In Ticket Masters: The Rise Of The Concert Industry And How The Public Got Scalped, authors Dean Budnick and Josh Baron offer a detailed account of how the business has virtually destroyed itself. This being an arm of the music industry, is there any real surprise that greed is at the heart of the matter?
The story begins in 1966, when Jack Quinn and Harvey Dubner rolled out a computer system for ticket sales. Theoretically all of the ticket inventory for an event would be housed in the data base, which would allow for a controlled system of distribution. At the time, hard tickets for shows were hand-delivered to various outlets in the area, such as record stores and department stores. There were a couple of glitches to this pioneering method however.
First of all, there was strong resistance from ticketing agents who were making a great deal of money by skimming off the best seats and selling them to scalpers. As Budnick and Baron illustrate, that particular form of collusion dates back at least as far as a reading tour Charles Dickens undertook back in 1868. The customer would make their way to the ticket window, only to be told that all the tickets had been sold. Standing right next to the booth would be an man offering seats at ridiculously inflated prices.
The second problem was that the venues would not release their entire inventory to Ticket Reservation Systems (their original name, later Ticketron). The third difficulty was in the capital investment for such an arrangement. Each outlet needed the technological equipment to tie-in with TRS, and this was not cheap. The early solution was to rent out the computers and monitors to the locations - to be offset with a rebate on each ticket sold. This rebate was called a service charge, and the cost was borne by the customer.
Over the course of the next three decades, the basic model of Ticketron was refined and expanded in many ways. There was also competition, primarily from a company calling itself Ticketmaster - who bought out Ticketron in 1991. Ticketmaster successfully convinced the industry that to do their job properly, they needed to have exclusive access to the tickets. To grease the wheels on this arrangement, additional service charges were employed - again as rebates to the venue, paid by the ticket buyer.