Donna Wentworth
( Archive | Home | Technorati Profile)

Ernest Miller
( Archive | Home )

Elizabeth Rader
( Archive | Home )

Jason Schultz
( Archive | Home )

Wendy Seltzer
( Archive | Home | Technorati Profile )

Aaron Swartz
( Archive | Home )

Alan Wexelblat
( Archive | Home )

About this weblog
Here we'll explore the nexus of legal rulings, Capitol Hill policy-making, technical standards development, and technological innovation that creates -- and will recreate -- the networked world as we know it. Among the topics we'll touch on: intellectual property conflicts, technical architecture and innovation, the evolution of copyright, private vs. public interests in Net policy-making, lobbying and the law, and more.

Disclaimer: the opinions expressed in this weblog are those of the authors and not of their respective institutions.

What Does "Copyfight" Mean?

Copyfight, the Solo Years: April 2002-March 2004

a Typical Joe
Academic Copyright
Jack Balkin
John Perry Barlow
Blogbook IP
David Bollier
James Boyle
Robert Boynton
Brad Ideas
Ren Bucholz
Cabalamat: Digital Rights
Cinema Minima
Consensus @ Lawyerpoint
Copyfighter's Musings
Copyright Readings
CopyrightWatch Canada
Susan Crawford
Walt Crawford
Creative Commons
Cruelty to Analog
Culture Cat
Deep Links
Derivative Work
Julian Dibbell
Digital Copyright Canada
Displacement of Concepts
Downhill Battle
Exploded Library
Bret Fausett
Edward Felten - Freedom to Tinker
Edward Felten - Dashlog
Frank Field
Seth Finkelstein
Brian Flemming
Frankston, Reed
Free Culture
Free Range Librarian
Michael Froomkin
Michael Geist
Michael Geist's BNA News
Dan Gillmor
Mike Godwin
Joe Gratz
James Grimmelmann
Groklaw News
Matt Haughey
Erik J. Heels
Induce Act blog
Inter Alia
IP & Social Justice
IPac blog
Joi Ito
Jon Johansen
JD Lasica
Legal Theory Blog
Lenz Blog
Larry Lessig
Jessica Litman
James Love
Alex Macgillivray
Madisonian Theory
Maison Bisson
Kevin Marks
Tim Marman
Matt Rolls a Hoover
Mary Minow
Declan McCullagh
Eben Moglen
Dan Moniz
Danny O'Brien
Open Access
Open Codex
John Palfrey
Chris Palmer
Promote the Progress
PK News
PVR Blog
Eric Raymond
Joseph Reagle
Recording Industry vs. the People
Lisa Rein
Thomas Roessler
Seth Schoen
Doc Searls
Seb's Open Research
Shifted Librarian
Doug Simpson
Stay Free! Daily
Sarah Stirland
Swarthmore Coalition
Tech Law Advisor
Technology Liberation Front
Siva Vaidhyanathan
Vertical Hold
Kim Weatherall
David Weinberger
Matthew Yglesias

Timothy Armstrong
Bag and Baggage
Charles Bailey
Beltway Blogroll
Between Lawyers
Blawg Channel
Chief Blogging Officer
Drew Clark
Chris Cohen
Crooked Timber
Daily Whirl
Dead Parrots Society
Delaware Law Office
J. Bradford DeLong
Betsy Devine
Ben Edelman
Ernie the Attorney
How Appealing
Industry Standard
IP Democracy
IP Watch
Dennis Kennedy
Rick Klau
Wendy Koslow
Elizabeth L. Lawley
Jerry Lawson
Legal Reader
Likelihood of Confusion
Chris Locke
Derek Lowe
MIT Tech Review
Paper Chase
Frank Paynter
Scott Rosenberg
Scrivener's Error
Jeneane Sessum
Silent Lucidity
Smart Mobs
Trademark Blog
Eugene Volokh
Kevin Werbach

Berkman @ Harvard
Chilling Effects
CIS @ Stanford
Copyright Reform
Creative Commons
Global Internet Proj.
Info Commons
IP Justice
ISP @ Yale
NY for Fair Use
Open Content
Public Knowledge
Shidler Center @ UW
Tech Center @ GMU
U. Maine Tech Law Center
US Copyright Office
US Dept. of Justice
US Patent Office

In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline


« Dave Lowery is Still Mad At Pandora | Main | Copyright Law by V. Hart »

June 26, 2013

Pricing, Scalping, and Concert Business Models

Email This Entry

Posted by Alan Wexelblat

This isn't a core Copyfight story but I continue to be interested in business models.

Start with the classic economic understanding that most tickets to most live events are underpriced. Those of you, like me, who balk at paying 100 dollars and up for a concert probably think I've lost my mind, but bear with me. Theories of supply, demand, and markets say that if something is sold too cheaply someone will realize that and take advantage by buying at the lower price then turning around and re-selling the item at the higher price. In the live music business these people are called "scalpers". Depending on the jurisdiction and even the venue/concert rules scalping may be more or less legal. Sites like Stubhub don't make a big deal about this, but buried in their ToS is this language:

You agree to comply with all applicable local, state, federal and international laws, statutes and regulations regarding use of the Site and Services and the listing, selling, buying, and use of tickets and related passes. This includes, but is not limited to, laws pertaining to pricing your tickets.

That said, the trend nationally has been toward loosening laws on ticket reselling, even as scalpers have developed sophisticated strategies including automated bots and banks of humans to sweep up desirable tickets as soon as they appear. In economic terms, acts that price their tickets below "market" or below the most they could get, are leaving money on the table and the scalpers are picking that money up.

The problem with this isn't just economic, it's also cultural. Musical acts in particular thrive on having a wide and varied fan base, often grown by word of mouth and the connections that develop at live shows. If your friend tells you there's this great singer you have got to see, but your only way of getting in to hear her is to drop $250 for some scalped ticket you may be reluctant to do that. The artist loses out twice - once in that they aren't getting the extra money for that ticket and again when they lose the chance to attract a new fan.

NPR's Planet Money team spent some time with Kid Rock over his war on the scalpers. Kid Rock sings music designed to appeal to a blue-collar audience - exactly the kind of fan that would be shut out by tickets priced at whatever the market could bear. Yes, there are fans who will pay lots more for a Kid Rock show, but Kid Rock can't afford to cater just to them. Doing that would contradict the messages of his music, and frankly it offends his artistic sensibilities. As he says, he's in this business to make a lot of money but not to squeeze every possible dime out of every fan. So what to do?

In response to this situation, Kid Rock has deployed a variety of strategies. One is simply economic: he's flooding the supply side of the market. He'll do more shows and do shows in bigger venues in order to ensure that the supply of tickets is larger. That itself ought to drive down some prices but even then there are more and less desirable seats. The front seats always sell for more. Well, OK, if you pay for it, you ought to be the one picking it up. Using electronic ticketing, artists like Kid Rock (*) and their host venues can require people to show picture IDs and produce the credit cards used to secure the tickets. This effectively removes many of the routes ticket resellers use.

They can also deploy the same electronic tools that scalpers are using, but in reverse. Tickets for concerts can be priced more dynamically, somewhat like the way airline seats are priced. If certain nights aren't selling, the prices can be dropped. Shows in places or on nights that are likely to sell out can be pre-priced higher, but if sales are lagging the prices can be adjusted downward.

I think there are valuable lessons here. Live performance is a key part of many creative artists' business plans. Those performances need to bring in money AND grow the fan bases. They need to be sustainable AND meet the artists' aesthetics. Somewhere in the intersection of economics and culture lie answers and maybe Kid Rock has found one.

(*) I recently went to a show headlined by How To Destroy Angels, Trent Reznor's project/band with his wife. They offered seats to the NiN fan club using very similar terms. Our group had to enter together, show ID's, and couldn't use the "Will Call" facility at the club, in exchange for which we got the tickets at a discount off the general price.

Comments (0) + TrackBacks (0) | Category: Culture


Remember Me?


Email this entry to:

Your email address:

Message (optional):

Sherlock Holmes as Classical Fairytale
Trademark Law Includes False Endorsement
Kickstarter Math
IP Without Scarcity
Crash Patents
Why Create?
Facebook Admits it Might Have a Video Piracy Problem
A Natural Superfood, and Intellectual Property