“For more than seven years, the Red Sox have claimed that for every home game, the number of tickets sold and distributed has eclipsed the seating capacity of America’s Most Beloved Ballpark. But recently, the task of filling those seats has grown more difficult. Television ratings are down, and marketing campaigns have been revved up…” – Boston Globe

Read the full story: http://bit.ly/9TKyOh

Two idea’s:

1. Call Ace Tickets about one or two hours before the game and make an offer on tickets you are interested in, I like to start at 20% below face and work up from there. They are sales people, so hold your ground. It never hurts to ask if they have a pair in your fixed price range.

2. If you are buying from a street scalper, work in round numbers, e.g. $100 for a pair, $120 for a pair, etc. As I have noted before, approach politely, even a scalper can be charmed in this market!

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While Live Nations stock price tumbled, the panel got to the root of a key issue from the ticket resellers perspective and that is the issue of control. If a fan buys a paperless ticket, why can’t they sell it or gift it later? Why can’t someone in California buy a pair of tickets for a friend in Florida? Because Live Nation / Ticketmaster wants to keep those tickets out of the hands of resellers. Huh? wait. So inconvenience millions upon millions of fans because you want to control who can sell a ticket? Essentially, yes, though Ticketmaster usually veils the explanation. This discussion leads to the issue of ‘fans rights’ which is relatively new talking point in the ticket resale community.

For ticket resellers, fans rights are a convenient platform from which to argue that less control of tickets is better for the fan. This is of course because less control also means there are more opportunities for the secondary market. And that is really the point that this panel and industry leaders, including Chris Tsakalakis of StubHub wants to get across to consumers and industry players. Let the market run free and everyone can win.

A good question raised by the panel discussion is why can’t ticket resellers be viewed as just another distribution channel? What is the problem with presenting options to a diverse customer base? In recent years, major league sports have begun to partner with resellers (Ace Tickets and the Red Sox in Boston and StubHub partnering with the MLB, for example), so why can’t concert promoters and Ticketmaster do the same?

More to come from Ticket Summit 2010.

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In further illustrating this point, I asked my colleagues at SeatGeek to prepare two graphs charting average resale ticket prices for two John Mayer concerts from February of this year. The first show took place on February 24th in Boston – a town that has a huge college population and enough Mayer fans to create a lot of demand on both the primary and secondary market. The second show I picked was the first of two concerts Mayer performed at Madison Square Garden on February 25th. I chose this show because Madison Square Garden is a very popular venue and because the city has a vibrant resale market which significantly increases speculation (people buying for the explicit purpose of reselling tickets for a profit). So, everyone wants a ticket, supply is short and prices are high, right? Not really.

In the below charts (courtesy: SeatGeek.com), ticket prices are represented by blue and red lines. The blue line is average resale ticket price over time without any controls on price. In both cases, average price starts at about $120 per ticket ($20-30 above face value including fee’s) and proceeds on a roller coaster ride with a nice crash in the last five to seven days. I often recommend buying resold tickets in this time frame because the crash consistently seems to occur in the five to seven days leading up to a show. I will propose why this is the case in a moment.

The red line is average ticket price excluding tickets sold for more than $120. I control for price to rid the analysis of highly priced tickets (usually the best) that tend to skew the average price which helps us see a more consistent average price. Some people are willing to drop $500 for a pair of front row tickets at anytime and those ticket resales skew average prices upward.

Notice the bump in average price in the five days leading up to the shows? That is you and your friends realizing a week before that they don’t have a ticket and they are all running to the resellers for tickets – but this does not have to be you! If you are looking for values, be brave and wait out the storm. I specifically suggest looking for resold tickets on the 3rd or 4th day leading up to an event. Referring to my article titled SOLD OUT?! Three Strategies for Getting Tickets, I would concurrently pursue strategy 1 and 2 on these days until I found the tickets I wanted. For example, I bought two tickets for the February 24th Mayer show for $92 each from TicketMaster the day before the show. As the chart illustrates, average prices were at or below $90 on that day, so the resale market was no better or worse than the primary market. Strategy 1 just happened to work for me so I did not have to revert to a reseller – however I did have to wait quite patiently.

For those who want a little more information on why prices tend to drop in the final days leading up to the show, I have three proposals.

1. Resellers want to get ticket out of their inventory before they have to sell them to street scalpers or otherwise toss them out, so they price to sell.
2. People like you and I bought too many tickets for friends who don’t show and we are now selling them at face value on eBay and Craigslist, which arbitrages the higher prices that resellers seek.
3. The combination of one and two creates enough supply to support the demand wildly high prices are not supported.

TicketMaster would like to think that they are participating in the arbitrage by selling tickets at the last minute, but I think the number of people who know to look on the primary sellers website is not sufficient to have an influence, but it is nice for those in the know!

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Here is the skinny; a concert can “SELL OUT” at the box office, but a concert is rarely permanently sold out. To friends and readers a like, below are three solid strategies for getting tickets to Lady Gaga and other concerts coming to your town this summer. Caveat: acquiring highly desired items is not supposed to be easy, diligent effort is required. In following this advice you will need to try each method (especially 1 & 2) more than once until you are successful.

Strategy 1: Visit the primary sellers website (TicketMaster, etc) on Tuesday, Thursday and Friday mornings between 9:45 and 11am in the two weeks leading up to the show you want to see – I like trying to find tickets at 10 and 10:30am, which is when they release previously held back tickets. I have snagged great tickets this way for everything from Coldplay to Pearl Jam.

Strategy 2: Scour seatgeek.com and fansnap.com in the ten days leading up to the show of your choice up until 72 hours before. Both sites scour different reseller ticket sources and allow you to search by price, which eases the search process. Ignore tickets that are out of your price range and don’t let high prices scare you – in some cases brokers price tickets higher as a defensive strategy against arbitrage. If you don’t see a price you like, wait. Pointers: I like SeatGeeks buy/wait recommendations but I can’t speak to their accuracy, while FanSnap gets direct ticket inventory feeds from a larger pool of resellers.

Strategy 3: On the day of the concert with no tickets in hand, go the the venue 2 or 3 hours before showtime and stroll the tailgates looking for extras. This is probably best done by an extrovert, but the idea is you surf the barbecue and beer parties making friends and asking if anyone has an extra ticket. Scalpers utilize the strategy all the time and they usually try to buy tickets for below face value. Most people are very happy to sell tickets for the price they paid, less fees.

If you follow through on each one of these strategies I can almost assure you will find a pair of tickets at or near face value. Now, if you need evidence to support the suggestion that prices will be favorable in the few days leading up to the concert, see Resale Prices: What Goes Up…

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Despite the expected benefits of a free market in New York, legitimate issues persist. A report recently presented to the Governor & Legislature of New York State sought to evaluate these issues in considerable depth. The report offers some background on ticket resale issues in New York and answers some specific questions placed before the Department of State. Though it raises valid and highly relevant points, its conclusions are seriously flawed. The most concerning is the absence of valid data used to reach conclusions about primary and secondary market ticket sales activity.

The report, which was commissioned by the New York State Department of State, initially claims that ”[T]he Department conducted a comprehensive analysis of ticket prices and their availability for popular events on both the primary and secondary markets”. Based on that statement, I expected the report to contain an empirical study of primary and secondary market ticket sales. However, three paragraphs later, the report states that “These recommendations are the product of an analysis that was hampered by the Department’s inability to compel any segment of the industry to produce valuable ticket sales and availability information on either the primary or secondary markets.” Notwithstanding that these two statements conflict with one another, how does one make any empirical claims about primary or secondary market ticket sales activity without data?

In defense of the State Department, I know first hand that some ticket sellers are unwilling to share market data for any reason. However, the claim that no one would cooperate did not make sense. In my own experience, StubHub, one of the leading ticket resale market places, has always been willing to provide data to valid research efforts. In checking the Departments claim, I asked StubHub if the New York Department of State had approached them for data. A representative for StubHub confirmed that the Department of State met with them in December of 2009, but according to Joellen Ferrer, a spokesperson for StubHub, “We were not approached by the [Department] for data”.

So, what data did the Department use to support the key findings of the report? Turns out the data were gathered by browsing select ticket prices posted on primary and secondary market ticket seller websites. This may sound like an acceptable method for gathering ticket price and sale data, but it is actually open to a great degree of error. The reason is that ‘offer price’ and ‘sold price’ are not always the same. Sometimes ticket resellers will offer a ticket for $500 that is simultanously being offered somewhere else for less. In other cases, someone may call the reseller and pay $400 by negotiating. Clearly, there is no way to know what tickets sell for or how many are for sale without having the transactional data. Therefore, claims such as  ”[T]he Department failed to establish any causal connection between the existence of price caps and the availability and cost of tickets on the primary and secondary market” cannot be supported by research that is not based on actual transactional activity.

The lackluster manner in which this report was prepared is unfortunate for two reasons. First, New York is an exceptional case for ticket sales and there is a legitimate need to empirically evaluate and address unique market conditions. If those issues are going to be properly addressed, the solutions need to be based on facts and not casual observations. Second, the quality of this report pales in comparison to one that was produced ten years ago by the Department of Law titled, Why Can’t I Get Tickets?, which is one of the best in-depth analysis of ticket scalping produced by a state office.  The Department of State should look to that report as an example on how to approach this difficult issue and make a more substantial effort in doing their homework.

In a future writing, I will highlight some of the relevant issues raised by this report and propose how the state should approach the issues.

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Look like an admission to me: Wiseguys lawyer, Mark Rush, stated that ”Wiseguys were simply businessmen who came up with technology that essentially allowed them to get to the head of the digital line for Internet tickets, much like fans who used to camp out overnight to be first in line to buy tickets at the box office.” That statement brazenly glosses over the ‘access policies‘ enforced by primary market ticket sellers and Federal laws that prohibit hacking private computer networks – which include ticket sellers websites.

The Good: It is about time the FBI took a serious and public stand against those who use ‘bots’ to illegally obtain event tickets. The practice is boldly and openly practiced with seemingly little enforcement action. Showing some creativity, the fed’s allegations focus on fraudulent and illegal access to private computer networks in an effort to obtain event tickets. They approach the case in this way because there is no federal law against buying tickets with the intent to resell them, or ticket scalping as a practice, though there are some state laws. Hopefully for the consumer enforcement action to this end with increase.

The Bad: News of this case is a setback for ticket resellers who seek to shed the ‘scalper’ image of the past. Ticket resellers should be speaking out against this illegal and unfair practice.  This kind of news does not help advance a positive image of the industry and only angers fans who are unfairly denied access to event tickets.

It will be interesting to see how Ticketmaster/Live Nation address this issue. Seems to me that they could spend millions trying to sue those who hack their sites, but if I were them, I would be hiring some technical talent capable of plugging the security holes exposed by this case.

Federal Indictment on Wired.com

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This question is a bit tricky. The best time to buy a ticket from a scalper at any event – regardless of the kind of event – is dependent of a few variables. Each variable has some unique advantages and challenges.

1. Event location: if one is in Boston, you have the likelihood of more resold ticket availability and therefore the opportunity for more leftovers after the event begins. If you are in a smaller city like Tulsa or Reno there may be a lower quantity of resold tickets to choose from. If I am in Boston looking for tickets to a Bruins or Celtics game, I can be sure there will be some tickets to choose from after game time and that the scalpers will want to sell tickets at enticing prices. In Tulsa the demand for resold tickets could be lower and therefore the number of tickets available for a game post-start are going to be less. What this really comes down to is scalpers are in business and they like to have a product to sell for every event they can. In Boston, there are more scalpers and therefore the potential for more inventory. Tulsa, less so.

2. Team rank: team ranking effects both price and availability. If the Sharks play Dallas in San Jose, expect more options after face-off. Visa-versa, less options. Of course, there may be a lot of devoted sports fans in Dallas, that could drive availability.

Other variables to consider are weather, early in season, and late in season games. Sometimes the masses decide to go to a game because it is a great day for a game and sometimes the wild card is at stake.

I could not profess to know the dynamics of every market – I don’t. What I do know is if you try to buy for a game that is less important to you, you will gain an understanding of how to buy when it matters. I once bought tickets for a Cubs game on the street; there were plenty of seats options during the first inning at fair prices below face value. I then went to a White Sox game and found a small quantity of grandstand tickets for $15 and a few really good tickets for $80 in the second inning. $80 is not a good deal for White Sox tickets!

Elie – your specific question was about Toronto. Canada loves its hockey teams. If you are shopping in Toronto, I would suppose the best values are ten minutes before to ten minutes after because scalpers snap up those tickets in droves. If they play away, take into account who they are playing.

Now that fansnap.com and seatgeek.com are in full swing, I would advise buyers to check both of these sites to check availability and price 24 hours before the game. The more tickets and price options you see, the better chances you have of getting a deal after face-off/tip-off, etc. The less options… well, you get the idea.

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As the LA Times reported, SeatGeek was selected to appear at the TechCrunch 50 in San Francisco earlier this week. In the Times article, Co-founder Jack Groetzinger is quoted as saying, ”We have an algorithm that can forecast ticket prices.” Indeed, the casual consumer is often baffled by secondary market ticket prices making forecasting is interesting proposition. The challenge is that most of the academic research I have performed or read indicates that resold ticket prices usually go down following the on-sale date. Though this is mostly true for concert tickets, I have seen these price patterns occur with sporting event tickets, too. However, sporting events can be subject to price fluctuations driven by unique influences such as weather and rankings,  so that is likely where there is a value in forecasting. As cool as the forecasting piece could be down the road, I don’t agree that SeatGeek is (right now) as impressive as its competitor, FanSnap.

FanSnap walks around the forecasting question and gets to the point. If one is on the site, they are on the market for a resold ticket; what are the options? Unlike SeatGeek, which only lists section and ticket price data before linking to the resellers site, FanSnap has a really well done user interface that allows one to easily locate tickets on a high-resolution seat map with pop-ups that indicate price and number of available tickets. FanSnap also seems to have a pretty large pool of ticket resale partners providing data to them which provides prospective buyers with more price variety. They key to getting the best deal on a resold ticket is knowing all the price options, not just a portion.

While SeatGeek has potential, it has a ways to go. Regardless, these two ticket resale plays are proof that the ticket search / aggregation battle is on – good news for the price conscious consumer.

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A good example of incomplete reporting is John Seabrook’s piece in the August New Yorker titled, The Price of the Ticket. The crux of this book-report-style review is that the ‘live music business is broken’ and he uses the infamous February 2009 Bruce Springsteen ticket debacle as a vignette to support this claim. While the article offers a useful and unique report on the evolution of the concert promoting business, it fails to fully explain ticket scalping and does not even come close to explaining the mess that is ticket pricing and distribution. In addition, the artice fails to examine why Bruce Springsteen and other artists who claim to be irate about scalping don’t use their star power to productively address the issue instead of writing angry letters or blogs posts about it.

At the outset Seabrook claims that “Almost everyone agrees that the business of live music… is dysfunctional.” This claim is poorly supported and is also untrue. Going by the numbers, Ticketmasters ticketing revenue from 1998 to 2008 grew ten-fold (Rolling Stone, July 9, p.28), and as Seabrook points out himself, live music is actually saving the business of music by providing a strong source of revenue to artists as the rise of the digital music (and piracy) has reduced record sales revenue. Following ticket sales, many acts young and old, are raking in huge revenues every year. Seabrook reports that “forty-percent of all Live Nation seats go unsold…” what he does not report is the reason for that has more to do with ticket mis-pricing and acts like Jessica Simpson being staged in venues that are too large for a limited following.

Seabrook also states that “Both Live Nation and Ticketmaster are loathed by fans…” a claim that is true, but not because the live music business is dysfunctional. In fact, what is dsyfunctional is concert ticketing – and that is the exact reason why fans have little love for Live Nation and Ticketmaster. Seabrook points out that billions of dollars in ticketing revenue are lost to the secondary market without providing a single explanation for this very important observation.

While it is unclear if the secondary market is a $2 billion or a $25 billion business, one thing is for sure, that the size of resale profits is absolute evidence that Live Nation and Ticketmaster cannot effectively sell tickets. It is a wonder how Seabrook could write an article called ‘The Price of the Ticket’ and not want to find out why artists like Bruce Springsteen and Trent Reznor (who both despise scalping) do not depart from letter writing and blogging and take an activist role in addressing issues that have a huge impact on ticket pricing.

For example, as Seabrook points out in his article, Springsteen’s own management team kept 2,262 of the best seats out of the public sale for his May 21, 2009 show, leaving only 108 available. This common practice constrained supply and put a huge price premium on the 108 tickets put up for sale – making them prime targets for secondary market speculation. If Springsteen hates scalpers, why would he stand for under-supplying the market and feeding resale demand? We never get a clear answer other than that his management needed to hold back tickets for potential VIP’s. It is inconsistent to claim your concerts are intended for regular people and that tickets should be equal access and then hold back the best seats for celebrities who can well afford their own tickets.

Finally, Seabrook claims that “ticket scholarship is a neglected field.” To the contrary. there are a good number of scholarly papers on ticket resale, including a small sample posted on this blog. While there are few dedicated ticket scholars, the topic has been widely covered for over ten years. It is true that there are not many studies that examine actual pricing and resale, but this is because Ticketmaster and Live Nation generally refuse to support resale scholarship (though they have done so in two limited cases). [And, Seabrook, if you happen to read this, Kruger's 'Rockanomics' paper studies primary ticket markets and its tiny reference to resale is not empirical. The Sorensen/Leslie paper is the most current and complete analysis of both primary and secondary ticket sales.]

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First, if you prefer to buy from Ticketmaster or Live Nation and do not see the seats you want onsale right away, return to the site seven to ten days before the show and you may find a decent pair of tickets at face value, plus the ridiculous fee’s. You may have to come back to the site a couple of times as ticket inventory can change daily, sometimes hourly. For example, on August 5th at 5pm I bought a 7th row ticket at face value from Live Nation for the August 6th Coldplay Show in Raleigh, NC (here is some video I snapped). That same ticket was not available at 3pm. I paid $126 (fee’s included for my seat) and the guy I sat next to had paid StubHub $170 for each of his four seats bought two months before.

Second, if you are a bargain hunter or last minute planner, the secondary ticket market is a good place to look for last minute deals. If you are buying online from a reseller like StubHub, TicketNetwork or RazorGator, I strongly recommend buying at least two days before so you can be sure to get the tickets overnighted. But if that is not enough last minute for your style, you can always just show up to the venue an hour or two before showtime and go hunting. The best way to find deals on tickets at the event is by strolling the tailgate parties and asking or looking for people who have extra’s. At the Coldplay show I mentioned earlier, I saw at least two dozen tickets on sale for anything from face value (without the fee’s) down to 50% off. People really worry they will be stuck with an unwanted ticket so there is always room for negotiation.

Finally, there is a really cool site I recently found called fansnap.com. The site scours ticket resale sites and organizes available inventory by price and seat location. It is super easy to use and free. I’m actually pretty bummed because they beat me to getting the idea launched, but hey, they did it so kudos to them.

As the secondary ticket resale market continues to grow, I am pretty confident that stories of $10 and $20 tickets will become more common. They are hard to come by, but they happen. So, as Mr. Miyagi says, “patience Daniel-son, patience.”

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