Official Scalpers

The capitalist in me says why not to this – why should brokers and scalpers be able to get what the market will bear but not the venues or the performers? Yet I don’t trust Ticketmaster any farther than Pearl Jam could throw them. I fear it will help drive up the price of all tickets even more quickly, but if the market is allowed to be truly fluid, it could also lower the minimum price of entry for smart buyers, much like the Internet brokers have done for travel, etc.

Late this year the company plans to begin auctioning the best seats to concerts through ticketmaster.com.

With no official price ceiling on such tickets, Ticketmaster will be able to compete with brokers and scalpers for the highest price a market will bear.

“The tickets are worth what they’re worth,” said John Pleasants, Ticketmaster’s president and chief executive. “If somebody wants to charge $50 for a ticket, but it’s actually worth $1,000 on eBay, the ticket’s worth $1,000. I think more and more, our clients – the promoters, the clients in the buildings and the bands themselves – are saying to themselves, `Maybe that money should be coming to me instead of Bob the Broker.’ ”

….Once the auction service goes live, Ticketmaster will receive flat fees or a percentage of the winning bids, to be decided with the operators of each event, said Sean Moriarty, Ticketmaster’s executive vice president for products, technology and operations.

….Industry watchers agree that auctions will affect all concertgoers. Prime seats are undervalued in the marketplace, said Alan B. Krueger, a professor at Princeton University’s Woodrow Wilson School of Public and International Affairs, who has studied ticket prices. He predicts that once auctions begin revealing a ticket’s market value, prices as a whole will climb faster.

Gary Bongiovanni, editor of the concert industry trade magazine, Pollstar, predicted that all ticket prices would become more fluid. After a promoter assesses initial sales from an auction, remaining ticket prices could be raised or lowered to meet goals. [NY Times]