By: Charles Kaufman | President & CEO of Seatslink, Inc.
I have to admit, I don’t exactly hate it.
But, I don’t love it either, and that’s the fundamental dilemma with Pearl Jam’s decision to not allow transfer or open resale of tickets to its eagerly anticipated upcoming Giganton tour, which went on sale today as part of Ticketmaster’s Verified Fan lottery and Pearl Jam’s Ten Club presales: It’s an imperfect solution to a problem that may be impossible to solve.
The rationale behind this policy was to ensure that anyone lucky enough to get a ticket to any of the 16 dates on the band’s North American mini-tour is an actual fan who paid face value, and not a broker who would then resell the tickets that they bought, presumably to an actual fan, but at a steep premium. Tickets for Pearl Jam shows in Colorado and New York will still be available on the resale market as state laws mandate open transfer of tickets. Because tickets for dates in every other market are non-transferable and the original purchaser will need to furnish a valid ID to enter the concerts, it’s prohibitive for brokers to buy them since they won’t be able to deliver the mobile-only tickets to their buyers unless they accompany them into the venue. Those who end up not being able to attend a concert that they bought tickets for will be allowed to resell them at face value through a program administrated by Ticketmaster and Pearl Jam.
This seems like a welcome fan-friendly step for Ticketmaster, a company historically perceived as offering poor customer service and public dissatisfaction, especially when it comes to high-demand events. Perhaps it’s the beginning of a larger philosophical shift in the overall ticket landscape that will eventually make all components of the market, both primary and resale, better for consumers. It also makes sure that the most vital element of the concert experience- the artist – is not cut out of any potential profits from any and all ticket sales. This is an important tenet of the whole issue as artists rely more heavily on touring for income than ever before. However, there are potential pitfalls boiling just underneath the surface that could present real problems for fans and artists, and set the ticketing market back decades in terms of safety, reliability, and efficiency; an area that the online ticket resale space has become very good at addressing over the years.
For fans, it’s about supply. The pricing side of the argument is mainly an artist issue, a promoter issue, and an investor issue because it’s tied to revenue. For fans, the issue is more about supply than anything else. At the end of the day, they just want to know that they can get tickets. Whether ticket sale and transfer is strictly limited in the ways that Pearl Jam has implemented, or tickets can be transacted for and transferred openly at whatever price the market will bear, in a 20,000 seat arena, fan 20,001 and beyond is always out of luck. A dormant supply chain further compounds this conundrum because anyone who was not in the exact right place at the exact right time has their options for getting into the event severely limited. Capitalism is not a perfect economic model, but it ensures availability of scarce goods and services through channels such as resale and that any time a good is in demand, it can somehow be legally obtained. That is a fundamental and necessary aspect of our economy, and it ultimately helps to ensure fairness. So, while resale can never exactly placate fan 20,001, neither does the Pearl Jam model. But, the Pearl Jam model kills the open market that’s so essential to the consumer experience and that very often works out in favor of the fan in terms of price. The bottom line is, if at any time between the date of an onsale and the date of a show, a person who decides to go appreciates being able to find tickets on-demand, even if at an exponentially higher price. This also doesn’t eliminate the sensitive dynamic of haves and have-nots; it merely reassigns them.
in a 20,000 seat arena, fan 20,001 and beyond is always out of luck
What’s Ticketmaster really up to here? The $98 Pearl Jam ticket price, plus $5 charitable donation and associated fees, is a major score for the fan. But, is it anything more than a doorbuster? With maximizing revenues being of utmost importance to artists, especially the ones that figure to have limited shelf-lives, can we be confident that the under $100 ticket will be anything more than an anomaly? Probably not, especially when you consider that the trend on prices has ratcheted up to record levels. What’s more, Live Nation even recently touted the idea that concert tickets are under priced and should- not could, but should – be even more expensive. So, while maximizing revenues at $98 per ticket is more than fair to the average fan, who’s to say that the next ticket sale conducted in this way won’t happen at thrice the price?
Anyone who was waitlisted for the Pearl Jam Veified Fan presale was told not to worry as there’s a general onsale scheduled for Friday, January 24th. Wait. What? This tour was supposed to be so hot that the reason for the lottery in the first place was to manage demand. Now it seems as if the equitable gesture was insincere. If I’m a “true fan” who got waitlisted, as nobody was flat out denied, then I’m annoyed at learning that there’s a general onsale the following day because I theoretically could have been included in the lottery. So, while most fans who registered for the lottery didn’t get tickets, the band and the ticket seller at least got something: Email addresses, ripe and ready to be marketed to. Ironically, thanks to ticket delivery being now almost exclusively mobile through a primary ticketing portal, the resale market has been instrumental in assisting the primary market in harvesting email addresses and other marketing leads because the secondary sales must be fulfilled via the mobile transfer process.
About those profits… Do bands really lose out on resale market gains? Yes and no. It’s a Catch-22 because in theory, an artist should receive whatever is agreed upon in its contract, and if that is accomplished, then there really shouldn’t be any bone of contention.
The argument that it’s unfair for an unaffiliated third party middleman such as the resale market to make more on art than the artist does is a valid point.
But, that only comes into play for a minimal amount of events, and it usually involves only the artists that are wildly successful and materially wealthy as it is. Does that mean that these artists are less entitled to benefit more completely off of their art? Of course not. But the marketing collateral that comes attached to an instant sellout and the publicity associated with robust resale demand is a profit driver for the artists anyway. Besides, is it really fair to assume that someone willing and able to spend money on a product is any less of a true fan than someone else? It’s fairly obvious that anyone who shells out $1,000 on a Rolling Stones ticket, for example, is not only a true fan, but a heavily devoted one; and one capable of spending handsomely on the product. Now, how is a fan such as that anything but a benefit to the artist?
Any idea that the prices that concert tickets are offered at will ultimately be favorable to the average fan is unfounded. The propensity in the live event space is to maximize profits with inflated ticket costs that specifically cater to high net worth clients, in spite of empty seats in the general seating area. So, the notion that wealthier fans are intrinsically less valuable to artists based on a vague notion that such fans are disingenuous is false due to the fact that ticket prices on the primary markets are skewing higher and higher, and more out of the reach of the fan with limited means.
So, here’s what works about this… The fan-to-fan face value exchange is the feature of the Pearl Jam ticket program that makes the most sense as far as a component that can do the most amount of good for the market in the long run. What continues to dog the primary ticket space is its lack of user-friendliness, a big part of which has been its staunch “no refunds” policy. The lack of desire to offer refunds comes from an unwillingness to reacquire risk once a ticket is sold. In theory, this attitude is curious given that most any concert is billed as high-demand, mainly as a public call to action. So, if any and every concert really is a scorching hot draw as the primary would have you believe, then there should be a buyer on the other end of your refund who’s delighted to get the tickets that you had to sell back. That refunds are not given is an admission that the market for live events is at any time much cooler than is led on. The fan-to-fan face value exchange basically issues the refund without the primary having to reassume risk. Again, this program comes off as a real boon for high-demand concerts. But, it will not be as attractive for low demand concerts where there aren’t necessarily buyers lining up, at least not at face value. Still, it’s refershing to see the primary ticket market facilitating a service that meets the needs of the fans. Too often, the pimary market acts out of self-defense, and seems more interested in marginalizing its competition than in satisfying its customers. So a genuine customer-centric component to a much-maligned service model is a step in the right direction of creating a fairer marketplace and overall better consumer experience.
However, the more rigid facets of the Pearl Jam model, namely the lack of transferability and the closed distribution loop leaves the ticket market vulnerable to some of the seedy elements of yesteryear. Already, brokers are making contingency plans to escort buyers into the concerts, meaning that someone who bought tickets to a Pearl Jam concert on the resale market must pay to get its broker into the show since the broker will be the legal, verified ticket holder. So, we now welcome the infamous street scalper back into the fold, which is something that the online resale business has done a very effective job in eliminating. What’s more, speculative buying in the two markets with mandatory transfer will be overwhelming since literally every broker in the land will zero in on those two concerts, busting the market out even more than usual. It can also push the resale market over to less-regulated, less-reliable oulets like Craigslist, where customers are more likely to get scammed. In fact, any time access to highly desired goods or services are withheld, the risk of a black market or other below board measures of obtaining those goods or services increases. There will surely be confusion and mistakes due to this awkward distribution model, as many consumers will turn to the secondary market for tickets, a point that the primary market will offer up as a cautionary tale against resale. But, resale functions very fairly and efficiently if it’s left alone to do its job in a logical way.
The tight control of one entity over an entire marketplace is ultimately never good for the customer.
It can force them into Draconian unfavorable terms and conditions, with little or no alternative for recourse. Our fundamental economic principals require choice and competition in order to help establish fairness.
What would make the experience truly better for consumers is if the ticket market followed the airline model and outsourced inventory to affiliated third party aggregation sites, for example as with Travelocity and Expedia. The comparison between event tickets and airline tickets is common because each is a reservation, an expiring good, and can be purchased at similar price points. But, it’s not a direct comparison because the opportunity to attend a live event is more limited than getting on an airplane is, meaning that event ticket pricing is subject to greater volatility and heightened public emotion. Offering event tickets up on multiple platforms, with a reasonable refund policy, will provide the competition and distribution that the consumer craves and is natural to our economy. From a supply standpoint, the resale market must continue to exist in order to offer on-demand access to tickets, but a more attractive overall ticket market will mellow the resale component which will in turn be competing on service with a more appealing primary market. It’s not out of the realm of possibility for resellers to partner with artists for a cut of resale revenue, as resellers promote the artists anyway and work hard to help them move inventory. This would create a mutually supportive ecosystem where everyone benefits. In fact, sports teams and resellers have been forming alliances for several years and those alliances have been good for ticket buyers and teams alike.
Should I stick to my guns and decry what an unmitigated disaster the Pearl Jam Giganton tour ticket strategy is going to be? As someone who earns a living selling tickets, and who believes in the good that services such as my company Seatslink provides, I should not only be scared for the impact on my business, especially if it becomes the norm for the biggest events, but for the precarious position it puts many fans in. But, also as one who truly cherishes the live event experiece, and who realizes the value in art and in artists, and how special each can be to the fan, I can’t find fault with any effort to level the playing field for the two most important components of the concert experience: the artist and the fans. Besides, there are some novel concepts here that work on a lot of levels and will hopefully stick around. I just know for certain that giving over total control of the marketplace to one entity does not benefit the fan, and that will eventually not benefit the artist. At the same time, supply issues will never go away, and become even more dire with a lack of distribution. Just ask fan 20,001.
I welcome your feedback on my articles, whatever your opinion may be. I’m fascinated by the ticket market as a facet of our overall economic landscape and often discuss my views in writing. For tickets to any event, anywhere; including the best in sports, concerts, theatre, and more, please visit www.seatslink.com. Feel free to DM me on LinkedIn, email firstname.lastname@example.org, or call 718-676-0504 for assistance with tickets and events.
This post was originally published on LinkedIn and reposted here with the author’s permission