CAPTCHAs are over (in ticketing)

I can’t claim I’m the first one to think about this, but every time Ticketmaster shows up on HN I keep coming back to this idea:

Sell the tickets with regressive price based on time. Sales starts say 2 months before event, initial price is truly exorbitant, say one million dollars. Price decreases linearly down to zero (or true cost price). At any point, people can see current price and the seats left.

Now every potential spectator is playing a game of chicken: the more you wait, the lower the price, but also lower are the chances that you’ll have a ticket. That would capture precisely the maximum amount of dollars that each person is willing to pay for it.

This idea sounds extremely greedy, because it is, so I can’t fathom that no one ever pitched this in a Ticketmaster board meeting.

My idea, however, was a bit less greedy. Once you sold the last ticket, that would be your actual (and fair) price-per-ticket for the concert, and everyone would be refunded the difference. You’ll never know how low it will go, so you shouldn’t overpay and hope it will lower later. I’m pretty sure Ticketmaster will skip this last part if they decide to implement this.

There are multiple issues with my idea, it’s elitist, promotes financial risks on cohorts poorly capable to bear them, etc etc, but it will definitely fix the scalpers problem. Pick your poison.

The scalper problem is a mispricing problem: Scalpers are just arbitrageurs because ticket prices are artificially very low.

If you want to fix that, you need to ask yourself "why are ticket prices artificially very low?" first. The answer probably isn't "artists/venues like leaving money on the table".

Ticketmaster has it's own resale platform. It's able to double dip. They basically say tickets are relatively cheap and scalpers are the bad guys. They encourage the scalpers. Then they can resell using their own resale platform and they get fees on top of that.

The fees on re-sellers are crazy, and they take fees from both seller and buyer.

Seller Side:

List price: $100

StubHub seller fee (15%): -$15

Seller receives: $85

Buyer Side:

Ticket price: $100

StubHub buyer fee (10-15%, let's use 12%): +$12

Buyer pays: $112

StubHub's Take:

From seller: $15

From buyer: $12

Total StubHub revenue: $27

So they're making an additional ~27% (on the "true" market price) in addition to the ~25% they charge in the primary market. So if the market price was $200, if they just charged that they would make $50. But instead they'll sell it for $100, make $25 on the primary and an additional $50 when sold in the secondary market.

They don't own StubHub but they have their own. In 2017 they opened up TicketExchange which allow the sale and validation of tickets on third-party websites, including StubHub, which they did to capture some of that amount. They get to play like the reasonable party here, the scalpers are taking the heat and they're getting a cut of that.

They do other things that's baffling like selling tickets a year ahead of time, which is kind of weird considering very few people, even big fans, would be really on top of buying tickets a year out. It's obviously designed for scalpers.

You can easily solve this by having the ticket tied to a name and requiring you to show ID, maybe allow others to dump back at face value, but that would likely be gamed as well but not as easily (you dump your tickets and let someone else pick them up at that exact moment). Or make them non-transferrable but that would greatly reduce the value to fans.

It's much more complicated (and worse) than that.

Ticketmaster reserves some seats during sale to be dynamic pricing, which they start higher than normal and then depending on demand and what they see on the secondary market they re-price those as the initial sale or presale is ongoing, just minutes after it starts.

Also, promoters, artists and venues might get their own allotment of tickets to do with as they want, likely negotiated in contracts. Those seem to find their way onto secondary markets often as well.

> They do other things that's baffling like selling tickets a year ahead of time, which is kind of weird considering very few people, even big fans, would be really on top of buying tickets a year out. It's obviously designed for scalpers.

Yes, I've commented on this here before. In some cases it's because tours go on sale at the same time (to generate buzz), and the early events are relatively soon and the last events are quite far out. They also often do release chunks of ticket inventory at later stages. That said, I'm convinced that often brokers are used as a simple way to provide immediate cash and reduce risk. Why would a promoter want to sell out over months when they can sell out immediately and know that regardless of whether the brokers make money (they don't always) they have sold everything and can say the event is sold out and they have cash in hand now and not months from now.

I used to work in this industry and there's a lot of shady stuff that goes on, and it's not all on the broker/scalper side.

> You can easily solve this by having the ticket tied to a name and requiring you to show ID

That's been done for a long time and you can still get around it if the margin is good enough. You just have to either want to go to the event yourself or be willing to one ticket out of the maximum you can purchase as the cost of doing business. You can't really make every seat have a name initially because not everyone actually knows who they're going to invite for sure at time of purchase, so if you want to really make it effective you have to limit the number of tickets per transaction to 4 or less. Even then, people will be incentivized to buy the max and have people go with them to use the extra tickets at cost or more, it may not be brokers but the regular public will do it too.

The actual solution for this is fairly simple. It's supply and demand. Play more shows at a location and the ticket prices will drop. Kid Rock has done it for decades at this point. Artists don't like having to put the extra work in for less money (tickets will be cheaper) and don't want to take the risk that the demand won't be there if they book the venue early. That risk is pushed out to brokers.