
Louis C.K. sees ticket scalping drop over 96% by selling tickets himself - andymboyle
http://thenextweb.com/media/2012/07/03/louis-c-k-sees-ticket-scalping-drop-over-96-by-switching-to-selling-tickets-himself/
======
cletus
This is of course interesting and will lead to inevitable comments about
disruption being needed in event ticketing.

Let me save you the trouble as this has been rehashed many times already: the
problem here is Ticketmaster's exclusives on venues and the entertainment's
willingness to let Ticketmaster be the "sacrificial anode" and focus of ire
from both audiences and performers.

There was a deal done some years ago--I forget the name--whereby performers
would get 90% of ticket sales.

The way around that is not to increase ticket prices but to add "fees". Online
transaction fees, mail fees, processing fees, booking fees, you name it. The
fees in some cases are approaching the ticket price. Ticketmaster does this,
splitting the proceeds with promoters and venues while the artists get a 90%
cut of an ever smaller part of the pie.

Ticketmaster has multi-year exclusive deals with venues such that none can
really afford the attractive cuts they get to "go it alone".

IMHO this situation has reached the point of requiring government action as
this is now an antritrust issue (the ticketing market basically cannot
function now).

Until that happens any ticketing disruption is doomed.

~~~
vijayr
"Ticketmaster's exclusives on venues"

Sorry for the dumb question - does this mean that nobody else can book these
venues?

If that is the case, can't CK (and other comedians) find a neutral venue (or a
venue that is not already on Ticketmaster's list)? At least in his case, he
doesn't need sophisticated venues (like the ones need for an opera, or a
circus for example)

Also, for disruption - can't a company _buy/build_ a venue, and pitch it as
"just pay the rent, and you take care of ticket sales and everything else"
model?

~~~
dsl
Effectively. You can still book venues, you just can't sell tickets to your
event without Ticketmaster being involved.

A company called Livenation went around about 10 years ago and bought all the
venues large enough to hold a profitable concert or show, then a few years
back merged with Ticketmaster.

Livenation won't sell you one of their venues. Building a new one large enough
to be profitable is near impossible. It's not just a building, its massive
parking lots, planning and building commissions, working with local police for
traffic management, unions for load ins/outs, getting sizable power feeds from
your local utility, multi-million dollar sound systems, concessions contracts,
medical services, etc., etc., etc.

~~~
beedogs
Does this mean that Ticketmaster runs the risk of overextending itself and
collapsing in a heap, the way Clear Channel did after buying up hundreds of
radio stations throughout the 90s and early 00s? (ihopeihopeihope)

------
mhartl
_For his shows, C.K. saw scalping rates as high as 25%, driving up the price
of his shows for people who wanted to attend, by those who didn’t._

The only people driving up the price of the shows are people who want to
attend. How could it be otherwise? People who _don't_ want to go to the show
certainly don't raise prices. If scalpers can profit, it means you aren't
charging market price. Policies like the one described in the OP simply shoot
the messenger.

If the market price is too high for some fans, have a lottery with an
aftermarket. Once they see the market price, low-income lottery winners can
decide whether they'd rather attend the show or sell the tickets to pay the
rent.

It's not like these issues haven't been studied before. Do a few web searches,
or consult an economist. If you don't accept that your naive economic
intuition is wrong, you're going to make stupid decisions that often
exacerbate the very problems you're trying to solve. (I'm looking at you,
Burning Man.)

~~~
Androsynth
yeah I'm confused, isn't scalping a necessary side effect of the process? It
seems natural if you sell tickets at a constant price over time and don't
adjust that for higher demand (as event gets closer in time) or lower supply
(as tickets are sold).

Also, is scalping a bad thing? It seems to me that they are making the market
more efficient.

~~~
joezydeco
Scalping confuses demand.

If 1000 people want to see a show in a theatre with 1000 seats, that would be
an ideal market. But in reality you get 2000 people trying to buy tickets for
that show. 1000 are the fans and 1000 are people trying to buy the tickets to
flip them for a profit.

The artificial demand creates a market that benefits nobody except the
scalpers. The fan loses by paying higher prices, and the artist loses
(sometimes) by leaving money on the table. This is why Madonna and the Eagles
are charging $750 for front row seats.

~~~
Androsynth
But if the customers are willing to pay the scalpers price, that means the
demand exists.

You say 'flip them for profit' as if thats a bad thing, but as long as people
buy those tickets, its just smoothing out the market.

~~~
drivingmenuts
This is the artist himself saying that he'd rather have true fans in the seats
at a reasonable price, rather than have the tickets snapped up by the asshole
with the biggest wallet (not sorry for editorializing, that's the politest
version of my view of scalpers).

The add-on effect he's looking for is fan retention over time. If 500 people
bought from a scalper at some much higher price, there's a small chance that
they will become disgruntled and stop being fans. In the long term, he could
lose that business.

But if he himself levels out the market, the fans have less to lose. Sure, the
artist takes a hit, but that's on him. He can always do something different
next time if he's dissatisfied with his revenue.

Remember that this is a guy who made so much money the last time, that he was
somewhat nervous. I don't think he's thinking about it the same way you are.

As for "not doing anyone any favors": way I see it, he's doing his fans a
favor by keeping the ticket prices affordable.

~~~
Androsynth
So true fans are poor? What does having a fatter wallet have to do with your
taste in comedy?

Also, fans don't work the way you think they do. If I like Louis CK, _I like
Louis CK_. If he chooses to charge $500 for a ticket, I will just watch him on
TV. It won't cause me to resent him.

In a perfect market, if enough people feel the same way, the price will drop
down into the range that I am comfortable paying. If, on the other hand, he
has so many fans that some are willing to pay exorbitant amounts to see him
live, I will be forced to watch him on TV.

If he wants to give everyone (rich and poor) the chance to experience his set
live, he needs to increase supply by touring more.

~~~
masklinn
> So true fans are poor?

No? True fans are alone, and true fans are not necessarily the earliest at the
gate. If scalpers can grab half the tickets before the show's sold out by
buying in bulk, they're going to make a lot of money. Because now they control
the product.

> he needs to increase supply by touring more.

He's booked 67 dates, he's only one guy, touring more? He'll need to put his
million of sales in cloning if he wants to do that.

But he's at least found a way to keep control on prices and scalping and give
everybody equal opportunity.

~~~
adgar
> true fans are not necessarily the earliest at the gate.

If we're going no true scotsman, I'd say the true fans ARE the earliest at the
gate. They're the ones who camp out for weeks.

So really, you're sticking up for the fair-weather fans who can't be bothered
to put in the extra effort to get their tickets at face value.

~~~
pessimizer
And you're sticking up for the fair-weather fans who aren't willing to take
out a second mortgage on their homes.

Also, "true fans are not necessarily the earliest at the gate" is not an
example of No True Scotsman, it's an example of Some True Scotsmen, the exact
opposite.

------
3JPLW
It seems as though the important part here wasn't so much that he sold them
himself as it was that he added the following clause:

 _"You’ll see that if you try to sell the ticket anywhere for anything above
the original price, we have the right to cancel your ticket (and refund your
money). This is something I intend to enforce."_

This is something that any middleman could do, too... but the incentives
simply aren't there for them to prevent scalping. Especially as Ticketmaster
has its own resale site, TicketExchange.

~~~
pyre
I guess what it really comes down to is: How does he know which ticket is
being sold? I imagine if a scalper wants to avoid detection, they just don't
give out specific information until the sale is final (banking that Louis CK
won't buy their tickets at scalper prices just to find out which tickets to
cancel).

If the ticket has some sort of ID, avoid giving that out before the final
sale. If the ticket has a seat number, just state the general area of where
the seat is rather than the specific seat (until final sale).

~~~
defen
Switch to will call only; require the original CC or photo ID to pick up
tickets. He explicitly stated on the ticket purchase page that this was a
possibility.

~~~
pyre
That would be bad for the people that sold their tickets for face value ($45)
to recoup costs, though. He has no way to know what the resale price was once
someone shows up at the door with the tickets.

------
Retric
Scalping always seemed like a mismatch between the ticket price incentives and
the venues incentives. Venues like to sell out to increase concession sales /
parking etc, but 'talent' is better off picking a price that fills, most but
not all seats and maximizes their take. I suspect they also increase their cut
by selling tickets early and sitting on a few weeks/months worth of interest.

~~~
cron
Building hard core, committed fans is probably more valuable in the long term
rather than maximizing profits from ticket sales.

------
TylerE
Seems like a fair way to do it (while still extracting lots value), would be
to a sort of dutch type auction. E.g. theater seats 1000, so you take bids for
the max people are willing to pay.

Then, once that closes out, you take enough people to fill, say, the first 5
rows off the top of the list, and charge them whatever the _lowest_ winning
bid is of the people in that group. Repeat for each tier going back until the
venue is sold out.

This actually tackles the inefficiencies at both ends - people willing to
splurge on great seats get them, but if a show is not high in demand, you
might still get people who kind of want to go to pay, say, $5 for the
nosebleeds.

------
pkulak
What happens if someone does sell one of these tickets for over face? Will it
get cancelled, the scalper refunded (in addition to the sale value), then the
person who bought it gets screwed?

~~~
trickjarrett
The terms during purchase made it sound like if they discovered a ticket was
sold for higher than $45, then they would cancel the ticket without refund. So
both buyer and seller get screwed.

~~~
chwahoo
This doesn't match the text on the site: "If the ticket is found to be offered
for resale above face value we may invalidate the barcode and refund the
ticket price."

~~~
droithomme
It's not clear who gets the refund here. If the scalper, then he has no risk,
and earns both the money he sold it for AND the refund of the original fee.
Win! This is also likely the only refund they can do since they don't have the
credit card number of the person who bought the scalped ticket.

If they refund the final purchaser, then the scalper still makes his money and
the purchaser loses the amount above the face value.

In both scenarios, the scalper makes his money, or even more than he would
have otherwise.

~~~
vacri
If the final purchaser is aware that their high-price ticket could be
nullified at the door, it removes motive to buy in the first place, leaving
the scalper with hard-to-move tickets.

------
toddmorey
I love that he's shaking things up. However, he needs to find a better partner
to work with on the technology side of things. I tried to purchase tickets for
one of the shows listed as available, and it then told me it was actually sold
out. Another show let me get further, but then told me my session had already
expired (less than 1 min later). Finally, I was able to select ticket options
and no 2 adjacent seats were available. It was a lot of effort to discover
what they could have told me on the show listing page, and I don't want to
spend all the time it would take to check all the other shows.

~~~
Androsynth
Contractors not dogfooding their apps is common. I would think that if you
sent that exact paragraph to him through some sort of feedback/contact form
from his website, he may actually realize that there are some poor UI flows.

------
qq66
Isn't a ban on scalping a violation of the First Sale Doctrine?

~~~
trebor
IANAL, but I believe a ticket to attend an event is different from a CD or
record. First Sale states that when you buy something like a book or CD, you
have full right/control over what happens to it. But I believe that Louis has
the right to revoke a ticket, making scalping virtually impossible.

I would like to know what a lawyer says about this, though.

~~~
TylerE
If you ever read the 2pt font on the back of a ticket, you'll find that what
you have bought is in fact a ticket _license_. The physical ticket itself is
just for convenience, what you're paying for is the right to attend.

------
pyre
Sounds to me like:

1) Louis CK isn't big enough for scalpers to care about going through a non-
traditional method of obtaining tickets.

2) People that would turn to scalping to recoup their expense when they can't
go are just going back to Louis CK for a refund.

Personally, it sounds like offering a full refund also comes with the
possibility that scalpers will purchase the tickets because they can easily
flip them back for a refund (an $0 loss sans time spent) if they can't sell
them for a profit. I admit that I know nothing about the 'event ticket scene'
so I may be missing something.

~~~
nollidge
Did you read it? #1 is invalidated by the fact they're comparing his shows
(sold traditionally) vs. his shows (sold independently), not his shows vs.
others'.

EDIT: nevermind, I get it now.

~~~
tikhonj
The thing is that his shows sold traditionally are sold exactly the same was
as plenty of other tickets, through some big site. So, as a scalper, you just
trawl through Ticketmaster (or whatever site in question) and buy tickets that
look promising. You have your existing process and it works on tickets for
anything sold through the site.

When an individual performer stops using the site, the only scalpers are going
to be the ones familiar with the performer. That is, the sort of scalper that
just goes through all the shows on Ticketmaster won't even realize that these
tickets are an option--only somebody following Louis CK would.

Even if some scalper does realize, a relatively small show (I don't actually
know the size of Louis CK's shows, so I'm just assuming they're not too big)
will not be worth changing your process for. You would have to spend a
significant amount of time figuring out the restrictions of the custom site he
is using and how to best profit off them--there is no guarantee that this time
would be worth investing.

This is basically like a small site using a custom CAPTCHA as compared to
using a very common one. Spammers aren't going to bother with your site in
particular, but if you use a common CAPTCHA they know how to deal with, they
will spam even tiny sites.

------
larrys
"You’ll see that if you try to sell the ticket anywhere for anything above the
original price, we have the right to cancel your ticket (and refund your
money). This is something I intend to enforce."

How? He doesn't claim that he will check id's for all sold tickets (he says he
might) and he may not be on strong legal footing to take a chance and deny
entrance to someone who shows up with a ticket that they purchased.

Using stubhub as an example I'm wondering what the connection is legally
between a representative from louisck seeing a particular seat is for sale on
stubhub and then cancelling the ticket making the assumption of course that
the person buying the ticket posted it there (and it's not a typo or other
error or even some kind of "denial of seat" attack against the true
purchaser).

"Tickets may not be resold for any amount above face value."

How is that going to be enforced? What is the cross check between a particular
seat and proof that a ticket was sold for a higher amount?

Edit: Also what happens if you want to buy a ticket as a gift for someone? How
can it be proven that a ticket was not a gift and that it was resold at a
price higher than face value?

------
todtown
I've read this entire thread with great enthusiasm, and I am about to make a
comment that will probably be scoffed at by the majority of you. However,
where does ethics and morality factor into the good/bad of ticket scalping? If
it was NEVER the artist's intention to have their tickets resold, and the
scalper does it anyway, then regardless of who benefits or who doesn't, is it
still ethical? And if not, should it be practiced?

------
scotty79
Why not just sell the tickets via Dutch multi-item auction with bidding. If
auction ends sufficiently close to the event scalpers can't get much profit
from rich fans because they don't have much time to find buyers and price at
what they bought tickets is closer to the market value. Also scalpers coul
only sell for profit only to people who didn't attend the auction or decided
to pay more then they declared during auction.

~~~
cbr
> Dutch multi-item auction with bidding.

Some events fail to sell out because they were priced too high, but others
don't sell out because there's not enough interest. So you'd need to set a
price floor.

> If auction ends sufficiently close to the event...

People don't know whether they've gotten in until after the auction ends. End
it close enough to the event and people are unhappy they can't plan.

~~~
scotty79
You can set minimal price in multi-item auction. You don't have to sell out
for auction to end. And you don't have to sell for zero if there are not
enough buyers.

As for the second argument, I don't suggest ending it minutes or even hours
before the event. Rather days or weeks. The point is that all people who want
to go can declare how much they are willing to pay beforehand and if their
best offer gets beaten by scalpers, the scalpers won't profit by selling
tickets for more money to them just before the show.

My suggestion is not to remove scalpers altogether but limit their
opportunities for earning and helping artist extract some of the additional
wealth that currently goes to scalpers. Those scalpers that remain would
provide legit service of providing tickets to people who couldn't attend an
auction.

~~~
masterzora
Even days or weeks is insufficient. If I buy tickets to an event four months
from now it is usually incredibly easy to arrange an affordable flight, for
example. Or if two mutually exclusive events I am interested in have tickets
go on sale at the same time right now I can pick one and purchase a ticket. If
they are sold out I can pick the other event instead. With this system if I
enter the auction for only one and do not win then I am screwed for the second
one as well. If I enter both auctions I run the risk of purchasing both
tickets.

I can imagine some other, more subtle planning issues that arise as well. Not
that the system couldn't work but I think it would make for a terrible
standard model.

As a sort of side-note you talk about helping the artist extract some of the
money they are leaving on the table. I don't it's fair to assume that they are
leaving the money there because they can't figure out "hey, if people are
successfully scalping then I could make more money by charging more!" They
have to look beyond a single transaction and keep in mind lower income fans
that they still want to please, for example. Such fans would inevitably lose
the auction for any show that sells out but some of them actually get to
attend the show with the current structure.

~~~
scotty79
> If I enter both auctions I run the risk of purchasing both tickets.

This might be mitigated by allowing people to sell their tickets after
auction. They'll be doing that anyway so you could even provide them with
platform to do this hassle free.

> Not that the system couldn't work but I think it would make for a terrible
> standard model.

I think current system is much worse. The only good thing about it is that
people can get cheap tickets to really great events fast if they are dedicated
enough to stand in line for hours right after they begin to be sold. But
that's the loss for artists because is such cases they sell tickets for too
low price. Other than that only the fact that you theoretically can get
tickets early and you have a lot room for planning. Current system is terrible
for people who can afford to buy tickets from scalpers because the scalpers
basically freeload on them by snatching tickets and keep them long enough for
demand to build up and for price to raise.

You don't have to sell all tickets via the auction. You can gift some to fan
associations. Distribute some through lottery. Or even keep some to sell at
whatever price serves your purposes just before the show.

What auction would do and what is its greatest value in my opinion is giving
the artists (and everybody else) estimate of how high the demand is and adjust
price automatically.

------
pbreit
The entertainment industry an ticket scalpers have a very healthy symbiotic
relationship. Industry gets to sell tickets at fan-friendly prices and rich
people get to go to the shows they want to. There is absolutely nothing wrong
with that. And I have no problem with this experiment.

------
jyu
Couldn't someone start an alternative ticketing method using this as a model?
Proactively squash scalping, select alternative venues, and only sign artists
who have big email/twitter/facebook fan bases.

This way, you can avoid the big chicken/egg initial distribution problem.

------
melvinmt
This all makes me wonder: why don't we have scalpers for popular plane
flights?

~~~
Steko
You mean people that buy blocks of tickets not for personal use and then
resell them? We call them travel agencies.

------
barbs
Did anyone else find the whole "left and right arrow keys to browse articles"
on this site really annoying? I accidentally hit them when pressing up and
down to read the article itself.

------
paulsutter
Ticketmaster IS the scalper. Ticketmaster is the party listing the tickets on
Stubhub.

The whole system is indeed a mess. Legislation may be the only way to get
things unstuck.

------
alanbyrne
Louis must have spent an absolute mint on Paypal fees...

~~~
mrtron
... in order to facilitate the shift away from other ticketing systems that
probably cost him 10x?

------
agotterer
How are they planning to police scalping?

------
erpa1119
Sounds like ticketing is ripe for re-invention, how about electronic tickets
via smart phone?

~~~
roc
Ticketing has long been ripe for re-invention. The big problem is that
TicketMaster has anti-competitive contracts with most popular venues.

Louis CK, in trying to do his own thing, is facing largely the same troubles
Pearl Jam did in their own effort to end-run Ticketmaster: they're forced to
play, in many cases, massively smaller venues. And that winds up excluding
more fans than TicketMasters' fees and scalper's artificial price-hikes ever
excluded.

As for scalping itself, it can't be "solved". Any feasible system needs to
allow tickets to be transferred or gifted in some manner. [1]

And as soon as you do that you've provided the mechanism whereby a secondary
sales channel can allow party A to sell party B a promise to transfer the
ticket for above-face-value.

[1] To cover people buying X tickets for a giveaway, or one person buying
tickets for a group, or people giving tickets as gifts, or people giving
tickets away to a show they can no longer attend, etc.

~~~
ebrenes
I like the ideas.

Personally, I would set it up as follows:

1\. Have a fixed price for non-transferrable tickets, which are identified by
ID/CC or sent to a specific mobile device with a QR code or something. These
tickets will be refundable.

2\. Have a variable price for transferrable tickets, and use an auction type
system. These tickets can be transferred but the user must go through the
auction and there's a sufficiently long auction period to purchase them. These
tickets are not refundable.

