Comment by 9rx
3 days ago
> no value add to the market.
Markets are more efficient than you give them credit for. If there was no value-add it wouldn't happen. The value-add is that the scalpers take the risk and hassle off of the artist/venue. They can instantly sell out and then get back to worrying about the actual performance. Selling the tickets at their fair market value initially sounds good in theory, but then you have to spend weeks and months trying to get them sold, which is not a core competency a musical artist really wants to have. It is advantageous to underprice and know that you are sold out upfront and let someone else deal with the slog.
It's much the same as why wholesalers sell to Walmart for pennies on the dollar instead of trying to capture the retail market themselves. Selling direct to retail seems like a good idea... until you have to do it and realize you'd rather get back to what it is you're actually good at producing.
Yeah, it's just arbitrage.
They're just profiting from the difference between the cost of the item and what people are willing to pay for an item. Simple market economics, right?
As should be obvious: Since it can be explained by capitalism and we even have a nice neat concise word with which to describe it, then there's nothing to hate there. /s
> It's much the same as why wholesalers sell to Walmart for pennies on the dollar instead of trying to capture the retail market themselves. Selling direct to retail sounds good... until you have to do it and realize you'd rather get back to what it is you're actually good at.
It is not the same. Unlike Wal-Mart, scalpers do not buy truckloads of tickets at wholesale prices. They instead buy truckloads of tickets at retail prices -- and then increase the price even more.
And unlike a manufacturer like Proctor & Gamble (with zero or very limited direct-to-consumer sales), the combination of venue, artist, and ticket broker (eg Ticketmaster) is already equipped to handle direct consumer sales. They're quite good at doing so and their entire business model revolves around maintaining this ability.
The scalper is just an added, unnecessary layer. If scalpers somehow disappeared completely today, then yesterday's sell-out shows will still be sell-out shows tomorrow.
Scalpers provide zero value to the transaction.
> They instead buy truckloads of tickets at retail prices
Clearly that's not true. Retail charges what the consumer is willing to pay. If the tickets were sold retail there would be no consistent arbitrage opportunity.
There may have been some point in history where artists tried to sell retail, which may be the source of your confusion, but nowadays these tickets are purposely sold below retail value so that they can sell out fast to the retailers, removing the risk at the origin.
Smaller/lesser known acts still have to focus on the retail market as there is no middleman willing to step in and take on the retail role, which may also be the source of your confusion, but that isn't the segment of the market we're talking about.
> Scalpers provide zero value to the transaction.
Aside from the value of knowing that all the tickets are sold, which is of enormous value. It is estimated that it costs around five million dollars to put on a single Taylor Swift performance. At that scale, things get scary fast if you find out that tickets still aren't sold at the last minute.
Markets are pretty efficient. It wouldn't happen if there was no value in it. Why would an artist give up the profits captured by the retailers if there was no value in having a retailer? They wouldn't, of course. Even if they have no personal need for even more money, that is money that can be used to better serve the fans. It is not given up lightly. It is given up because it is worth it.
>> And unlike a manufacturer like Proctor & Gamble (with zero or very limited direct-to-consumer sales), the combination of venue, artist, and ticket broker (eg Ticketmaster) is already equipped to handle direct consumer sales. They're quite good at doing so and their entire business model revolves around maintaining this ability.
Read that again.
Scalpers buy tickets at the same (retail) price that you or I do, from the same retail outlets that you or I also buy from.
They then raise the price.
The additional price of scalping adds no positive value to me.
(And to be very clear: I don't give a fuck if scalping adds value to the artist, the venue, the scalper themselves, or any entity other than myself. You can keep trying to persuade me to believe that I am motivated by something other than my own self-interest, but you'll just be wasting your time.)
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