By: Collin Cagle
Scalping is a cancerous lump that has been attached to live events since tickets have been sold. Even as early as the 1800s, court cases about the scalping of tickets started popping up all over the United States.[1] Several states have taken steps to combat these issues, but ticket scalping still exist today.[2] Today, ticket resale is a billion dollar industry.[3] This generally means that ticketing businesses miss out on additional profits, and individuals have to pay more for many events.[4]
Today, more and more people buy their tickets online, and this has been especially true in the aftermath of COVID. Now, a significant amount of scalping takes place online.[5] Since most state laws do not account for this, there have been major increases in ticket prices for the average consumer.[6] As an example, a resale ticket to a Taylor Swift concert in 2018 was $157.00.[7] In 2023, just five years later, this resale price for her “Eras Tour” had jumped up to $3,800.00.[8]
In the absence of law changes, artists and ticketing companies have had to combat this on their own.[9] Artists have several reasons to help fans solve this issue. The first is that these huge increases in ticket price are not going to artists, but are instead going to scalpers who upscale them for profit.[10] The second, more altruistic, reason is that this can lead to more and more of their fans not being able to see the shows. Both of these reasons can lead to more venues “selling out” ticket wise, but being half full or less on performance day, which can hurt both fans and the artists alike. However, ticketing companies have different reasons for taking on scalping.
Ticketmaster has a few different ways to profit from the same ticket.[11] The first way is the original sale. The event goes on sale and Ticketmaster will take a percentage and a fee from each and every ticket sold.[12] However, this is not the end of their profiting. Ticketmaster allows individual to sell and trade tickets through their website for many events. This in turn allows the company to take another cut of this extra sale for the same ticket.[13] Currently, the fee on resale rickets is 12 percent of the resale value of the ticket.[14] So, if a $150 ticket gets resold for $1,500, Ticketmaster will make money from fees on the original ticket sale, as well as an extra 12 percent when the ticket is resold for $1,500. They may even stand to make even more profit from the resale market than the original ticket sales. This can (and has) led to extreme conflicts of interest between ticketing companies, artists, and fans.[15]
While Ticketmaster has tried to sell the image of being on the side of artists and fans in the fight against scalpers and bots, this has not been shown through their actions.[16] In 2018, Ticketmaster and its parent company Live Nation were found to have been running a secret ticket scalping racket themselves.[17] A few years later, in 2023, many fans of Taylor Swift found themselves out of luck having to battle not only bots and scalpers, but Ticketmaster itself as well.[18] It has become obvious to many that either Ticketmaster is either not making enough effort to make their platform as effective against bots and scalpers as it can, or that there needs to be space in the industry for some healthy competition.[19] This led to the opening of an antitrust investigation by the Department of Justice into Ticketmaster parent company Live Nation.[20] Just earlier this year, the government decided that it needed additional documents in order to make a proper complaint, which is expected later this year.[21]
Hopefully, this antitrust case, and eventual complaint, will be the perfect thing to either force Live Nation, and therefore Ticketmaster, to better their protections and policies or make space for some innovative and far better competition. These last few years have had incredible artist performances, only to be counteracted by disappointing sale experiences for many fans. Good news would be a great way to restore faith and get everyone back together enjoying music.
[1] Fry v. State, 63 Ind. 552 (1878).
[2] Straits Research, https://straitsresearch.com/report/secondary-tickets-market#:~:text=Market%20Overview,period%20(2023–2031) (last visited Mar. 1, 2024).
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Will Gendron, The average price of a resale ticket for the Eras Tour was $3,801. That’s up 2,321% from Taylor Swift’s last tour., Business Insider (Aug. 12, 2023, 4:30 AM), https://www.businessinsider.com/resale-price-taylor-swift-eras-tour-reputation-ticket-pitchfork-report-2023-8#:~:text=The%20average%20secondary%20market%20price,in%20North%20America%20was%20%24157.
[8] Id.
[9] Artists who have tried to fight back against bots and scalpers, CBC News (Oct. 23, 2016), https://www.cbc.ca/news/business/artists-who-have-tried-to-fight-back-against-bots-and-scalpers-1.3805299.
[10] See Straits Research, supra note 2.
[11] Mark Dent, The sneaky economics of Ticketmaster, The Hustle (Feb. 09, 2024), https://thehustle.co/the-sneaky-economics-of-ticketmaster.
[12] Ticketmaster, https://ticketmaster-us.zendesk.com/hc/en-us/articles/9663528775313-How-are-ticket-prices-and-fees-determined#:~:text=A%20service%20fee%20is%20charged,of%20putting%20on%20live%20events.
[13] Ticketmaster, https://help.ticketmaster.no/hc/en-us/articles/8171852265361-Resale-Buying-tickets.
[14] Id.
[15] Robert Ferris, Ticketmaster reportedly has secret deals with scalpers that cheat other customers, CNBC (Jan. 25 2023, 4:03 AM), https://www.cnbc.com/2018/09/20/ticketmaster-reportedly-has-secret-deals-with-scalpers-that-cheat-fans.html.
[16] The Arms Race Against Abusive Ticket Scalping, Ticketmaster (Feb. 6, 2023), https://blog.ticketmaster.com/ticket-scalpers/.
[17] Amy X. Wang, Ticketmaster Has Secretly Been Cheating You With Its Own Scalpers, Rolling Stone (Sept. 19, 2018), https://www.rollingstone.com/pro/news/ticketmaster-cheating-scalpers-726353/.
[18] Ash-har Quraishi et al., Frustrated Taylor Swift fans battle ticket bots and Ticketmaster, CBS News (Feb. 9, 2024), https://www.cbsnews.com/news/taylor-swift-fans-battle-ticket-bots-and-ticketmaster/.
[19] Ana Faguy, Ticketmaster Urges Congress To Crack Down On Ticket Scalping As Lawmakers Take Aim Over Taylor Swift Debacle, Forbes (Feb. 23, 2023, 6:47 PM),https://www.forbes.com/sites/anafaguy/2023/02/23/ticketmaster-urges-congress-to-crack-down-on-ticket-scalping-as-lawmakers-take-aim-over-taylor-swift-debacle/?sh=6a39071ec4c5.
[20] David McCabe & Ben Sisrio, Justice Dept. Is Said to Investigate Ticketmaster’s Parent Company, The New York Times (Jan. 24, 2023), https://www.nytimes.com/2022/11/18/technology/live-nation-ticketmaster-investigation-taylor-swift.html.
[21] Leah Nylen, Ticketmaster DOJ Antitrust Probe Sees New Document Requests, Bloomberg Law (Feb. 5, 2024, 7:43 PM), https://www.bloomberglaw.com/product/blaw/bloomberglawnews/bloomberg-law-news/XB8AH5VO000000?bc=W1siU2VhcmNoICYgQnJvd3NlIiwiaHR0cHM6Ly93d3cuYmxvb21iZXJnbGF3LmNvbS9wcm9kdWN0L2JsYXcvc2VhcmNoL3Jlc3VsdHMvZjVkNjQ4NDI3ODdmZGU5YTJmN2VkYmQ3YWM3YTgyZDkiXV0–ecbe8c750556a581eae6e27419802449eed38e7f&bna_news_filter=bloomberg-law-news&criteria_id=f5d64842787fde9a2f7edbd7ac7a82d9&search32=I8XLDpBFYM_-bwluUPIXbg%3D%3DByxaDJK0BvvwrvGrKMV8StIdGB9d6hcRu3XwS4UOdurVb8DkRDnHOeWa3NRjkocyCCuWpYsqg0YQAfYiXv6eRsXdhJhfCRnKsvJcwtF4cazO0QgBjQ7Rca-aWjaqxjKkUephb4zGWaEBtIp2QosTJS9M2gRqPCdm3jusR8aa33iO7IfLtbhmw0voPvPjS79BJQC8B_LQtifTarONbBzDVPJwRDlSij48TfmvvIUfK1w%3D.
