Comment by tomhow
3 days ago
No, it‘s an audience/artist experience problem. I worked for one of Australia's biggest outdoor summer music festivals through the 2000s (I built a direct ticket selling platform for them). Their popularity grew each year, and, sure, they could have just raised their prices to try and match supply and demand. They 100% did not want to do that because they knew it would completely change the audience demographics and make a less fun event for everyone to attend and a less fun event for the artists to perform at, thus making it harder to attract audiences and artists in future years.
They ended up being acquired by a company that was much more into charging top dollar to big-spenders. The company was ultimately acquired by Live Nation and the ticket prices kept increasing until suddenly ticket sales stopped, and that whole category of festivals is now largely dead in Australia.
It sounds like they found the price ceiling. Trying to pick your customers is a fools errand, particularly with a music festival where tastes change and people age out.
The point is that it's not simply “a supply and demand problem” when you factor in downstream effects. The product is not merely the performance; the audience makeup and energy is a crucial part of the experience, and they also influence the artist's ability to deliver the best performance.
It's no good optimizing for simple supply and demand in one year if it destroys the product and therefore demand in subsequent years, which is what we're seeing the market. I'm familiar with libertarian principles, but every libertarian economist I've paid attention to has emphasized the importance of second-order effects.
I mean sure, you don;t want to drive away your audience, but the existence of a second hand market with much high prices clearly means you aren't pricing tickets correctly. The existence of the scalper with the 10 or 100x price is the second-order effect of under pricing, and everything Ive read already suggests that audience makeups are changing at music festivals as more tickets are bought second hand at these considerable markups.
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