Monday, June 15, 2009

Ticket Pricing in the Age of the Internet

Peter Tracey recently directed me to a column by Terrance Corcoran. Apparently, Industry Minister Tony Clement is looking into ways to address ticket retailers who are engaged in uncompetitive practices.

In Ottawa, Industry Minister Tony Clement declared himself to be a "regular concert goer," making him therefore qualified to take action against Ticketmaster and its associated resale arm, TicketsNow. "The government won't stand idly by when there is potential that companies may be engaged in uncompetitive practices that are hurting consumers," he said. Mr. Clement dispatched the Competition Bureau to investigate.

In Ontario, no slouch in maintaining high farm prices, Premier Dalton McGuinty is preparing legislation to protect Britney Spears consumers by going after Ticketmaster and setting up an apparently beefier anti-scalping law than the existing one. Ontario's Attorney General, Chris Bentley, said "What Ontarians want is fair access. This is about consumer protection." Various class-action lawyers and U. S. politicians are also getting into the concert pricing regulation business.

Even the performers are restless, with old boy lefties like Bruce Springsteen reportedly "furious" that tickets for his welfare-state priced concerts -- $90 to $250 -- were being sold at higher prices on the TicketsNow resale site before the regular sales process had run its course.

Corcoran argues that there is no need to regulate this market as the internet has taken over the position once held by scalpers, in doing so imposing some market discipline on ticket pricing.

Almost overnight, the buying and selling of tickets for sports, concerts, theatre and other live events has gone from the moribund paper era to the electronic era. The market took over scalping, bringing market prices to tickets that in the past were sold only once at what the concert promoters thought and hoped would be the right profit-maximizing price. If not, if the price was set too low, too bad. The market died with the first sale, except for a few scalped tickets at the door on the day of the event.

There is no need for politicians to attempt to control this market. In fact, that would be the worst approach. The rise of online market sales makes it possible for performers, promoters, ticket sellers and resellers to capture top market value. The major beneficiaries will be the performers, who for the first time will be able use auctions and other pricing mechanisms to get the most out of their performances.
I wonder if Tony Clement has thought about Trent Reznor's suggestions for stopping scalping.

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