Dec 052007

Here is a development that seems like a logical progression in onslaught against all middlemen  – bands going after scalpers. We can probably expect producers of content to get testier at middlemen profiting from their efforts.

There are problems, though, for bands in their efforts to go after scalpers and middlemen services such as StubHub. Resellers of concert tickets have long been making a fortune, and have created a two-tiered concert system – the rich and well-connected paying what the market will bear by going to middlemen, and “true fans” (the younger and those with expendable time) paying in time by waiting on line or online for their face-price tickets. Because the young generally have more time than money, they dominate the second group. Bands can eliminate this two-tiered system most effectively by hiking prices to market rate. The dominant belief is that letting the market decide might work for Streisand and her fans who tend to be older and quite wealthy, but won’t work for bands with young followers and less disposable income. This dominant belief is wrong.

Letting market forces dictate ticket prices would certainly prove more lucrative for bands today who derive ever-increasing revenue from live shows as opposed to record sales. Enforcement against middlemen does not actually eliminate black market demand, but instead forces it into venues like Craig’s List, a bizarre online bazaar of shadowy and often dishonest characters hawking everything from clothing and furniture to scalped tickets and prostitution. Caveat emptor. Letting the market dictate prices would largely eliminate this black market, along with the counterfeiting that goes along with black market pricing. The fear that the wealthy are going to scoop up all the tickets is real but probably unfounded for most bands. After all, how many investment bankers are going to swamp the next Severe Torture show? The economics for a band with wide, cross-cultural and generation appeal (think U2), might be different, though. A market system would presumably drive prices into the stratosphere, and with wealthier and older crowds, U2 might need a different mix of enforcement and market to achieve the right profit-demographic mix.

The real winners of this new effort? The lawyers. Because music industry lawyers are seeking to enforce the fine print on the back of tickets giving them the right to dictate resale terms, ” (A) lot of lawyers are going to make a lot of money,” says the article.

  One Response to “Bands Collecting Scalps”

  1. The lawyers always win.

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