That sounds like rational individual action by the promoters, not a conspiracy. They want to be sure their concerts will sell out and price them accordingly. In so doing, the total takings may be lower than at a price that only just fills the hall, but in return they get a visible sign of success. The difference in takings is what they choose to pay to buy this advertising. Or less than this if they also get part of the takings of official resellers.
This isn’t the only possible arrangement—they could adopt the airlines’ method of selling tickets cheap a long way in advance and ramping up the prices as the date approaches. Or sell them by auction, or by lottery, or anything else. I am not seeing much of a problem in underpricing for direct sales and allowing a secondary market. A concert that sells out has, by definition, put tickets into the hands of as many fans as possible.
Where there are both official resellers and laws against private reselling, presumably the laws are to protect the official resellers’ monopoly, paid for by the industry and passed under the pretence of yielding to the demands of fans. That would be something in need of reform.
This isn’t the only possible arrangement—they could adopt the airlines’ method of selling tickets cheap a long way in advance and ramping up the prices as the date approaches.
A puzzle: why don’t event organizers sell tickets in advance as in the airlines’ model? More generally, why don’t they practice more price discrimination, especially given the professed aim of underpricing tickets (favoring their poorer but still dedicated fans)? Does the less concentrated nature of the event/venue industry make a difference?
I am not seeing much of a problem in underpricing for direct sales and allowing a secondary market.
It’s just occurred to me that this is the way that IPOs work. A company going public wants its offering to sell out promptly, to get the money it went public to raise. A consensus value is established in subsequent trading, and if the people who bought into the initial offering see their holdings immediately bump up in value, they’re happy too.
That sounds like rational individual action by the promoters, not a conspiracy. They want to be sure their concerts will sell out and price them accordingly. In so doing, the total takings may be lower than at a price that only just fills the hall, but in return they get a visible sign of success. The difference in takings is what they choose to pay to buy this advertising. Or less than this if they also get part of the takings of official resellers.
This isn’t the only possible arrangement—they could adopt the airlines’ method of selling tickets cheap a long way in advance and ramping up the prices as the date approaches. Or sell them by auction, or by lottery, or anything else. I am not seeing much of a problem in underpricing for direct sales and allowing a secondary market. A concert that sells out has, by definition, put tickets into the hands of as many fans as possible.
Where there are both official resellers and laws against private reselling, presumably the laws are to protect the official resellers’ monopoly, paid for by the industry and passed under the pretence of yielding to the demands of fans. That would be something in need of reform.
A puzzle: why don’t event organizers sell tickets in advance as in the airlines’ model? More generally, why don’t they practice more price discrimination, especially given the professed aim of underpricing tickets (favoring their poorer but still dedicated fans)? Does the less concentrated nature of the event/venue industry make a difference?
Perhaps people who plan a long time in advance aren’t fun to have in the audience.
It’s just occurred to me that this is the way that IPOs work. A company going public wants its offering to sell out promptly, to get the money it went public to raise. A consensus value is established in subsequent trading, and if the people who bought into the initial offering see their holdings immediately bump up in value, they’re happy too.