From the BBC:
A number of MPs are calling for ticket-touting at big sporting events to be made illegal. The ban would include Wimbledon, where tickets for tomorrow's men's final are currently being offered on websites for more than £6,000 a pair....
Hey, I tell you what will stop touting once and for all, just sell the tickets off by an auction process. If they'd been auctioned off for £6,000 each, then very few 'touts' would have gambled on them rising in price.
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8 comments:
I suspect the BBC "journalist" wrote that before the Brit lost & that any tout who has any left just lost several thousand pounds. This is how speculative markets work.
NC, correct.
I have thought about this a bit more and it strikes me that the market for second hand tickets is like the Stock Exchange. If banning the sale of 'second hand' tickets is The Right Thing To Do, then logically, the Stock Exchange should be shut down as well.
Fairness just weighs us down in this country. Our fair for all is only a fairytale version of communism.
That was fair. Shit, but fair {ish}
It seems 'life's not fair' was abolished in the 1990's.
Mind you, it seems to be making a comeback.
I told DCMS as much in their last consultation on ticket touting.
They don't see it the same way. They think that a better code of practice for the ticket touts trade association is the way forward.
The real scandal is that because of this market imbalance thousands of people are getting defrauded every year by bogus ticket resellers and touts who sell naked.
I support your line of thinking, Mark, but what kind of auction process do you envisage? People want to buy their tickets at different times. Would there be a single auction sale, clearing at a single price? A continuous double-auction? A series of auctions? Should each venue run its own auction? The ticket sellers get most rent if the market is not transparent, efficient or even clears, so don't expect them to support any such plans.
The operator of the auction would probably not be the venue, but something like Ticketmaster/Live Nation. The operator would be able to extract most of the economic rent from the venues, as at present, particularly as it could manipulate the price by controlling the market and creating artificial scarcity. What we have is more like a commodity market with physical settlement than a stock market.
As always, it comes down to land and monopolies. The venue, the band/show, and the promoter/sales agent are all potentially in a monopoly position, so you can expect skulduggery in the distribution of the rent. My hunch is that the promoter/sales agent will generally come out tops, helping restrict the supply of bands and venues by reducing their profitability. The recent US Ticketmaster Entertainment, Live Nation merger shows this is how the market has developed, in spite of Justice Department investigations.
The MPs would perhaps be more rational in setting up an official not-for-profit secondary marketplace, aiming to move to a transparent, high integrity market. But that would take power from vested interests, so it ain't gonna happen.
AW, the venues can all make up their own rules and we'll see which ones 'work'. It's a mystery to me why venues wouldn't want to maximise their own income in the first place.
One way of handling this would be for venues to sell tickets in advance on a declining price basis. So for instance a venue might initially put all tickets for a show on sale eight weeks before a show at 570 pounds a piece, say, and then reduce the price by 10 pounds per day until show day. If the the venue was magnanimous it could offer to refund the difference between the price on the day a ticket was purchase and price on the day it was surrendered for any cases where the customer had to cancel. However that's not an essential part of the system.
Under a declining price system the main advantage is that the money then ends up (on average) with the venue rather than with the touts. Customers can wait until the price has dropped to a price which they are willing to pay but touts have to be good at estimating the market value of a ticket to an average customer in order not to buy too soon whereas under the current system they can just buy ASAP on the assumption that even if the show is less popular than they expect they won't make a loss, just break even or make a smaller profit (as long as there is anyone who wants to buy a last minute ticket anyway.
D, designing the auctions will be the fun bit. A declining price auction seems like the simplest way to go, but what if they start with £570 on day one and the tickets are still being snapped up by touts? They'll kick themselves they didn't start off with a higher figures.
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