You don’t want to get on The Boss’ bad side.
Ticketmaster had to learn that the hard way when, last February, it was widely reported that the ticket seller sent fans seeking regular priced tickets to Bruce Springsteen concerts to the website TicketsNow.com, where entry to the show costs up to hundreds of dollars more than face value.
Ticketmaster, which owns TicketsNow, said it was an accident, a computer glitch directed fans to its secondary ticket site, but the damage was done. Springsteen was angry: “They did this even when other seats remained available at face value. We condemn this practice,” he said in a statement.
Not only did this debacle hurt Ticketmaster’s reputation, but it left a black mark on the secondary ticket market — a $2 billion business that has been thriving for decades.
Until now, the market was driven mostly by scalpers and brokers. The Internet, though, has helped legitimize the industry by making it much easier for people to offer tickets to fans at prices above face value. While some people decry this practice as being unfair, others say the ticket industry is just like any other; people want to sell to the highest bidder.
“If 50,000 people want to go see Miley Cyrus and they’re all willing to spend $100 then why not?” says Sucharita Mulpuru an analyst with Forrester Research. “That’s the way the world works.”
Michael Hersfield, a Toronto-based entrepreneur who ran the now defunct secondary ticket site LiveStub, agrees that there’s nothing wrong with people paying more for in-demand tickets. It’s how these tickets wind up on the market, however, that troubles him.
“The market isn’t transparent, so there’s more opportunity for abuse,” he says.
“Why would Ticketmaster sell their best tickets for face value? They could get $1,000 for a $100 ticket. So they split the pie with everyone who’s part of the bottom line, that’s the backdrop of this whole story.”
Hershfield says artists are also holding back the best seats for resale, so they can have a bigger payday. And, despite how it looks, it’s hard to argue that they’re doing something devious. These days artists make most of their income off concert tickets, so the old model of keeping prices low may be out of date.
That’s at least what Mulpuru thinks. She says the secondary ticket market is on its last legs — tickets will soon become more expensive from the get go.
“You’ll start seeing pricing that converges more to market value, so there will be less of an opportunity to resell those tickets,” she says.
