According to an article in the New York Times this past weekend, later this year Ticketmaster will begin auctioning off the best available seats for concerts that it is ticketing. According to John Pleasants, Ticketmaster's president and CEO, the fact that there is a thriving secondary ticket market suggests that concert tickets are unpriced today. Rather than put those additional dollars in the pockets of ticket brokers, Ticketmaster contends that those dollars should go to the promoters, venues and musicians themselves. Thus, Ticketmaster is going to offer its clients the ability to auction off tickets to their events. Pleasants calls primary market ticket auctioning the first step in "a new age of the ticket."
It is clear that Pleasants has a point about ticket pricing -- tickets to many concerts are unquestionably underpriced. Ticket brokers have long been the beneficiaries of that underpricing. More recently, eBay and other auction sites (like StubHub) have enabled a broader range of people to benefit from the arbitrage between a ticket's face value and its fair market value. With Ticketmaster's new pricing scheme, Ticketmaster's clients will be able to capture all of that value and in so doing derive greater return on the same limited number of seats, which venue operators will no doubt applaud. The same may not prove true of performers.
Ticketmaster's new pricing scheme ignores one important factor -- to my mind, rock concerts are as much about marketing as sales. Bands tour to promote themselves and promote record sales. While bands can certainly make a pretty penny touring, traditionally tickets have been priced so that they are accessible to their entire fan base, not just the richest groupies. Moreover, the poor fan with lots of time on her hand was supposed to have as good a shot at getting the best seats as was the rich guy with a big checkbook. I suspect that a band's loyal fans will not take kindly to rich folk buying up the front rows and leaving them to fight for the back of the house.
Perhaps the idea of the rock concert as marketing vehicle is an outdated concept and fans are willing to accept that tickets will sell for whatever the market will bear (if my recollection serves me correctly, Barbara Streisand was the first one who was willing to truly test the outer limits of market pricing and discovered that the prices for her shows were far more inelastic than anyone would have previously guessed). But you'd think that Ticketmaster would have learned from its feud with Pearl Jam almost a decade ago. There is something about rock concert tickets that elicits a visceral reaction from the ticket buying public. And if that reaction is an overwhelmingly negative one, variable pricing could easily backfire on the bands that first choose to implement it. If I were John Pleasants, I would roll out ticket auctioning very slowly and very carefully.
UPDATE: My brother emailed me after I posted this entry and told me that I was completely wrong. He argued that every time Red Sox ticket prices have been jacked up, fans have grumbled like crazy but always ultimately come back and paid the toll. Despite his firm belief that I am wrong and that there will be no backlash from concert ticket auctioning, he just sent me this article in which a number of sports venue managers state that they will not allow auctioning of their tickets. As the article concludes:
[T]he primary risk, according to Baker [of StubHub], Thomas [of Tickets.com] and team executives, is at the public relations level. Teams and venue operators are fearful of the perception that they are gouging fans.