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0 points9rx3d ago0 comments

> 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.

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ssl-33d ago

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.

9rxOP3d ago

> 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.

ssl-32d ago

>> 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.)

9rxOP2d ago

> Scalpers buy tickets at the same (retail) price that you or I do

The game of semantics isn't going to get you far. You could equally say that scalpers buy same wholesale tickets that you and I do. The words "retail" and "wholesale" are useful to illustrate the market dynamic, but they aren't rules.

> The additional price of scalping adds no positive value to me.

The value to you is that artists like Taylor Swift can justify putting on a show that cost five million dollars, which is presumably the appeal. If the risk was all on her shoulders, why would she take the risk? There'd be no incentive to. That would be insane, frankly.

I mean, I'd personally much rather watch some unknown artist in a dingy bar that can't find a market that is willing to buy tickets, but if you're attending performances where these retailers are prevalent and tickets are worth thousands of dollars I expect you are going to be disappointed if it is no different than a dingy bar experience. The five million dollar spend is necessary to appeal to the audience. Ain't nobody dropping five million big ones for no reason...

And, well, if you are like me and don't care about those big shows then scalpers aren't even involved. They aren't touching tickets from small time, unknown artists even with a ten foot pole. In that case, sure, there is no positive value to you if you have no interest in seeing Taylor Swift in the first place, but in that case Taylor Swift herself doesn't provide positive value to you either, so who gives a shit?

> You can keep trying to persuade me

Of what benefit would there be in persuading you? You're not going to find any. This might be the most hilariously out of touch thing I've read on HN yet.

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