Under no circumstances should Ticketmaster be in the secondary ticket industry, and the country needs a national standardized ticketing code, according to two Arizona...

Under no circumstances should Ticketmaster be in the secondary ticket industry, and the country needs a national standardized ticketing code, according to two Arizona State University economic professors who spoke before a group of ticket brokers and other executives of the ticketing industry this weekend in Las Vegas.

Dr. Stephen Happel and Professor Marianne Jennings, considered two of the foremost experts on the ticketing industry, told the audience during the final day of the National Association of Ticket Brokers annual convention that Ticketmaster’s presence in the industry through its acquisition of TicketsNow, poses a threat to the market.

“The more I look at it, as a free market economist, I believe Ticketmaster shouldn’t be in the secondary market in any way, shape of form,” Happel said. “It creates a vertical monopoly, and ultimately consumers are hurt by monopolies in vertical markets.”

By allowing a dominant primary ticket seller, like Ticketmaster, to gain more control of a market, consumers are deprived of a “highly evolved market,” which leads to limited choices and less competition, according to the professors. In addition, Ticketmaster has taken an active role in helping legislators formulate new laws for how the ticket industry is governed, which can also lead to unfair advantage.

Ticketmaster’s acquisition of TicketsNow was criticized from the beginning for possible anti-trust issues, but after a federal review of the purchase it was allowed to go through.

Jennings believes that Ticketmaster can be a part of the secondary market if it plays by the same rules that all brokers do, also not try to control legislation or access to information.

“Right now, that doesn’t exist. In fact, it seems Ticketmaster is trying to push in the other direction,” Jennings said.

Ticketmaster spokesperson Albert Lopez told TicketNews that the company declined to comment on the presentation.

Jennings spelled out seven guiding principles that describe the ticket industry, which could help brokers to educate the public and state governments about how the industry works. They are:
• Tickets for High-Demand and/or Limited Supply Events Are Underpriced.
• Underpriced High-Demand and/or Low-Price Events Produce Cues.
• Time is a Cost.
• Where There Are Nuisances, There Are Regulators
• Price Controls Don’t Work.
• Allowing Market Participants to Structure Regulation of Their Market Adds Vertical Integration and/or Monopolies to Markets.
• Regulation Without Full Information Will Thwart a National Ticket Market.

The last one, Jennings and Happel said, is the direction the industry needs to go in order to end some of the problems it currently faces. Establishing a national, standardized ticketing system would create a uniform structure for tickets; formulate a definition of property rights as it pertained to tickets; and make interstate commerce for tickets easier to traverse.

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