We're going to give you a very unpopular opinion today: ticket scalping is a good thing
for fans and artists.
The band and the venue want the stadium to sell out, not just to get the ticket money,
but because they make money from merchandise and food and alcohol sales too.
A promoter is normally involved to help market the event, so they take a cut.
The venue needs to pay its staff, and so do the band.
And that all applies to sports and comedy too, it's the same economics.
Plus a sell out crowd creates a better atmosphere, increasing the quality of the experience for
everyone.
The ticket price is split between the artist, the venue, and the promoter, typically around
80% to the artist but this will change if they are given a guarantee on the sales, so
the artists know they're getting a minimum fee, no matter how many tickets are bought.
Superstar acts might be able to get a bigger cut, especially if their prices are higher.
Ticketmaster, now called Live Nation Entertainment after a 2010 merger, control 80% of the US
ticket market, across every kind of entertainment.
Thanks to all their deals, it's unlikely bands or venues can sell tickets themselves.
With a few rare exceptions.
And now, a large amount of concert tickets enter the resale market, which is where the
scalping happens.
In previous decades, scalpers would have to stand outside the venue and were often breaking
local laws.
But now there's nothing illegal about reselling a ticket, and in the vast majority of states
there's no law against reselling at a higher price.
The majority of this reselling happens through StubHub, which was founded in 2000.
They allow fans to resell tickets for events they can no longer attend, with the benefit
of guaranteeing the authenticity of the tickets.
But, in reality, it's a platform for the scalping market.
StubHub even has a password protected portal for its top Sellers who shift over $50,000
in tickets each year.
They even provide better rates and software to help manage large volumes of tickets.
This isn't "fan to fan" and obviously they know it.
StubHub gets a cut in fees, just like Ticketmaster.
And Ticketmaster themselves have tried to compete by offering resale on their own site
as well as through their subsiduary TicketsNow.
This is why the ticket business is how it is.
So, why is the $3 billion industry of scalping a good thing?
Absolutely.
I mean, the reality is that we have a limited number of seats and a lot more people who
want to buy those seats.
How do we allocate those?
Sometimes, tickets are sold far in advance and we don't know how valuable those tickets
are going to be or what people are going to value them at and so often times secondary
markets steps in to sell those high value tickets at a high price, low value tickets
at a low price.
Sometimes, you can buy below face value, sometimes above face value.
It's just an arbitrage opportunity that the secondary market is trying to take advantage of.
The problem with concert tickets is that they are hugely underpriced.
It's basic economics; if they were priced at the market value, there would be almost
no scalping because only a few people would be prepared to pay a higher price.
But if I or a bot bought every ticket to an Adele concert or a big Nicks game, there would
definitely be enough demand to sell every ticket at a 50% markup, maybe way higher.
This means they are being sold at dramatically under what the market thinks they are worth.
This encourages scalping but it also means for years and years fans who have bought tickets
directly from ticketmaster, are getting them way cheaper than the market says they should
be.
That leads to the next question; if the demand is so high, why aren't they raising the
prices?
There are two main reasons for tickets being sold at a low price to general audiences.
One, performers and promoters want to guarantee a sold out stadium, partly for the atmosphere
but also for all the additional revenue of refreshments and merchandise.
And two, they don't want to exclude so-called "true fans", who want to come but can't
afford the higher prices.
But let's be clear on something, going to an Adele concert or a Nicks game is not a
necessity, it's a luxury.
People don't demand a cheaper iphone just because they are an Apple fan but think the
phone is too expensive.
They just buy a different phone.
So, if the fans are paying the huge resale prices, it's because they want the ticket
more than they want to keep their money.
The frustration that most people feel is that they are being taken advantage of, because
they know their money isn't going to the artists, some unrelated person is making a
profit on StubHub.
And this angers the artists too.
A few of them might resent that the money is money they could have made, but most big
acts want their fans to get a good deal.
However, while acts like Chance the Rapper have bought up scalped tickets at a loss and
resold them to fans at face price, plenty of other acts have set aside blocks of tickets
to be put on resale.
Acts like Bon Jovi, Celine Dion and Van Halen have all be found to profit of the resale
market.
But since this is how the market works, it might as well be Celine Dion benefiting vs
a random scalper on StubHub.
It's also worth noting that for artists, scalping is another layer of security.
They get to sell out a venue at the price they agreed to and then the resale market
manages the demand.
If there is less demand than expected, the scalpers lose out and they just have to sell
the tickets at lower than face price.
If artists want to stop scalping entirely, they either have to raise ticket prices to
reach their market value, or they have to perform more shows in each venue, so that
the supply can come closer to demand.
Unfortunately, Price is one of the only ways to manage demand in a marketplace so one alternative
might be having software automatically increase the price at the point of sale, as the demand
rushes in.
That way, you know that the reward is still going to the artist, not a scalper who's
just in it for the money.
Want to learn more about business theory and pop culture?
Be sure to like and subscribe to be notified of our next segment.
For more infomation >> Here's Why Ticket Scalping Is A Good Thing For Fans And Artists - Duration: 5:52.-------------------------------------------
Hope is a Waking Dream// Karan Mehdirata - Duration: 3:29.
If it is happening in your Dreams
Then why you're not letting it happen in your real life?
You need to give up on things that stops you
from moving ahead
Get Up.Move on.Shine.
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Billy Eichner Thinks Trump is Obviously Guilty - Duration: 3:03.
For more infomation >> Billy Eichner Thinks Trump is Obviously Guilty - Duration: 3:03. -------------------------------------------
Think Slavery is a thing of the past? Sadly not - it's here, now, in Newcastle #SpotTheSigns - Duration: 3:37.
Currently in the world it's estimated there are about 40 million people in
slavery conditions. Here in the United Kingdom it's estimated that it's about
13,000 but that is a very conservative estimate, so these are people who are
being traded as a commodity, exploited and actually not paid or given their
freedom. So, it's a major issue here in the United Kingdom but also it's
an issue here, in Newcastle. It's shocking to believe that in this country we have
people who are in slave trade conditions. We think that this is in the history
books and the days of Wilberforce are long gone but actually it's alive and
kicking, and it's alive and kicking here very much in Newcastle. Q. This will
seem inconceivable to people. Is it something that's happening under our
noses, out in the open, or are these people hidden away? What's the picture?
Well sometimes it is hidden - but sometimes it's hidden in plain sight. So,
when you look around this city, which is a great city, you know; you think about
people working in car washes, in nail bars; are they being properly
treated? Is it possible to have half a dozen people washing your car for
whatever the price is, who maybe foreign nationals? So it could be there in plain
sight; if there is a nail bar, you know, what do the people look like there? What
are their ages? How do they interact with people who go there? And of course, where
we have businesses that are operating properly, car washes and nail bars and
other premises, those are the ones we should use. But then also, this
is about fairness, and when you think about the people here in Newcastle,
they very much stand for fairness and they want people to have their fair
chances. Well, this is where people don't have those fair chances, so you know we
may talk about it in technical terms, we may talk about it as exploitation, as the
Modern Slavery Act, but a lot of it is about is someone being fairly treated
and fairly paid in their working conditions or their life? If they don't
have freedom, if they don't get their rights, if they're being exploited and have
become a commodity for someone else to use to make money in a really abhorrent
way, then that's what modern slavery is and I don't think that should exist
anywhere in the United Kingdom or anywhere in the
world. If you see something where you think somebody is being exploited in
their workplace - in the conditions, that look like they're not being paid, or
looked after, or they haven't got their freedom, then inform the authorities,
inform the local authority or the police or you can contact the Modern Slavery
Helpline so there's a number of things you can do. If you see a nail bar where
you think 'those people who are a bit young working there', or there's people
that don't have their freedom, or there is somebody watching over them, contact
the local authority; let the authorities take action. But also, if you see things,
boycott them. If you see a car wash and you think 'actually, that doesn't look
right', you know there are people there, they're not wearing protective gear, the
electricals do look poor - there was a car wash in London where somebody died due
to dangerous electricals - so then boycott those, and use the good premises. So
there's a lot the community can do. But also, make this
unacceptable. In the UK we've made other crimes unacceptable, you know if we look
at the journey we took to make domestic violence unacceptable, it took a journey.
Let's not take a long time to make this unacceptable. Everyone in the community
should be saying 'we don't want people exploited in the workplace. We don't want
people treated unfairly. We don't want people used to commit crimes
whereby they are being exploited, and we are going to make sure that they are
protected'.
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