Live event ticket prices are a mess.
On the one hand, Ticketmaster and LiveNation have highlighted, much to the chagrin of consumers and fans, a “huge opportunity”: they think ticket prices are too low. On the other, a Congressional probe aims to investigate “potentially deceptive practices” in the industry. There are companies working to facilitate resales at no more than face value, and secondary marketplaces that thrive on the opposite of that approach.
But these are all responses to symptoms. No one is addressing — few are even able to address — the root cause of the problem.
Maureen Andersen, President & CEO of the International Ticketing Association (INTIX), is a ticketing icon who cares deeply about the industry and its future and has been advocating for a cultural change. In almost every presentation I’ve seen her give, she points to one singular phrase as the root cause for all the ills in ticketing:
“There are no refunds or exchanges. All sales are final.”
This has been the industry operating mantra for decades — it is the root cause of many of the issues we see and experience in ticketing today.
Let’s analyze this in a bit more detail. Why has this been the standard under which ticketing has operated? It has to do with the notion that once the ticket is sold by the initial issuer (the primary, to use industry parlance), there’s no way of knowing, with any real degree of confidence, if the original purchaser is the same person that attends the event. There is simply no visibility into the life-cycle of a ticket. The phrase above implies a general business decision that the cost of a flexible sales policy outweighs the benefits (financial or otherwise).
Many have seen the inflexibility of primary ticketers and arbitrage pricing as a perfect opportunity. Enter brokers, scalpers, and the secondary market. Their business calculus is essentially the opposite: They see the benefit of being flexible and decide to take the risk for a chance at a profit. The inflated prices found on the secondary market lead some to argue that the original ticket issuer should just price their tickets in accordance with the market.
Ah, but that view omits a significant complication — many of these venues, performers, and artists that ticket live events have a mission that goes beyond profits. Imagine you’re a large non-profit venue in a major metropolitan area whose mission is to make performances available and accessible for the community. When a high-demand show comes to your theater, you’re now in a catch-22. If you price tickets inline with the market, you can’t accomplish your mission. If you tier your pricing to accomplish your mission, the tickets below market value will be exploited. What do you do?
The solution is simple to understand but has been almost impossible to do technically — until recently. The move to digital as well as the advent of emerging technologies has finally brought it within reach.
It entails providing the original issuer the ability, at any given point in time, to know who has a ticket and how they got it. The added twist is that the solution needs to provide that confidence in an open distribution environment (centralized monoliths like Ticketmaster already exist, albeit with mixed results). While all this does not directly involve pricing, it does have significant implications for it. This is what we’re building at True Tickets: a solution that solves this problem in an open distribution, multi-system environment.
What does this mean for pricing? Options and flexibility. When a primary issuer of tickets can know and manage who has a ticket and how they got it at any point in the life-cycle, they can be more flexible. It means they can sell the same seat for different prices with different conditions, much like the airlines do with basic economy and other fares.
Imagine having the option to buy a ticket for Dear Evan Hansen for $25 or $200 for the same seat. The catch is that the $25 ticket is non-transferable, non-refundable, and all issues must be handled in person at the box office, while the $200 ticket has no restrictions (unlimited transfers or resale). You get the idea.
As ticketing becomes digital, we can question many more assumptions about how the industry operates. Most importantly, we can now solve the root cause of an issue, not simply treat the symptoms.