football tickets was $145 when both teams were undefeated early in the year, as they both kept losing it kept dropping. I think it ended at $105 or so. How it works in text form for those that hate cartoons or odd user interfaces.

One interesting side effect was that it correctly priced different tiers of seating - the spread between the final prices for the three different ticket classes was much less than it was at the start, showing that people valued the difference between seats less than Northwestern had thought initially.

Using it for events that sell out quickly would require very high initial prices - if something is going to sell out in 5 minutes at $100 per ticket you'd probably end up with an initial price of something north of $1000.
posted by true at 11:36 AM on November 24, 2013


benito.strauss: "Ticket companies are not hated because the prices don't make sense. They are hated because they are high. And by now they are pretty much hated by reflex."

Actually, I think a good chunk of it the fear that someone else got a better deal than you. The continuous dutch auction model means everyone pays the same price. On the downside, it also points out how much more you could have made if you could charge everyone what they asked for. Which is essentially what ticketmaster and venues are trying to accomplish.
posted by pwnguin at 11:57 AM on November 24, 2013


Ticket prices are crazy and obtuse because there are so many interested parties taking cuts of the total price, and those cuts and who they have to split them with are enshrined in the contracting process (between promoter, venue, talent, and ticketer (if different than venue)). And each of those interested parties ALSO has an interest in concealing the size and nature of their cuts/fees from every other interested party, including those whom they are ostensibly representing.

As someone who works in venue management and ticketing, I have long assumed that better information management and technology would eliminate this bugfuck, deceitful method of putting tickets on sale and then selling them. But old habits (read: easily concealable profit-streams) die exceedingly hard. Things like purple pricing are workable if the venue, ticketer, and promoter are the same entity, and maybe ONLY workable in that scenario. So yeah, great for huge venues and complexes, sports teams, and companies like Live Nation and Ticketmaster. Still fucked for everybody else.
posted by penduluum at 12:17 PM on November 24, 2013 [9 favorites]


I don't know if they still do it, but for the longest time TM charged a "convenience fee" for downloading a PDF of your tickets and using your own paper and ink to print them out at home. Their fees can be as much as 40% of the ticket's face value, when they're nothing but a middleman. Other services are finally starting to crop up that charge a fixed $2.50 fee for tickets, and that's fine with me. Let TicketMaster burn up and blow away.
posted by 1adam12 at 12:18 PM on November 24, 2013 [8 favorites]


Ticketmaster still charges the convenience fee for printing your own tickets. Surprisingly it's cheaper to have them mail you the tickets (or was a few months ago).
posted by justkevin at 12:37 PM on November 24, 2013


Yes, TicketMaster still charge that fee. TicketFly charge between $4-8 "Service Fee" per ticket, and sometimes additional Facility Fees and Charity (?) Fees. My recent purchase of NMH tickets had a 30% fee markup on a nominal $35 ticket price. Oh Canada!

This Purple Pricing thing — like marijuana legalisation — seems only to benefit the one group of people who don't have a vested interest in the status quo. I expect similarly great things of it over the next half-century.
posted by scruss at 12:37 PM on November 24, 2013


In some cases a venue or promoter (or both) can negotiate to take a slice of print-at-home convenience fees, but if Ticketmaster is doing printing, fulfillment and mailing they're taking all the fees and possibly even passing additional fees along to the venue. Thus it ends up often costing you more to print your own tickets. This is the kind of ridiculous crap I'm talking about.
posted by penduluum at 12:44 PM on November 24, 2013


And of course Louis CK kicked TM to the curb - wouldn't work for everybody (and any after-action reports out there?) but a flat $45 vs "How much ya got?" sure appeals to me.
posted by jack_babylon at 12:46 PM on November 24, 2013 [2 favorites]


"Ticket companies are not hated because the prices don't make sense. They are hated because they are high. And by now they are pretty much hated by reflex."

Related closely to to this is that most people suspect that they are being charged for things that probably wouldn't be the case if the market was more open and there was more legitimate competition, due to Ticketmaster participating in anti-competitive practices over the years. So not only are the costs high and don't always make sense, but they come drenched in a ton of ill will and suspicion that they are charging for some things simply because Tickemaster can get away with it. At this point, attempting to pass unexpected charges off at the end of the transaction as legitimate also feels bait-and-switch, and somewhat insulting that you weren't supposed to notice.
posted by SpacemanStix at 12:49 PM on November 24, 2013 [3 favorites]


Yes, TicketMaster still charge that fee. TicketFly charge between $4-8 "Service Fee" per ticket, and sometimes additional Facility Fees and Charity (?) Fees. My recent purchase of NMH tickets had a 30% fee markup on a nominal $35 ticket price. Oh Canada!

Ah, good old think of a number pricing: decouple every piddling little cost you can from the nominal price of an item, then jack them up and add them once the sucker consumer has made their choice. A beloved tactic of airlines, once state owned utilities and the US medical industry; no surprise to see it popping up here as well.
posted by MartinWisse at 12:57 PM on November 24, 2013 [3 favorites]


Ticket prices are crazy and obtuse because there are so many interested parties taking cuts of the total price, and those cuts and who they have to split them with are enshrined in the contracting process (between promoter, venue, talent, and ticketer (if different than venue)). And each of those interested parties ALSO has an interest in concealing the size and nature of their cuts/fees from every other interested party, including those whom they are ostensibly representing.

This bears repeating. I used to work in ticketing: often, half or more of the convenience/service fee is contractually negotiated to go back to the venue. Charity, facility or other free are also almost always requested by the venue.

Also, calling a ticketing company merely a middleman is incorrect. The technical infrastructure required to sell tickets online is significant and something venues have no interest in tackling.
posted by wemayfreeze at 1:30 PM on November 24, 2013 [4 favorites]


The problem of ticketing today is mostly one of optics. Why say a ticket costs $30 when the final cost to the consumer is $40? Virtually all other industries hide the sausage-making under one price.
posted by wemayfreeze at 1:36 PM on November 24, 2013 [2 favorites]


Louis CK ... well, it's kind of like the thing with Radiohead being able to do pay-what-you-want for an album, but smaller artists not being able to. Louis could demand a $45 flat price and do great, because everybody was going to go see him no matter what. His promoter ended up making less money, and his venues ended up making significantly less money, but they didn't care because he was a big enough draw that it was worth it.

Here's a breakdown of how a ticket might look.

A $45 ticket with, let's say, a $6 "convenience" fee:

Base price: probably about $36. Talent keeps 100% of this at first, and has to split it out among all the bills they have to pay (crew, assistants, management, promoter, their own internal marketing, the opener / other band members, the rental costs and expenses of the venue, etc. How much they clear in profit varies, but it's not a ton)
Internal service fee: $3 (the venue nominally keeps this, but they often have to split it with the promoter and the ticketer, if the ticketer isn't part of the venue).
External service fee: $4 (this is the one that you see when a $45 ticket gets called $41 plus fees. This is the service fee that gets passed to the customer, and is usually set and retained by the ticketer.)
Maintenance or venue fee: $2 (retained by venue; pays for maintenance, admin and staffing costs, etc.)
Convenience or ticketing fee: goes to whoever is doing ticket fulfillment, and is set by whoever is doing ticket fulfillment. If this is Ticketmaster, by the way, they make up this number without ever communicating it to management, promotion or venue. So they still get their cut of the other numbers but they keep whatever they want to of this. Often the venue will negotiate a cut of it based on fulfillment process.

Things like meet & greet tickets, VIP bonuses, etc., usually go straight back to the talent.

So you see where loopholes exist. For example: promoter gets the artist booked, and is paid out of the artist's cut and part of the service fee, maybe. So it's actually in the promoter's interest to reduce the artist's cut and increase the service fee, so he puts more money in his personal pocket. But because he's nominally negotiating on behalf of the artist, he can't let them ever see the actual fee structure. Promotion also probably put up the money up front to get all the show set up, so they have a lot of places they can hide profits by Management has incentive to book not the best possible venues, but the venues which pay the best for them. And everybody has incentive to create as many small fees and they can and negotiate to keep as much of them as they can.
posted by penduluum at 2:00 PM on November 24, 2013 [7 favorites]


"they can hide profits by" should have been "they can hide profits by concealing them within expenses with kick-backs".
posted by penduluum at 2:24 PM on November 24, 2013


Virtually all other industries hide the sausage-making under one price.

There are lots of industries that compete on a price you can't really get, or which doesn't include what you thought you'd get when you started to buy it. Rental cars, home loans, cable, savings accounts, movie tickets. I don't really draw a difference between this and upselling a useless warrantee, or gouging on printer ink, or the scripted haggling of hotel clerks, or grocery stores advertising club prices. There are tons of industries who are not actually living off advertised price.

They all will burn.
posted by bleep-blop at 2:33 PM on November 24, 2013 [6 favorites]


Also, calling a ticketing company merely a middleman is incorrect. The technical infrastructure required to sell tickets online is significant and something venues have no interest in tackling.

While that is a fair statement, it's the amount of the fees that makes them not much more than a middleman. For example, an upper deck ticket to see the Cardinals against the Rams is $44.85. $8.85 is the service fee on that. So if you go with a friend to the game, you're paying an extra $17 just for the privilege of buying the tickets online. That's pretty ridiculous. If it were $2-$3 a ticket it would be much more justifiable.
posted by azpenguin at 3:10 PM on November 24, 2013 [1 favorite]


...people suspect that they are being charged for things that probably wouldn't be the case if the market was more open and there was more legitimate competition, due to Ticketmaster participating in anti-competitive practices over the years.

I don't suspect it. I know it, because I bought tickets to concerts and sports events before Ticketmaster existed, and here's how it worked: When you bought a concert ticket that said $50 on it, you paid $50, no matter where you bought it (unless you got it from a scalper). Same for sports tickets. No fees for the business you bought it from; their profit derived from their buying the ticket for less than face value. If TM pays face value, I'll eat my hat.
posted by Kirth Gerson at 3:13 PM on November 24, 2013 [4 favorites]


Kirth, the entire ticketing model has changed since those days. Ticketmaster doesn't buy tickets at all — they are the sole ticket seller for all ticket stock for an event but they never own the tickets. They collect the entire payment — face + fees — and pay face + whatever percentage of the fees required by contract back to the venue.
posted by wemayfreeze at 3:37 PM on November 24, 2013 [2 favorites]


I solve this problem by just never going to anything that requires tickets anymore, unless someone else is buying.
posted by Steely-eyed Missile Man at 4:02 PM on November 24, 2013 [7 favorites]


The prices of tickets are pretty damn reasonable as far as I can see - modulo the fact that Ticketmaster is something of a rip-off - but that would easily have been fixed if the Feds would enforce the anti-monopoly laws.

The real issue is that the anti-scalping laws are local in nature, so large companies like StubHub, which are basically professional ticket scalpers, snap up ALL the tickets for hard-to-get shows.

I applaud systems like the one above. I tried to push such an idea (probably not as good, I like the reverse Dutch auction idea a lot!) when I was at Google but it didn't fly at all - quite reasonably, they felt there was too much "hair" (too many local details)....
posted by lupus_yonderboy at 4:10 PM on November 24, 2013


Why is it that most articles about "how that's about to change" turn out to be describing a fantasy that will never get implemented in any lasting way?
posted by rr at 5:36 PM on November 24, 2013 [3 favorites]


There's other ways to do an app auction. For example: Bidders can offer what they will commit to pay for a ticket, and the bidding stops when it sells out. Bidders agree to the average bid price. Low bidders can back out at that point for the cost of a nominal bidding fee, and extra tickets are offered at the average bid price. The point is to sell out instantly at the peak of promotion. If goals are not met, the auction can cancel itself with no refunds.
posted by Brian B. at 8:17 PM on November 24, 2013


During their last tour, The Pixies manager Richard Jones strong armed Ticketmaster into only selling tickets at "sticker price". That means they were a higher price, but what you saw is what you paid.

The company I work at is doing all the presale ticket stuff for Arcade Fire's 2014 tour, along with all the shows they just had in LA, Brooklyn, and Miami during the album release. I believe all those shows were also "what you see is what you pay".

The LA Halloween show didn't even have paper tickets. You had to swipe your credit card and show an ID to get in, so no chance for scalpers.

So, maybe the fairy dreamland in this article isn't about to happen (especially with the promoter, venue owner, and ticket seller being the same company in Ticketmaster/Livenation), but things are changing for the better.
posted by sideshow at 9:35 PM on November 24, 2013


Ticket brokers are not essentially professional scalpers; they are professional scalpers.

Part of my concierge job involved buying show and event tickets for clients, often being the guy who'd grab a phone and wardial Ticketmaster at 10:00 am sharp while refreshing the Ticketmaster website to try and get one pair of tickets to Paul McCartney as soon as they went on sale. It didn't really matter what you did because somewhere else, too many brokers were buying 'em in bulk.

So you went through the brokers. We had enough good relations with brokers that we gained access to a network. We had software that displayed ticket availability, up front and in real time with market prices, for any event from any number of participating brokers. (Don't bother assuming the markup is going to be astronomical. It's best not to think about the markup at all if you want to keep your blood pressure down.)

The software was easy to use if a bit daunting when displayed all at once, but the fact of the matter is that it exists and it is immensely helpful and it was done entirely by resellers who are essentially a fourth party at this point. My acting as concierge go-between only added yet another layer to the ticket purchasing process at the consumer level. There is no need for so many layers. It does not need to be so damn expensive. I applaud anyone who tries to introduce a different business model.

and fuck the "convenience fee"
posted by Spatch at 11:29 PM on November 24, 2013 [5 favorites]


I guess this only applies to events which sell out. What happens if the event doesn't? Should you just keep dropping the price up to some minimum value and refund the difference to those that paid more?
posted by noshorning at 12:38 AM on November 25, 2013 [1 favorite]


In other news: Monty Python tickets
posted by DanCall at 3:39 AM on November 25, 2013


Kirth, the entire ticketing model has changed since those days.

Yeah, well, their favorite ticketing model sucks. I am on board with S-E Missile Man's method. If they want me to go back to buying event tickets, they're going to have to return it to a normal transaction, not some bizarre clusterfuck like what exists now or the thing in the comic strip.
posted by Kirth Gerson at 4:32 AM on November 25, 2013


There are many events in Europe but especially Germany that require you pay by bank transfer, totally eliminating the ticket site. For 30c3, you first commit to buying the ticket and receive a payment code, and then pay using a bank transfer mentioning the code, later that week you receive a printable ticket pdf file. Absolutely no middleman. Americans could easily do exactly the same with paypal, but paypal fees are higher than a bank transfer within Germany.
posted by jeffburdges at 5:44 AM on November 25, 2013


Can't be angry at brokers -- they simply make sure you pay the real market value for a ticket. The fact that many venues and performers are still too dumb to put in place systems to receive the market value is the brokers' joy, but not the brokers' fault.
posted by MattD at 6:30 AM on November 25, 2013


Can't be angry at brokers -- they simply make sure you pay the real market value for a ticket.

So your assumption is that everyone wants "floor seats" and is willing to pay a premium. Some perhaps but not to all. Obviously a dude sitting in the balcony has chosen a lower priced ticket than the hipster sitting in floor seats. Only some , perhaps few, people are actually willing to burn money and go to the highest price simply for the convenience. Others refuse to pay even face value if the price is perceived to be too high. E.G. $75.00 last row balcony for a single seat at a single regular season hockey game.
posted by Gungho at 8:23 AM on November 25, 2013 [1 favorite]


The fact that many venues and performers are still too dumb to put in place systems to receive the market value is the brokers' joy, but not the brokers' fault.

Many bands — and venues — really don't want to sell tickets at market value as this would price out way too many fans. Popular shows would become stocked only with the rich.
posted by wemayfreeze at 8:56 AM on November 25, 2013 [1 favorite]


Here in Philly our best music venue is owned by a local promoter that doesn't use ticketmaster. You can buy the tickets without the service fee at the local box office, or head down to a record store and pick them up.

Also, Neutral Milk Hotel is playing there, they sold out within minutes of course. Max two tickets per order, and will-call only. Can't scalp those bad boys! Seems like a solution to me.
posted by MisantropicPainforest at 8:56 AM on November 25, 2013 [1 favorite]


Seems like with the dutch auction you wouldn't even need ticket classes. If the person willing to pay the most chooses their seat first, and the remaining seat situation is visible to everyone, then essentially each seat in the venue is a separate ticket class.

The purple pledge breaks that, though. Having each customer pay the same price is good for interchangeable things, but venue seats aren't interchangeable. People choose seats for whatever reason and may not be happy with a different one. Starting with ticket classes generally groups seats into more desirable and less desirable groups arbitrarily.

Maybe go another step and let the buyers decide the ticket class boundaries in real time. Have a purple pledge cutoff at 10% tickets sold, and another at say, 50% sold. Anyone who buys after the cutoff only gets refunded to the price at cutoff time.

Of course, on the other hand, the goodwill generated by having the process sound simple is worth something, too.
posted by ctmf at 9:05 AM on November 25, 2013


("Anyone who buys after before the cutoff...")
posted by ctmf at 9:10 AM on November 25, 2013


The Dutch auction method described in the article is elegant and solves many problems. It does not solve one problem though: how to let the non-rich attend popular events.
posted by Triplanetary at 1:02 PM on November 25, 2013


I work for the 2nd to ticketmasters 1st in "ticketing software", that convience fee pays for the ability to buy a ticket online essentially. Also no one wants to eat the credit card processing fee so it's usually wrapped in that charge.

The software is fairly complex, TM has been doing this for over a quarter century now so thier stuff is fairly bulletproof. It solves a lot of problems concert promoters had in the 70's namely: guys with Uzis guarding the cash room on show night and everyone skimming off the top.

Sausage making is an apt descriptor term for ticketing.
posted by wcfields at 3:00 PM on November 25, 2013


I consider crowd funding sites the most interesting ticketing option actually. We'd an indiegogo campaign for the London decom's After Party this year : once the campaign passed the hurdle, they booked a venue from their short list, and got rolling.
posted by jeffburdges at 8:01 PM on November 25, 2013


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