Scalpers depend on the supply/demand characteristics of a market being tipped far in favour of demand. What if the demand is removed? Ticket vendors and event organisers have tried to implement this with threats that tickets found to be onsold will not be honoured. The logic behind this is that if people don't buy tickets from scalpers, there will be no market for the scalpers to exploit. The failure on the part of the organisers and vendors is that this implementation of that logic is fatally flawed; good honest people still want to buy tickets; and because there is a finite supply of said tickets, they have to buy from the only source available: scalpers. This has been somewhat successful in decreasing the demand in the scalping market, but it has also meant that some people have had to make the conscious decision not to buy tickets for an event that they want to go to.
My theory is that the only way to truly reduce the demand for scalped tickets to zero (or anywhere near it) is to allow market demand to dictate ticket prices. Yes, I can hear the horrified screams of bands and music fans everywhere as I say this. What do you mean we should have to pay hundreds of dollars to go to the concert by that band I love?!?! WTFBBQ?!?!
Sure, ticket prices would probably skyrocket immediately. But consider this; instead of the hard-earned money you spend on tickets going to scalpers (if you're unlucky enough to not get in early), the money goes to the promoter, the venue, and of course the performer. For big name bands with huge fan bases this would be a massive win in terms of revenue from concerts. But what about the social implications?
Many bands are known to impose limits on ticket prices on purpose, just so that they can allow their most loyal fans and followers to attend concerts. Allowing only the richest fans to attend a concert will mean the overall culture suffers, right? Suddenly who can go and who cannot is dictated purely by how much money that person is willing to pay. Is this fair? That could be an entire other discussion in itself, and I don't particularly want to get into it here.
My thoughts are less on the implications of this on the followers and attendees of events, and more on the effect it will have for scalpers and bands, and how such a system could be implemented to maximise success for both bands and fans. I want to see less money going to scalpers and more money going to the performers and musicians that people are paying to see.
So how would we implement such a system? The only way scalpers can be defeated completely is if there is no market for the tickets they buy. So how can we do this?
- Decrease the demand for second-hand tickets - this is the approach currently being tried by governments and organisers.
- Increase the supply of tickets - this simply can't be done for most shows, especially if you already have the biggest venue in town.
Obviously, the only real option is to reduce the demand for scalped tickets. How can we do this? The approach already being taken is to reduce the demand by increasing the risk to potential buyers. This results in a loosing situation for buyers who just want to see their favourite band when their tickets are invalidated or they are barred from entering a concert.
What if ticket sales are turned into a priority list, ordered by the amount paid, which is completely fluid until tickets are printed at some time before the concert? Suddenly legitimate buyers can simply outbid scalpers. If scalpers try and outbid the legitimate buyers, they will find themselves with tickets on the night of the concert that no one wants to pay more for (because those people have already outbid the scalpers). Of course this system would not eliminate scalpers altogether; there would still be a market for scalped tickets among latecomers who wanted to buy tickets at the last minute. The implementation of such a system would be complex because of all the stakeholders involved. And as I have said, there are significant social issues and business relationships that would have to be sorted through before such a system could be put in place. Not impossible, just the sort of operation that would be suited to a committed and skilled entrepreneur.
The other option of course is to put up with scalpers, and accept them as a natural evolution of the supply/demand market. Either way, people will always have to pay market rates for tickets, whether that market is set by the organizers or the scalpers. There is no escaping the supply/demand curve it seems. That may sound cruel, but it seems that it is the honest truth of selling such limited quantity goods.
I'm only an engineer, not a marketing or sales person. So by all means, feel free to discuss any flaws or shortcomings in the theories and opinions I have expressed.
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