It was a strange offer, even for the internet marketplace Craigslist: one ticket to see The Killers‘s sold out concert on October 24 at the Hammerstein Ballroom in New York City. The price was high — $600 — but the conditions of the offer made it stand out. The seller intended to use the ticket himself.
The 30-year-old hedge fund associate from Brooklyn wasn’t sure that he actually wanted to sell the ticket. But as he browsed the internet-based community and saw the sky-high prices and the even higher demand, he figured he’d give it a try.
“I looked out of curiosity and was blown away,” the seller explained in an exclusive interview with TicketNews, asking to remain anonymous. “I posted a random message stating that I was excited to attend the show but if someone was desperate enough to make a ridiculous offer, I’d consider it.”
As the stock market continues its roller coaster ride of historic losses and short-lived rebounds, such a high price might seem just that — ridiculous. Some have questioned how long the ticket and touring industries could weather the economic downturn. Will consumers continue to spend on luxuries, such as concerts and other live events, as the price of necessities rise and the job market remains unsteady?
For the time being, the answer seems to be “yes,” at least for high-demand events.
Popular acts like The Killers have no problem filling large venues, such as arenas and venues. But when those same acts book smaller venues like the Hammerstein Ballroom, tickets often sell quickly. Die hard fans are left to compete for any tickets that surface on the secondary market, driving up prices, the Craigslist seller said based on personal experience.
Still, he was surprised at the response he received to his online post. “I was blown away to actually receive an offer of $600 for my ticket,” the would-be seller commented.
Although he turned down the offer and went to the concert himself, he quickly noted, “The current economic situation certainly made this decision far more difficult.” Having bought his ticket at face value ($45) the morning tickets went on sale, he would have had profits at about 1300 percent had he gone through with the deal.
Entertainment and the Economy
Repercussions of the economic downturn are being felt in all sectors of the entertainment industry right now. For example, in Hollywood NBC Universal cut approximately $500 million from its 2009 budget, while Paramount cut costs by about $50 million and scaled back its scheduled output, according to published reports. But that doesn’t mean consumers are expected to cut out entertainment purchases entirely.
“People are feeling like they’re depriving themselves of fun they would be having by buying a new car or taking a trip,” Tom Adams, president of Adams Media Research, explained in an interview with Time magazine. “So they feel fully justified in continuing to spend on more cost-conscious kinds of entertainment.”
But how will this money-conscientious turn affect the live entertainment sector, where the face value for tickets has increasingly grown over the years? That was the question when ticket industry giant Ticketmaster announced plans to lay off about five percent of its workforce in an effort to cut $35 million from its operation costs. More than 60 of the jobs will be cut from secondary ticket company TicketsNow.
“[Next year] will be the year of massive consolidation in this industry, a drastic reduction in the number of professional full-time resellers, and a more realistic expectation of those surviving as to where the future is heading,” one broker predicted in a recent interview with TicketNews.
Other industry analysts agree that consumers will think more carefully about how much money they spend for a single night of entertainment. Pollstar’s editor-in-chief Gary Bongiovanni told Time, “It defies logic to think people worried about losing their houses are going to buy three-figure concert tickets.”
The tentative Craigslist seller agrees, to some degree. He says that, even before the economy took a nosedive, his personal price limit was set at about $100, and he rarely spent that much. And even though he continues to work for the hedge fund, he’s more careful with how he spends his money now.
“Given the state of the economy, I’m a little more choosy about the shows I attend,” he explained. “If it’s a band that I like but am not a huge fan of, I may hold off now, whereas I’d have probably gone before. Or if it’s a band I really enjoy but the tickets seem overpriced — I’ll hold off.”
However, he’ll still leave the door open for future deals on the secondary market, depending on the circumstances.
“It’s actually a hassle finding a buyer and arranging a way to exchange the tickets and payment [on Craigslist]. Using StubHub or other similar sites is easy but their commissions can be steep. So it isn’t something I go out of my way to do even if there is a profit to be made,” he explained. “But if I’m going to a show and have an extra ticket or two and can make some money or sell it for enough to pay for my ticket, I’m certainly open to doing that again.”