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Dispelling Myths in the Ticket
Brokering Trade
Anyone who has waited in line at
a box office or attempted to access Ticketmaster during
an onsale event has probably experienced the frustration
of not getting their desired ticket location or being
unable to purchase tickets at all. Many people believe
that ticket resellers use their 'tricks of their trade"
to obtain tickets, control the supply and drive up
ticket prices. However, the problem for consumers is
not the existence of brokers, their frustration is
caused by ticket demand exceeding ticket supply. Often
villainized ticket brokers actually give consumers
access to an otherwise unattainable good with a built-in
assurance of delivery and validity. A market without
reputable brokers is a market with fewer choices and
less recourse for consumers.
There are several myths
associated with the ticket brokering industry including:
A) "Ticket Brokers have software
that allow them to buy up all of the tickets before
anyone else"
B) "Ticket Brokers pay "ice" to
the concert promoters, venue box offices and
organizations to get first pick of the tickets"
C) "Ticket Brokers buy up all of
the tickets and drive prices up"
Regarding myth A, in the early
stages of Ticketmaster.com several programmers created
"spinner" software designed to quickly log in and
purchase tickets as soon as they were put on sale. The
use of such software is illegal. In the last several
years companies like Ticketmaster.com have implemented
spider blocking security measures (i.e. coded letters
and numbers that need to be examined by the human eye
and entered) which has virtually eliminated the
usefulness of spinners. In addition Ticketmaster often
implements ticket limits per name, billing address and
or credit card.
This prevents any one individual
or brokerage from "buying up all of the tickets." For
the record Epic Seats Inc. has never utilized spinner
software to purchase tickets and Epic is happy to see
them rendered useless.
Myth B speaks to an illegal
practice of bribing individuals with access to event
tickets, including promoters, box office employees or
performers.
When the NFL found out that Mike
Tice was selling Super Bowl tickets to a California
based brokerage it levied a heavy fine and directed him
to stop.
Ticketmaster and other primary
ticket sources are aware of the practice of bribery for
access to tickets and in order to protect the integrity
of their organizations they have imposed stringent
procedures and codes of conduct with the aim of
restricting employee access to tickets. Bribing
insiders is an unsavory practice and is not a
sustainable way to run a business.
Eventually the "insider" will
lose their job, move on or the organization paying the
bribe will be exposed. This practice is not as common
as people may believe.
Myth C has two basic faults;
One, the number of tickets traded on the secondary
market rarely exceed 5% of a venue's capacity. It is
nearly impossible for a broker to "buy up all of the
tickets" as the vast majority make it into the hands of
season ticket holders and those who desire to attend the
event.
Two, the market is comprised of
self interested buyers and sellers which creates pricing
equilibrium. Consider a team that is underperforming
and does not sell out their arena. The reason being is
that buyers are not willing to purchase tickets at face
value. That creates a market price below face value.
Any ticket broker who holds season tickets for this team
will be offering them at the market clearing price, they
have no choice but to do so, unless they want to eat the
total purchase price of the ticket.
This creates opportunities for
buyers and the consumers benefit. The opposite happens
during a hot event. The original sales price no longer
reflects what consumers are willing to pay for these
tickets. In this scenario the more tickets supplied the
better for consumers as the competition for consumers
asserts a downward pressure on the market price.
In a world without brokers, the
ticket prices would be even higher, that is if consumers
could even find someone willing to sell tickets for
events.
Removing ticket brokers from the
equation would not mean that all buyers would be able to
purchase at face value up until the game/show time. It
only means that if the demand for tickets exceeds the
quantity supplied the tickets would be sold out just as
quickly only fewer tickets would be offered on the
secondary market and those few that do would go for a
greater price. Name any other legal good, commodity or
product in the US with limitations on its secondary
market, there is not any. If a consumer purchases an
article of clothing at a garage sale, they have every
legal right to sell it on Ebay for more or less money.
This is the concept of free markets with buyers and
sellers freely engaging in transactions that are
mutually beneficial (consumer wants the ticket and is
willing to pay X, broker wants to sell the ticket and is
willing to sell for X, ticket is sold at X - both
parties are satisfied).
The truth is that reputable
ticket brokers acquire their tickets through legitimate
means. A large portion of inventory is acquired from
season ticket holders who have purchased the tickets
from the organizations for many years, often enduring
losing seasons where the market price was well below the
price they paid. Most of the time these fans are forced
to purchase pre-season and exhibition games at regular
season prices. It is understandable when these
individuals decide to sell some of their tickets when
the value rises above their face value investment.
Another large portion of tickets are purchased from
primary ticket sellers when they go on sale to the
public. Other tickets are purchased on the secondary
market from fellow brokerages.
America was founded on the
freedom of choice, having the option to legally re-sell
your tickets at market prices benefits season ticket
holders and the clients who freely choose to purchase
these tickets. Reputable ticket brokerages help to
provide season ticket holders and attendees a trusted
intermediary in this marketplace and everyone
benefits.
James Kimmel is the co-founder
of Epic Seats Inc, a national ticket brokerage,
specializing in selling tickets on behalf of season
ticket holders in order to help them offset the rising
cost of ticket acquisition.
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