If you’ve ever browsed the Ticketmaster site looking for concert tickets, you may have chanced upon a section featuring “official platinum seats.” A click will bring you to a trove of tickets that are selling for more than the standard advertised price. Significantly more.
Ticketmaster advertises these tickets “some of the best seats in the house,” but charges up to ten times more for them than seats with similar views of the stage. So what’s the difference between these seats and the normally priced ones? The National Post was curious, so they made some phone calls.
In a report in the Financial Post on Saturday, writer Claire Brownell explains that Ticketmaster reserves blocks of tickets for artists, promoters and entities such as credit card companies which offer ticket-buying advantages to their members. By designating them as “special,” they can offer these seats at higher prices and not violate any laws against scalping. In other words, these blocks are given a higher face value from the get-go.
It’s totally legal and legit–and the artist makes a little extra money from the sales of these tickets. Besides, the reasoning goes, you might as well make extra money the first sale of these tickets rather than not make any at all from tickets that inevitably will end up on the secondary market, often for around the same price.
You know, I can buy that explanation. Better that the money goes to the artist than the scalper and broker, right? And since there are always going to be people who are willing to pay for tickets at these prices, you might as well keep it in-house, you know?
This brings me to Bob Lefsetz’s analysis of the ticket pricing conundrum. Actually, he doesn’t see it at as conundrum at all. Concert tickets, he says, are chronically UNDER-priced.
It’s no different from drugs. The government reduces Oxy availability and the heroin dealers see an opportunity and move in. That’s what happened, that’s why everybody’s o.d.’ing, heroin is not only cheaper, it’s a more available fix.
So get off your highfalutin’ college education pedestal and see when an entire industry underprices its inventory there will be those willing to move in and skim the profits. You can’t put billions up for grabs and expect those who are not already rich, or those who already are, the hackers and the ticket scalpers respectively, to not move in and take it.
Of course there’s subterfuge in the offering. When tickets finally go on sale they may be less than a tenth of total inventory. Pre-sales and holdbacks making up the majority. Get your Amex or Citi card, or both, join the fan club, do your best to be an insider, there are rewards for being a regular customer as opposed to buying once a year… But the real problem is we’re underpricing our tickets.
What’s the value of a front row Beyonce ticket? Four hundred? A grand or fifteen hundred in NYC? That’s what they end up going for, either through scalpers or platinum procedures. Yes, platinum, it’s a way for the industry to capture that income without looking bad. You give a good seat and a laminate and maybe a poster or a meet and greet and somehow that rationalizes a ducat price far in excess of face value. But the truth is people just want the seats, close, and that’s what they’re worth.
You can read the entire opinion piece here.