Schumer Tries To Force Scalpers To Register; Limit How They Buy And Sell Tickets

from the is-this-needed? dept

Tue, Apr 7th 2009 6:20am — Mike Masnick

There's been plenty of complaining about how ticket scalpers for various concerts and sporting events have been scooping up all of the tickets for events and making it more expensive for fans to get those tickets. Of course, in many cases, companies like TicketMaster and the musicians themselves are in on the deal, pretending to offer "scalped" tickets that they're really selling themselves. With so much talk about this issue, you knew it was only a matter of time until some grandstanding politician got involved. In this case, it's New York's Chuck Schumer, who has introduced new legislation to try to limit ticket reselling (thanks to Eric Goldman for sending this over). It will require ticket resellers to "register" with the FTC, and then such official resellers will only be allowed to get tickets two days after the tickets go on sale.

It's difficult to see what good this does, other than create a bigger bureaucratic mess. If you don't think that the ticket resellers will figure out workarounds, you haven't been paying much attention over the past few years. Besides, the very fact that Ticketmaster thinks this is a good law is a pretty damning sign that it's not doing much to solve the problem, but is really designed to help Ticketmaster make more money.

It's still difficult to see why these issues can't be solved effectively without legislation. Bands can offer early tickets through fan clubs or mailing lists, or use other tools to make sure fans get tickets at lower prices. Besides, if the demand really is that high for certain tickets, what's wrong with letting the market determine that?

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Filed Under: bureaucracy, chuck shumer, registering, reselling, scalping, tickets
Companies: ticketmaster

49 Comments

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Ima Fish, 7 Apr 2009 @ 6:41am

This whole scalper "problem" could be solved quite simply: sell tickets at market value, not massively below market value. Tickets are sold below market value because the artists don't want to be seen as greedy. However, this leads to the creation of a secondary market to fill that void.

Of course some will argue that a system should be set up so only fans could be able to buy the tickets first, but what's stopping a scalper from becoming a fan, getting the under-priced ticket, and selling them at a much higher market price? If there's a way to make money, someone will figure out a way to do it.

We accept that we cannot all afford to buy mansions, solid gold suits, and sports cars. In the same way we have to realize that not all of us can afford Bruce Springsteen tickets. That's not unfair, it's just simple economics.
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Weird Harold, 7 Apr 2009 @ 6:42am

Resellers are already using fake names or front men to join fanclub sites to pre-buy tickets, in the same manner that they have abused other "front of the line" programs in the past. The same people they pay to stand in line and buy "4 tickets maximum per person" will be paid to stand online and buy the 4 ticekts or get the fan club pre-buy tickets, which will in turn be resold anyway.

Taking it online just makes it even easier for the resellers to get their tickets.
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Valkor, 7 Apr 2009 @ 6:47am

Supply and Demand
If bands are worried about their fans getting ripped off, there's an easy way to reduce the price: do more shows. Increase supply, and you have affordable prices. Of course, that would mean that even rock stars would have to work every day.
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Booger, 7 Apr 2009 @ 6:59am

Re: Supply and Demand
Haha, heaven forbid! Ain't that right Harold? Where are you at on this one? Rock stars should be able to rake in tens to hundreds of millions of dollars and only work a few weeks a year. If they couldn't, why would they make music? Image them having to work 5 days a week, 50 weeks a year, for forty years at something they enjoy doing so they can retire with some security... they'd only be ahead of most of us.
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Tgeigs, 7 Apr 2009 @ 7:06am

Unbelievable
Scalpers are one of those "service providers" that charge a fee w/o providing ANY service whatsoever. They simply use their tactics to get in line first, horde the tix, and then sell them at a profit to the very same people who were waiting behind them in the same line.

The funny part is, the only group of leechers that MIGHT be bigger than the scalpers? Politicians! So now ubertard Schumer is going to fly in and save the day? Watch how quickly this all goes to hell...
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Zaven, 7 Apr 2009 @ 7:08am

OR, how bout we just enforce the existing ticket scalping laws. Stop promoting scalping. Why is it legal to scalp online, but not right in front of the event?
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Weird Harold, 7 Apr 2009 @ 7:13am

Re: Re: Supply and Demand
In the end, it isn't a problem. Most bands will likely end up with only a couple of hundred "fans" in each city (due to lack of exposure on radio and television, soon to be buggy whip businesses I am told), so scalping will no longer be an issue.

In all seriousness, if bands had the balls to price their tickets to what the richest fans could afford, they would eliminate scalping altogether. "Real fans" would pay the $1000 for the first 3 or 4 rows, and -$10 for each row back from there. Rafter seats would be $10, but that would only be for non-fans.

After all, if you can't bleed money all over your favorite band, you really aren't a fan.
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Vincent Clement, 7 Apr 2009 @ 7:32am

Re: Unbelievable
You argue that scalpers provide no service whatever and then go on to state what scalpers do to get the tickets. The service part of their job is how they get the tickets. Seems some people value not having to wait in line or waiting for 10:00 AM to come around for online sales to get the 'best' tickets.
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Lance, 7 Apr 2009 @ 7:34am

False capitalism
"Besides, if the demand really is that high for certain tickets, what's wrong with letting the market determine that?"

I work for a company that owns a ticket brokerage and I see the problems. The main problem is that traditional free market supply curve factors in scarcity of a good. Since tickets have a finite scarcity they are unlike most goods which are produced more or less constantly. If I'm a ticket broker or work in concert with other ticket brokers to purchase all remaining seats in a show I have exhausted supply. I can therefore charge, in some cases, 400% premiums on prices without having to sell all of my inventory to make a profit. By making even the least desirable seats unavailable I can artificially increase demand on the premium seats. I will probably charge well above market on the cheap seats actually to make my premium seats look more attractive and as the show nears and I've liquidated a good part of my inventory, then maybe I'll drop prices to reflect my inflated market value in hopes of selling all of my inventory.

Ticket brokering is not capitalism. They are a reseller that adds no value to the product.

The problem of Artists not selling tickets at what would be market value is a completely separate issue.
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Vincent Clement, 7 Apr 2009 @ 7:39am

Re:
Or we could just eliminate scalping laws all together. Scalping exists because tickets are a limited commodity and because good seats are an even more limited commodity. Demand exceeds supply which increases the value of tickets. Non-fans don't pay $1,000 for tickets. Fans do.

If fans are willing to pay that much, musicians should sell tickets via an auction.

We don't have laws that prohibits stamp collectors from selling stamps at greater than face value? We don't have laws that prohibits art collectors from selling a painting or sculpture for more than they paid? Why should concert tickets receive special treatment?
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Ima Fish, 7 Apr 2009 @ 7:46am

Re:
"Why is it legal to scalp online, but not right in front of the event?"

Why should it be illegal to sell what you legally bought?! You want to make it illegal to sell tickets. What if General Motors and Ford wanted it illegal to resell cars, as the used car market is killing the new car market? What if the apparel industry wanted to make it illegal to sell your used clothes, for the same reason?

Instead of creating laws that hinder our rights to sell what we buy, why not simply let the market sort it out. If someone wants to pay a $1000 to see a concert, let them! Problem solved.
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C.T., 7 Apr 2009 @ 7:51am

In my opinion the only way to vitiate the secondary ticket market is for artists to price their tickets closer to the tickets' actual market value. However, most people would have a viscerally negative reaction to this.
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Lance, 7 Apr 2009 @ 7:58am

Re: Vincent
"We don't have laws that prohibits stamp collectors from selling stamps at greater than face value? We don't have laws that prohibits art collectors from selling a painting or sculpture for more than they paid? Why should concert tickets receive special treatment?"

You are comparing apples to oranges. Works of art, stamps, and other collectibles will retain or increase in value over time. They are not exhausted once sold and 'used'. Past the date of the event, tickets have no inherent value. Thus, they have a different element of scarcity.

I think the auction format is good idea, but would be difficult to execute. One thought to prevent ticket re-selling would be that all tickets purchased within 48 hours of them going on sale have to be picked up at will call by the card holder on the day of the event. It's an inconvenience so it will never fly.
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Frosty840, 7 Apr 2009 @ 7:59am

Re: Re: Re: Supply and Demand
I can see something like that working... Obviously not exactly like that, because your suggestion is obviously tongue-in-cheek; but if one were to set up a site which basically says "okay, there are X number of seats in the venue, place your bids, and the X highest bidders get seats, highest bidders at the front, and if you don't put up enough money, you don't get in".

I suggest that's a pretty fair way of going about it. Most people would pay around the same amount of money, with the front-row seats consistently going to the "I want to give the band money and I choose front-row seating as my goods-for-services medium" crowd. Pricing among the back rows would likely be a bit inconsistent across the length of the tour, but would probably even out.

And if huge numbers of people are consistently getting in for free, that probably indicates the band is booking wrong-sized venues, rather than a flaw in the system. Still, those free-riders would (in theory) get a "better" experience from seeing th band at a more-full venue and might be motivated to spend more money in future.

Sounds good to me.
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DS, 7 Apr 2009 @ 8:01am

Re: Re:
The problem comes into play when the first seller of goods is restricting the market so they can also be a 'secondary' seller.

But even then, I'd still rather see a band I kinda like free, then pay through the nose for a band that I really like. Unless I get a BJ afterwards, $100+ is way too much for an evening of entertainment.
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Coach George (profile), 7 Apr 2009 @ 8:02am

My $.02
1-Don't go to the concerts!
2-Sell only at the box office
3-restrict to only 2 tickets per sale.
4-Do not sell early to fans. If tickets go on sale at 12:00 midnight, that is when they go on sale. In conjunction, sell at face value and make it illegal to add "additional fees". Build the fees into the face value of the ticket. Shut down websites that violate this policy and arrest on site scalpers.
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Vincent Clement, 7 Apr 2009 @ 8:21am

Re: False capitalism
Ugh.

Something being "produced more or less constantly" does not imply that that good is infinite or not as scarce. If that were true, then I shouldn't be paying $20 for big bottle of Tide Ultra x2 detergent.

Since you are on the supply-side, you can't "artificially increase demand". You can only change the supply and/or the price. If there were 100 people demanding tickets before you bought 100 tickets, there will still be 100 people demanding tickets after you bought them.

The same goes for any demand for premium seats. If 20 of those 100 people were willing to pay a premium for great seats before tickets went on sale, then, all things being equal, those 20 people will likely pay a scalper for great seats.

I don't see the remaining 80 people changing their mind because cheap seats are unavailable. A few may, but most people have already made up their mind before tickets go on sale as to what lengths they are willing to go for tickets in general and great seats specifically.

Ticket brokering is capitalism. I have a scarce good in a market where demand exceeds supply. I have an excellent opportunity to maximize my rate of return. Sounds like capitalism to me.

The value is added mostly by the buyer (it's called 'demand'). The reseller adds some value in that I don't have to wait in line or I don't have to compete with thousands of people online. The reseller has done that.

The problem of artists not selling tickets at a market clearing price is completely related to scalping. Ticket auctions will not eliminate scalping, but they will greatly reduce it.
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James, 7 Apr 2009 @ 8:25am

Worthless
Scalpers are only a small step away from spammers; both should be shot.

Personally when I search for tickets on Craiglist, I flag the scalper's ads ;)
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Lawrence Welk, 7 Apr 2009 @ 8:25am

Re: My $.02
Hey coach, get into the real world.

Your only valid suggestion is #1 - if the sheep that are willing to pony up the exorbitant upcharges on tickets just didn't do that, the scalpers would begin to disappear. The chances of that happening are about the same as Usama Bin Laden showing up at the White House to surrender.

Box office sales can create traffic and other logistics problems for local law enforcement. Same with selling early. Trying to sell tickets all at once would be a logistical nightmare.

Want a real solution? Eliminate all online and in person sales and use the postal service only. Put all the envelope orders in a drum and draw them like a lottery. That will go a long way to ending the hold scalpers have on ticket sales.

Or, just don't go to concerts!!
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C.T., 7 Apr 2009 @ 8:26am

One solution I have thought of is to use a tiered ticket pricing system. Tickets should be sold at an artificially high price the day they go on sale...and then reduced in price each week as the show gets closer. For example -- tickets could start at $500 when they first go on sale...each week for the next 3-4 weeks the price could drop by $100 increments. Once the price is down to $100, you could start reducing the price in smaller increments.
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TheStuipdOne, 7 Apr 2009 @ 8:26am

Well if you buy online
you use a credit card

if you use a credit card then they can connect all the tickets purchased with that credit card. Those tickets must all be used within 15 minutes of the first ticket being scanned. Include some allowances for if it for some reason takes longer than 15 minutes for a large family to get through ... maybe rescan the first ticket.

This would dramatically increase the risk of buying a scalped ticket and would therefore drive the price of those scalped tickets down. This decreases the profits of the scalpers. Once people start to get burned by tickets not being valid the market for scalped tickets will dry up.

Other solutions include auction style pricing, not preselling tickets at all (pay at the door), more concerts in a particular city ... come into town and perform every other night for a week
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mike42 (profile), 7 Apr 2009 @ 8:44am

You all missed the point...
When a scalper buys a $100 ticket and sells it for $300, he has made a $200 profit, or 200% on his investment. How much does the government get? Whatever tax has been already paid on the $100 ticket. And since scalping is illegal, they will not declare the cash. The state wants it's cut, plain and simple. The two-day wait is obviously a deal made to get TicketMaster's support.

If they want to cause as much pain to the scalpers as possible, either have assigned seating where they check ids, or add a "deposit" which is refunded at the gate the night of the concert. The "deposit" would make it difficult for a scalper to buy out a significant number of seats, and he/she would only buy the number of tickets that he/she could safely sell, as their price had effectively doubled, compared to the fan that actually went to the concert.

I find the "deposit" particularly attractive, because then you know the fan has the cash to buy merchandise.

But, in any case, this would be much better handled by the ticket retailer.
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Brian, 7 Apr 2009 @ 9:07am

Rob street scalpers. what are they gonna do? Call the cops?
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Paul Brinker, 7 Apr 2009 @ 9:18am

Its vary simple to get rid of the problem.

PUT NAMES ON THE TICKETS.

cant do that?

put the ticket buyer name on the ticket, if your not with the buyer, you dont get in. Its vary easy to pay someone to stand in line, its not so easy to pay someone to go to the show with 3 strangers.

Other simple ways include:

Tickets are issued at the gate to the credit card who bought the ticket.

Tickets are ONLY issued at the gate as you go in. (this would allow the possability of selling no shows)

As you can tell I dont ever pay the Scalping tax, Last time I was in New York I went to a Broadway show and the show used Names, CC numbers and gave me the ticket from the window (about 30 min before the show)
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Anonymous Coward, 7 Apr 2009 @ 9:19am

Re: False capitalism (#9)
"a reseller that adds no value to the product"

... and this statement comes right after you detail how you add value to the premium seats. Duh!

I find it amusing that you refer to yourself as a "ticket broker" rather than a scalper. You're both doing the same thing, only the scale differs.
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Travis, 7 Apr 2009 @ 9:26am

The price of tickets have been increasing year over year! This is all due to you file sharing thieves. I don't enjoy paying $200 for a ticket because you criminals wanted some musics on your ipods!
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Anonymous Coward, 7 Apr 2009 @ 9:39am

Re:
One more possibility...

Don't sell 1 physical ticket for each seat. If somebody needs 10 tickets, issue only 1 physical ticket stating "Admit 10"

this, to some extent, could discourage those buying tickets with the sole intention of re-selling them...
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C.T., 7 Apr 2009 @ 9:40am

"The price of tickets have been increasing year over year! This is all due to you file sharing thieves. I don't enjoy paying $200 for a ticket because you criminals wanted some musics on your ipods!"

The murder rate goes up in the summer...as does the consumption of ice cream. I don't like hearing about all of these murders just so selfish people can indulge in ice cream!
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David, 7 Apr 2009 @ 9:55am

Re: What about allowing tickets to only be sold at face value?
If every state had laws that tickets could only be sold at face value scalpers would be eliminated also. The artist could set the price at any market value and tickets could be sold at less than face value but not above.
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Vincent Clement, 7 Apr 2009 @ 10:05am

Re: Re: Vincent
I'm not paying $1000 for a ticket. I'm paying $1000 to experience an event. That experience may last with me for a lifetime.

Not all art retains or increases in value.

I see no difficulty in an auction.
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toddlorensinclair, 7 Apr 2009 @ 10:08am

SCALPING TICKETS IS DISHONEST
It should be illegal to sell tickets for anything above face value ... PERIOD!
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Vincent Clement, 7 Apr 2009 @ 10:09am

Re:
Given the healthy and vibrant secondary ticket market, many people don't have a negative reaction to paying a premium.
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C.T., 7 Apr 2009 @ 10:15am

"It should be illegal to sell tickets for anything above face value ... PERIOD!"

Why? Should it be illegal to resell other forms of property for more than the original price? I'm not sure I see a meaningful distinction between concert tickets and other property such as land, stocks, art...
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Vincent Clement, 7 Apr 2009 @ 10:15am

Re: SCALPING TICKETS IS DISHONEST
Why should it be illegal? The concert promoter, the concert venue and the artist have all received their cut. Everyone has been paid. Where exactly is the dishonesty? Don't blame the scalper for dealing with the realities of supply and demand.
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Vincent Clement, 7 Apr 2009 @ 10:25am

Re:
There is no distinction.

Certain people want restrictions on the secondary ticket market in order to purchase tickets at prices well below what the market will bear, especially for premium seats. They want $1,000 front row seats for $100 (or less).
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Vincent Clement, 7 Apr 2009 @ 10:29am

Re: Re: Re: Supply and Demand
You wouldn't eliminate scalping altogether. You would severely hamper it. So long as demand exceeds supply, you will have a secondary ticket market, even if you set ticket prices at the highest market-clearing price. It's just that the scalpers will likely not earn as much.
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Anonymous Coward, 7 Apr 2009 @ 10:38am

Re: Re: Supply and Demand
You clearly do not understand the stress it takes to tour. There are artists who toured the way you suggest and end up with health issues and burnout. Travelling from town-to-town, always on the road, is draining. I would like to see YOU do it.
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Anonymous Coward, 7 Apr 2009 @ 10:40am

Re:
Ima:

You are SOOOO funny. Hell, I am unable to go to any rock concerts now because paying $150, $170 or more for a pair of tickets is just freaking outrageous. Yes, there are music stars getting quite wealthy at those prices (as opposed to the recording houses), but for an average fan, unaffordable.
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Anonymous Coward, 7 Apr 2009 @ 10:44am

Re:
Tgeigs:

You are so right. We keep hearing about monopoly pricing, and yet, where are the complaints about scalpers, who wait for tickets to become available and then suck them all up because working people are unable to be at the window when they go on sale? Oh, yeah, they are providing a valuable service by making sure that the average person does not get a ticket, but people who have that kind of money at their disposal buy the tickets. So much discussion about redistribution of wealth and yet where is the outrage regarding scalpers?
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Anonymous Coward, 7 Apr 2009 @ 10:46am

Re: Re:
Vincent:

You missed one adjective. True, non-fans don't pay $1,000 for tickets, wealthy fans do.
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Anonymous Coward, 7 Apr 2009 @ 10:51am

Re: Re: False capitalism
I don't see the remaining 80 people changing their mind because cheap seats are unavailable. A few may, but most people have already made up their mind before tickets go on sale as to what lengths they are willing to go for tickets in general and great seats specifically.

I have had this discussion with friends numerous times regarding concerts in Chicago, St. Louis and Indianapolis. We talk about going, get ready for tickets to go on sale, and then find out that the CHEAP tickets are $95 for nosebleed seats behind a pillar. The GOOD seats, which are quickly sucked up by scalpers, are going for $135 to $175. Of course, you can always get these same seats from scalpers at $250 or more each. Suddenly everyone changes their mind about going.
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Vincent Clement, 7 Apr 2009 @ 10:53am

Re: Re: Re:
The level of wealth is irrelevant. They are still fans.

If an artist wants to play role of a socialist, there are several alternatives available - many of them have been listed in this discussion - to ensure that "non-wealthy" fans can not only go to the show, but that they can get great seats.

Then again, I think some people wouldn't mind it wealthy fans paid $1,000 if that meant crappy seats cost $10 or $25.
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Anonymous Coward, 7 Apr 2009 @ 10:54am

Re:
Actually, Travis may well have a point. More well-known artists are touring as their primary source of music rather than recording. A number of the top grossing artists are making much of their money from touring and are recording very little new music. Ever wonder why?
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Anonymous Coward, 7 Apr 2009 @ 4:28pm

Re: Re: Re: Re:
lol...Yes, I suppose those people that can afford $250 (and perhaps more) for a ticket may be fans, though I also suspect that there are people who go for reasons other than being fans. I wonder how many people went to the "Hell Freezes Over Tour" just because it was an Eagles' reunion, or because of the status it gave them? I would guess a lot.

As for payment of $1,000, that would be fine except the crappy seats usually cost $85 or $95.
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Anonymous Coward, 7 Apr 2009 @ 5:11pm

The Obvious Solution
Sell one ticket per customer the night of the event.
You buy the ticket, you have to go inside.
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Vincent Clement, 8 Apr 2009 @ 6:08am

Re: Re: Re: Re: Re:
I wonder how many people went to the "Hell Freezes Over Tour" just because it was an Eagles' reunion

Who would go to an Eagles' reunion other than fans (or at the very least people that wanted to see them live)? No doubt some people bought tickets just to say they were there, but I'm thinking that there were far more fans than posers.
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Raybone, 8 Apr 2009 @ 10:19am

Charge at the door
This admittedly is a low tech solution that may involve some inconveniences..no pre tics, no internet, security, etc...but a workable solution even for stadiums. Charging at the door is the ultimate democratizer.
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Anonymous Coward, 8 Apr 2009 @ 10:38am

Re: Re: Re: Re: Re: Re:
Vincent:

I absolutely agree that there were probably far more fans than posers, but if even 20% of the tickets went to posers and wealthy people who were at best casual fans and who could pay scalper prices, it skews the price of tickets hugely.
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Steve, 11 Apr 2009 @ 11:45am

There's something inherently wrong with the system when a concert sells out 54000 seats in 12 minutes but you can immediately buy choice tickets at a 500% markup from some douchebag 2000 miles away. And he's got like 20 pairs.
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