The Economics is Flawed

Most economists agree that ticket scalping is only profitable because event organisers aren’t charging high enough prices. Because the price is too low, people demand many more tickets than there are actual tickets supplied.

In other words, what they are saying here is that it is the event organiser’s fault that Ticket Scalping occurs. The Event Organisers want to give as many people a chance to see a show or event, so they DON’T set the top ticket prices at astronomical amounts (at which only people like the Prime Minister can buy on his/her salary). Event Organisers in Australia try to cater to working people and people with savings or who otherwise have “money” in reasonable amounts to spend on an event.

Click HERE to say how much YOU would pay for a Ticket

It would be a shame, we think, say, to set the minimum price for C class tickets to the David Attenborough shows at $500 each, which would obviously price out many of his greatest fans.

Apparently, the statement above attributes the demand exceeding the supply to be caused by the low prices of the tickets! Say the minimum priced tickets are sold by the Event Organisers for $2,000 each, well then, that would limit the number of people buying the tickets to those whom have a spare $2,000 to spend on a show.

But the bad Event Organisers, by pricing the tickets, say from $95 to $235 (as happened with the tickets to David Attenborough’s talks), are giving the chance to many thousands of people around Australia whom can afford between $95 to $235, to get in quick and purchase a ticket or a few. Apparrently, according to some economists, there are just too many damn people around Australia with a spare $95 to $235 , and the number or amount of them far outweigh the number or amount of tickets available to the DA shows. The Ticket Scalpers leap in and buy numerous tickets which they then kindly offer to sell to those with alot more money than $235, thus cashing in on the desperation of fans willing to spend any amount on a ticket.

The people of Australia would be ALOT happier if the ticket prices to shows were, say, one million dollars each, thus ensuring that the demand equals the supply, given that we have nearly 200,000 millionaires in Australia. (We are being sarcastic here). In this way only, would equilibrium be reached, and the Economists and the Millionaires would be happy at least.

THE EVENT ORGANISERS WILL HAVE BEEN FORCED TO MAKE THE DEMAND EQUAL THE SUPPLY.

NEVER MIND, GIVING AUSTRALIANS THE “AUSTRALIAN FAIR-GO” CHANCE OF BEING IN THE POOL TO TAKE THEIR CHANCES TO BUY A TICKET AT A REASONABLE PRICE.

Ticket scalping is only profitable because event organisers aren’t charging high enough prices. Because the price is too low, people demand many more tickets than there are actual tickets supplied.

What a load of poppycock.

FACTS

1. For every show / event there are a particular quantifiable discrete limited number of seats (and shows /events / performances).

2. For every show / event there are a particular number of human beings at that point of time, whom would really, really like to go and see the performance.

3. It would be nice (and ethical) if those who really want to go and see a show could have a chance of buying a ticket at the selling price by the authorised vendor (seller).

4. Yes, of course, some people who want to see an event, may miss out (on an authorised ticket at the Vendor’s price, at their preferred level or Class of ticket, or for any Class of ticket). This is to be expected, because performers are not magical and can’t sing or perform endlessly, thus cannot always meet the true demand. It’s similiar to some people missing out on getting onto a crowded train. It is no use crying or getting angry because the supply does not meet the demand.

5. Some sellers, like Cricket Australia, DO actively take steps to try to ensure equitable and authorised distribution of tickets.

6. Are tickets commodities, just like Barbie dolls or computers or anything else that can be on-sold? Deborah Healey, a lecturer in law at the University of New South Wales, and a member of the CCAAC (Commonwealth Consumer Affairs Advisory Council) panel says the following:

“A ticket is a right to enter. It’s not a good. The seller can put whatever conditions they want on it, as long as that condition is legal.” Importantly, a ticket is a contract between the consumer and the seller of the ticket, and any breach of that contract – such as breaking a condition that forbids on-selling – can lead to the cancellation of the ticket (if the condition has been incorporated effectively into the contract at law).”

7. We live in a laissez-faire (capitalist) market economy – meaning it is quite okay to want to make a profit.

8. Although all the above apply, it is not ETHICAL to buy tickets to STRICTLY LIMITED ONE-TIME shows / events / performances wholly & solely to try to sell the Tickets at a huge profit; thus denying some people from buying them because they didn’t get in quick enough before the scalpers; or because they don’t have enough money to pay the scalpers’ exorbitant prices.

Tickets to performances are obviously quite a different category to other commodities, because they pay for a person to be entertained live, and are thus very unique and special, and the entertainment is not static (un-changeable), like other “commodities” are – meaning a gold ring is still a gold ring 50 years after it is bought – but a live band DOES change 50 years after its live show, as far as I know. Just because a ticket scalper CAN buy tickets and try to sell them at a profit, doesn’t mean that it is ETHICAL for them to do so.

9. “Stop Ticket Scalping in Australia” and its supporters are NOT happy to support the prices of tickets by authorised sellers being raised to $1,000,000 each.

10. Ticket scalping CAN be made illegal for any event that tickets are sold for. It may not be able to be completely enforced but making it illegal would be a big deterrent, given that consumers could be on the look-0ut for it, and report it. Although ticket sellers like Ticketek have terms and conditions that actually include that their tickets cannot be on-sold for a profit, there is currently no Australia-wide law actually making it an indictable offence for ticket scalpers to on-sell them for a profit on-line.

UPDATE: March 2014

The Australian Senate Economics Reference Committee has just released its Report on findings about Ticket Scalping in Australia. On page 17 under “Effects of Scalping” it states the following.

2.16 The Coalition of Major Professional & Participation Sports (COMPPS), which represents Australia’s premier sporting organisations, maintained that scalped tickets do not necessarily reflect the fair market value of the ticket. It argued that ticket scalping distorts the market—scalpers buy tickets in bulk and on-sell them, which often creates a false demand. COMPSS stated:

If scalpers had not purchased the tickets in the first place, there would be no need for such inflated prices as the sports would still have the tickets to sell at face value price to fans.

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Also, look at the Page on the left titled “Legislation and Reports” – important info.