Are concert tickets UNDER priced?

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• Ticketmaster's CEO, Michael Rapino, claims concert tickets are underpriced, contrasting sharply with artist Molly Obamsuin's belief in keeping prices accessible to avoid curating an audience based solely on income bracket.  Copied to clipboard!
• Ticket reseller bots are considered an industry scourge causing fan frustration, yet economists argue the secondary market serves the function of correcting primary market mispricing where artists set prices below equilibrium.  Copied to clipboard!
• Maine enacted a new law banning bots, making spec tickets illegal, and imposing a 10% resale cap, which has successfully reduced manual scrubbing efforts for venue operators like Lauren Wayne, though this may push bot activity to states with looser regulations.  Copied to clipboard!

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Artist Pricing Philosophy

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(00:00:12)

• Key Takeaway: Artist Molly Obamsuin consciously limits ticket prices to maintain audience accessibility, contrasting with industry leaders’ views.
• Summary: Composer Molly Obamsuin recalls setting a personal cap of $150 for tickets to ensure accessibility for fans of varying income levels. She believes artists should actively choose their audience rather than letting success dictate an exclusive income bracket. This contrasts with the perspective of Live Nation’s CEO regarding ticket valuation.

Ticket Price Disparity Example

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(00:01:11)

• Key Takeaway: The price of concert tickets, exemplified by Bruno Mars, is rising faster than general inflation, creating an economic puzzle.
• Summary: A specific example shows Bruno Mars tickets on Ticketmaster reaching a minimum of $850, illustrating extreme price inflation. This rapid increase in ticket costs is outpacing overall inflation rates. The ticket market presents a complex economic puzzle for fans, artists, and venues.

Bots and Resale Economics

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(00:01:47)

• Key Takeaway: Reseller bots, though widely despised, serve an economic function by correcting primary market mispricing.
• Summary: The strange economics of the ticket market have fostered the rise of reseller bots, which are often seen as an industry scourge. Economically, these bots function to adjust prices when primary market tickets are set below the true market-clearing level. The episode promises to explore arguments for and against these bots and efforts to combat them.

Venue Battle Against Bots

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(00:03:22)

• Key Takeaway: Venue operators identify bot activity through spec tickets and bulk overnight purchases, requiring time-consuming manual voiding processes.
• Summary: Lauren Wayne, who runs the State Theater in Portland, Maine, recognizes bot activity when tickets appear on resale sites before official sales begin (spec tickets). Large, rapid ticket purchases, like 500 tickets overnight, signal bot activity, forcing staff to manually void transactions and refund money. This process is complicated when resellers sell voided tickets, leading to fans being denied entry.

Market Villain Finger-Pointing

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(00:05:21)

• Key Takeaway: Accusations regarding the secondary market involve resellers, resale platforms like StubHub, and primary ticketing giant Ticketmaster/Live Nation.
• Summary: The secondary market involves finger-pointing, with resellers operating bots being the obvious villains, and platforms like StubHub criticized for profiting while policing activity. The FTC sued Ticketmaster in September, alleging coordination with resellers and profiting from marked-up ticket sales, which the company denies while citing billion-dollar investments in anti-bot technology.

Economist View on Mispricing

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(00:06:30)

• Key Takeaway: The secondary market corrects the surplus created when artists intentionally price tickets below the efficient market equilibrium.
• Summary: Economist Alan Sorensen argues that the secondary market corrects mispricing when artists set primary prices too low, believing they are helping fans. If a ticket sells openly for $250, that becomes the market price, even if fans feel it is too high. This results in profit going to resellers instead of the artist or venue, which can feel unfair.

Maine’s Legislative Solution

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(00:08:37)

• Key Takeaway: Maine’s new ticketing law bans bots, outlaws spec tickets, and caps resales at 10% above face value, providing immediate relief to local venues.
• Summary: Venue operators pushed for state laws, resulting in Maine banning bots and spec tickets while implementing a 10% cap on resale prices. This cap allows regular fans to resell tickets if they cannot attend without price gouging. Since the September implementation, Lauren Wayne’s theater staff has not needed to manually void bot purchases.