Don’t you hate it when you go to buy a concert ticket and the price suddenly jumps because of mysterious additional fees?
A new paper from Vanderbilt shows price mark-ups from online scalpers and those fees cost ticket buyers $11 billion per year.
Resellers
Ticket gouging is not new. It happened in the 1800’s when scalpers bought tickets to Charles Dickens book tour and then resold them for ten times the price.
The difference now is technology. Most tickets are bought online, and scalpers create algorithms and bots that can buy thousands of tickets in an instant and resell them all at a higher price. Primary ticket platforms often try to restrict this activity by having volume caps, but those are easy to get around with proxy IP addresses.
A new estimate from the Vanderbilt research estimates net resale price inflation costs ticket buyers $4.5 billion dollars a year alone.
Fees
Regardless of whether a ticket is purchased directly from the seller or a reseller, companies attach processing fees. In most states, there are no limits to the total amount of fees that they can tack on.
Additionally, fans don’t have anywhere else to go to buy tickets. A federal jury recently determined that Ticketmaster is a monopoly — a ruling Ticketmaster is appealing. Ticketmaster currently controls about 80% of major concert venues’ primary online ticket sales and also is a platform for secondary market ticket sales. So, if ticket buyers want to avoid fees, which are often hidden, inescapable, and tacked on at the last moment, they have nowhere else to go.
So, they bite the bullet and buy the ticket. The paper calculates that $20.4 billion in processing fees are collected each year, of which $6.8 billion of that is excessive.
Solutions
It doesn’t have to be this way. The research suggests a law banning online ticket brokers and capping processing fees at 10%.
Rhode Island, Vermont, Massachusetts, Maine and Washington D.C. have already passed laws that take some action to protect ticket buyers. The Vanderbilt research calls for greater action.
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