Dispatches – The Great Ticket Scandal

The way concert tickets are sold nowadays does little but irritate everyone involved.

Twenty five years ago, I was occasionally pretty good at getting good tickets for gigs: front row for Def Leppard, Judas Priest and Anthrax shows at Hammersmith Odeon, and best of all Aerosmith supported by Guns n Roses at Hammersmith. I was very pleased with that one, until they cancelled the show of course – typical of my luck.

The way I got these tickets would be to travel on the tube to the box office before or after work having read about the gig in a magazine. Concerts would sell slower than they do nowadays as it took a while for word to get around. It was time-consuming, but at least the window to buy tickets was open for longer than three minutes. I bought a ticket for Queen’s concert at Wembley by sending a cheque in the post. Try doing that now – Ticketmaster probably could do with a laugh.

Last night’s Dispatches programme on Channel 4 showed how the majority of tickets on secondary ticket sites such as Seatwave and Viagogo are either:

A)      seats held back by the promoter to be deliberately sold above face value to maximise the promoter’s revenue from the gig, or

B)      sold by “power sellers” which is a euphemism for professional ticket touts. A euphemism is of course a large brass wind instrument.

It was also revealed that some secondary sellers also buy tickets themselves in order to sell them on their sites, further sucking supply out of the market.

Only a minority of tickets are actually sold by fans, to fans.

The benefits of this system are clear:

First it is a form of “yield maximisation” whereby seats are sold at a (higher) market price rather than at a fixed price.

Second, by having Seatwave or Viagogo buying the tickets the promoter de-risks himself. His job is to produce the show, organise and advertise the show and propose the ticket face value. In return he pays for the venue hire and bears the risk of ticket sales. If he can get someone to buy (and take on the risk of) 10% of the tickets up front, he can be more certain the show will sell out.

Third, the promoter makes higher profits for himself, as he pays the band a fixed fee upfront, based upon the face value of the tickets. If he can sell them at higher than face value, he makes more money.

The professional power seller benefits as he now has an easy route to market – it must beat the misery of standing in the rain and cold outside a venue whilst barking “Got any tickets, buy or sell, any tickets” whilst avoiding the old bill, which is what happened in the ‘80s.

It is in the interests of secondary ticket providers to encourage power-sellers, as these sellers will drive more ticket sales and thus growth and increased profits.

All good news for everyone concerned, except the paying customer – i.e. you and me who pay higher prices and have a harder time buying tickets in advance at face value.

Our problems are several:

1. Because the promoter holds tickets back to be sold on secondary sites there are fewer tickets available so the chances of buying one are less.
2. The added scarcity of tickets artificially inflates the secondary market price purely through the law of supply and demand: Fewer tickets on sale = higher prices – as some people are able / willing to pay more than others.
3. It is easier now for fans to buy more tickets than they need knowing than can easily sell them on Viagogo / Seatwave at a profit, thus subsidising their night out. This again reduces the supply of tickets available at face value and the added scarcity inflates the secondary price further.
4. The best seats are often never placed on sale to primary ticket sellers so if you want a front row seat you will have to pay over the odds.

The Dispatches programme focused on the consumer law angle and gave the view that Seatwave and Viagogo were not being as transparent as they should be. I think the system itself is flawed, leading to the market being manipulated for the benefit of promoters and secondary ticket sellers. It is making tickets scarcer and thus artificially inflating the price that consumers have to pay. This is a Bad Thing.

If Seatwave, Viagogo and the promoters have their way, very soon the front tens rows of every gig in the land will be exclusively populated by hedge fund managers, investment bankers and their dreadful Sloaney fiancées. You won’t be able to hear the band above the sound of champagne corks popping, yah-yah-ing and the occasional neighing. If you want to stop this – get involved…

Record #13: Queen: Scandal