Circa 1980, George Thorogood made a concert stop in Edmonton. Right in our university — SUB Theatre! What an opportunity to see this blues/rock star live. We were singing, “One bourbon, one scotch, one beer!”
But the math was not good. SUB Theatre only had 400 seats; these tickets were not going to gather much dust at the SUB Theatre Kiosk.
Did I just say “kiosk”?
Yep. In pre-internet days, we bought paper tickets at a kiosk. We gave the kiosk clerk our cash; the clerk gave us our tickets.
SUB Theatre announced when the George Thorogood tickets would go on sale. The kiosk was set to open at 6:00 a.m. in just a few days time.
My engineering buddies were excited. We were “bad to the bone.” But waking up in the early morning was not this beer drinker’s thing. My friend Clive sacrificed himself to make the early morning trek.
We gave Clive our money. He got up at 4:00 a.m. He got to the kiosk at 5:00 a.m. He was third in line. Clive bought 30 tickets, which is about 8% of the total venue. By 6:30, all the George Thorogood tickets were sold. Many people who lined up did not get tickets.
Clive passed out 20 tickets to his buddies. He scalped the rest. I didn’t ask, but I suspect he was paid well for getting up early in the morning.
It was a great concert. I was three meters away from George. I’m sure he still remembers me!
The aftermath of the concert
How the tickets were sold caused a lot of backlash in the local media. They called people like Clive the scum-of-the-earth. The buyers of Clive’s tickets at the higher prices were not much better than Clive; how dare they pay for someone else to jump the line for them. And I was obviously not a real George Thorogood fan because I did not get up at 4:00 a.m. to buy my own tickets.
For Edmonton, this was not the first time ticket sales to big events were criticized. It would not be the last. Eventually, some rules came into place. I believe Clive, by himself, could not have bought 30 tickets at one kiosk setting.
My anecdote demonstrates that scalpers have been around for a long time. This is not news.
Taylor Swift tickets
I recently watched a CBC (Canadian Broadcasting Corporation) mini-documentary about the controversy around Taylor Swift tickets. The ticket sales were no longer done at kiosks, but from websites. Fans were waiting comfortably by their computer monitors, waiting for the exact second tickets went on sale. Some got through and made their purchase; some did not, as the website server could not handle the traffic. The documentary had TikTok videos of young women crying because they could not buy a $600 ticket to the Taylor Swift show.
Blame was being cast for the fiasco. The ticket agency should have anticipated the demand and built up its server capacity. The evil scalpers were plugging up the limited portals; so many real fans could not get in. The evil scalpers were then reselling tickets for two to four times the original price. How dare they?
I was hoping to find a link to the documentary. When I googled “CBC marketplace Taylor Swift scalpers,” I got more than 20 CBC articles about Taylor Swift and her scalpers. Scalping seems to be a popular news item for CBC to report on. I suspect other media outlets also like this kind of story.
This link will lead you one of those articles.
In this article, a high-ranking politician is commenting that this problem is worthy of fixing. Hold that thought!
The economics of scalping
My recollection is that the face value for my George Thorogood ticket was $20. And that’s what I paid Clive. I would have begrudgingly paid Clive $40 if he had made me feel guilty about getting up at 4:00 a.m. to buy tickets for me. But there were limits to my wallet. If he had asked for $60, I would have kept my money. I didn’t worship George that much.
This anecdote displays one of the fundamental laws of economics: as the price increases, the demand decreases. Conversely, lower the price and more people want to buy. This law of economics works for many more products and services: bananas, T-bone steaks, TVs, term deposits, cars, fast food, etc., etc. Would you pay $5 for a banana? So many things are somehow influenced by mysterious supply and demand curves magically finding the equilibrium price. Event tickets can be explained by Economics 101.
If I was an average George Thorogood fan and willing to pay $40, it seems George sold himself short. He could have got another $20 from everyone in the SUB Theatre that night. At 400 seats, that was $8,000, which is about $30,000 today. That’s a serious amount of cash for an artist to leave on the table.
But George did get $20. Well, not really. There are two parties needed to put on a concert. The obvious one is the musicians. They have developed their skills, fandom, and a playlist that make fans willing to come to the concert. But musicians really don’t want to do the business of the concert. So George and the Destroyers made a deal with a promoter to handle all those not-so-glorious details of the event: venue, promotion, tickets, and security. The band did the music; the promoters did the business.
The deal between George and the promoter is really none of our business. Obviously George (or his agent) got enough money to pay George and his small crew reasonably well and pay all the road expenses. The promoter got enough money to make a little profit — and not all concerts are profitable.
But George still left $20 per ticket on the table. Surely he (or his agent) would have known his 1980 popularity was strong enough to justify a higher price. Hold this thought!
Let’s go back to Taylor Swift selling tickets for $600. The scalpers swooped in to buy as many $600 tickets as they could because they knew they could sell them for $1000 to $2000. While they, too, were frustrated by the limitations of the ticket server, they just kept clicking until they found a way into the ticket portals. Like George, Taylor left a lot of money on the table. Why do these artists price themselves lower than market value? And this underpricing has been going on for 40 years! Why?
Big artists need scalpers
Here’s my hypothesis.
Musical acts need their fan base to sustain their musical career. A successful concert leads to more recorded music sales. Fans talk to other fans. They feed off of each other’s hype. The next time George or Taylor comes to town, their fans want to be at that concert.
To keep loyal fans loyal, the musicians cannot appear to be too greedy. They do not want to give the impression that they are maximizing their profit at the expense of their loyal fans. So when the musicians underprice their performance, the scalpers swoop in. The media deride the scalpers. The indirect message is that the musicians sacrificed some of their earnings just so their fans could afford to attend their concerts. How benevolent!
The scalpers don’t care when they get trashed in the media for profiteering. Clive didn’t seem to be ethically challenged.
The musicians care that the scalpers get trashed in the media for profiteering. The musicians get some extra PR for their act. The musicians are cast as good guys who care about their fans.
More people want to attend the next concert.
Let me say this in different words. There is a symbiotic relationship between the musicians and their scalpers. Even with lower prices, the musicians still make a good living from their music. But the greedy machinations of the music business is deflected to the scalpers. The musicians stay wholesome and famous. It’s a great PR trick. Musicians underpricing their own concerts has been happening for at least 40 years.
But what to do with the scalpers?
This article started with the media hullabaloo of the scalpers for a George Thorogood concert in Edmonton in 1980. We are still having this hullabaloo in 2024. So much complaining about scalpers, yet nothing has been done. Why?
So is my hypothesis more than just a hypothesis?
If we did not have scalpers getting all the media attention about profits, then music fans would question the lavish lifestyles of our heroes and ask, “Am I really paying for that?” The scalpers have an important role to deflect the corruption.
My advice: Let’s do nothing!
Let’s just let the free market decide. Let the musicians and their promoters make their own business deals. If the musicians want to underprice their tickets to make themselves appear benevolent, then that is their business.
But underpricing has a consequence. Demand is now greater than supply. Some fans willing to pay the underpriced price will not get tickets. Scalpers see a way for a quick profit. This is as natural as the sun rising in the east and setting in the west.
If a fan is offered a scalped ticket for a higher price, the fan can choose to buy that ticket — or not buy that ticket.
The ticket monopoly
Enrique Dans has written an interesting article about how the ticket industry seems to have become monopolized in the past 40 years.
https://medium.com/enrique-dans/ticketmaster-is-a-rip-off-and-everybody-knows-it-483b6c30e384
My apology: this link is not likely to work if you are not a member of Medium
Now the monopoly is trying to maximize its own profits, even accused of setting up fake AI scalpers. In this way, the ticket seller, not outside scalpers, gets to profit on underpriced tickets.
My advice: If a fan does not like the corruption from this monopoly, then don’t buy from that monopoly.
If musicians do not like dealing with this monopoly, those musicians can find another way to sell the tickets. Have they ever heard of kiosks? Rumor has it that loyal fans will line up at 5:00 a.m. to buy tickets. Limit the sales to four tickets per buyer! If buyers want more, they can return to the back of the line.
Taylor Swift and a few other wealthy artists can afford to set up their own ticket co-operative — if they want. Here’s something even better: set up a spolu, which will later share the profits with the ticket buyers.
What should be our real priorities?
I alluded to a politician believing government should fix this mess. But our 19th century legislators are already working too slow for the 21st century. Giving the legislative docket to regulating scalpers and ticket monopolies only means less time spent on finding solutions for affordable housing, dealing with addictions, and feeding hungry kids in school.
And if we pass the legislation, then we have to hire more police to deal with scalpers, which means less money for public housing, mental health issues, and feeding hungry kids at school.
Methinks the legislation will get passed. But the extra policing won’t be there. So why do we force our politicians to pass this legislation that won’t be enforced.
We — the people — have total control in this economic issue. We need only say, “No, I’m not buying these tickets. I do not need these concerts to sustain myself.” That will smarten the event industry up big time.
Instead of buying tickets to the big stars, spend an evening taking in concerts from our local artists or travelling troupes. They may not have the stage show and familiar tunes, but, musically speaking, many of them are at least ¾ as good as our heroes. And much cheaper!
How the hand that gave a free lunch slaps back!
It’s been 44 years since my first and only George Thorogood concert. Occasionally, I wonder about Clive. He just might phone me: “Hey Volek, remember when I got you that George Thorogood ticket and did not charge you the scalper rate?”
If the world finds out that I am associated with a known ticket scalper and benefited from his evil ways, my career of inventing an alternative democracy is over. Me knowing Clive is definitely a good excuse to never read my work. Maybe the world already knows — and that’s why I’m a bottom writer.
Published on Medium 2024
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