And if an organization does let the price float to its natural level of hundreds of dollars, then you get shocked articles in the newspaper on ‘ticket inflation’ and angry letters to the editor about how in their day you could get in for a nickel...
Would public hostility really result in lower profits than just selling at the market equilibrium price? If I did not know about the actual amount of scalping that happen, I would be very suprised to learn that tickets are priced so far below equilibrium.
Would public hostility really result in lower profits than just selling at the market equilibrium price?
The public hostility is clearly a negative of some kind; whether it actually reduces net lifetime discounted income or some metric like that, you’d have to ask an economist.
But the artists clearly do want to avoid the true prices being in any way ascribable to them. An example: I read in an article somewhere of the lawsuits against Ticketmaster where apparently one of the revelations was that high powered acts were able to quietly demand shares of Ticketmaster’s ‘fees’ - this price increase was not perceived as a price increase by the act, but as Ticketmaster’s fault. They took the blame in exchange for the act using their services, basically. I would guess that Ticketmaster gets a bigger percentage of the ‘fees’ than they would get in a straight ticket price increase; this difference would represent Ticketmaster’s compensation for taking the heat. (And there was another bit, about acts demanding larger fractions of the tickets, which they would quietly sell at premium prices—but without the public opprobrium accompanying official prices that high.)
The public hostility is clearly a negative of some kind; whether it actually reduces net lifetime discounted income or some metric like that, you’d have to ask an economist.
There are a lot of people in the entertainment industry and they tend to want to make money. Shouldn’t they know the answer and act upon it by now?
Hostility might not be the only risk. If you want to have fans for an extended period, you’d do well to attract young people—and they’re likely to not have as much money.
Would public hostility really result in lower profits than just selling at the market equilibrium price? If I did not know about the actual amount of scalping that happen, I would be very suprised to learn that tickets are priced so far below equilibrium.
The public hostility is clearly a negative of some kind; whether it actually reduces net lifetime discounted income or some metric like that, you’d have to ask an economist.
But the artists clearly do want to avoid the true prices being in any way ascribable to them. An example: I read in an article somewhere of the lawsuits against Ticketmaster where apparently one of the revelations was that high powered acts were able to quietly demand shares of Ticketmaster’s ‘fees’ - this price increase was not perceived as a price increase by the act, but as Ticketmaster’s fault. They took the blame in exchange for the act using their services, basically. I would guess that Ticketmaster gets a bigger percentage of the ‘fees’ than they would get in a straight ticket price increase; this difference would represent Ticketmaster’s compensation for taking the heat. (And there was another bit, about acts demanding larger fractions of the tickets, which they would quietly sell at premium prices—but without the public opprobrium accompanying official prices that high.)
This post seems relevant.
There are a lot of people in the entertainment industry and they tend to want to make money. Shouldn’t they know the answer and act upon it by now?
Hostility might not be the only risk. If you want to have fans for an extended period, you’d do well to attract young people—and they’re likely to not have as much money.