Submitted via IRC for SoyCow1984
When Adele fans went online to buy tickets to the pop superstar's world tour last year, they had no idea what exactly they were up against.
An army of tech-savvy resellers that included a little-known Canadian superscalper named Julien Lavallée managed to vacuum up thousands of tickets in a matter of minutes in one of the quickest tour sellouts in history.
The many fans who were shut out would have to pay scalpers like Lavallée a steep premium if they still wanted to see their favourite singer.
An investigation by CBC/Radio-Canada and the Toronto Star, based in part on documents found in the Paradise Papers, rips the lid off Lavallée's multimillion-dollar operation based out of Quebec and reveals how ticket website StubHub not only enables but rewards industrial-scale scalpers who gouge fans around the world.
CBC News obtained sales records from three U.K. shows that provide unprecedented insight into the speed and scale of Lavallée's ticket scam.
Despite a four-ticket-per-customer limit, his business snatched up 310 seats in 25 minutes, charged to 15 different names in 12 different locations.
The grand total? Nearly $52,000 worth of tickets at face value.
Source: http://www.cbc.ca/news/business/paradise-papers-stubhub-1.4395361
(Score: 5, Insightful) by theluggage on Tuesday November 14 2017, @03:27PM (48 children)
Nice rationalisation... and if it was just a few tickets being re-sold to the handful of fans who would pay any price for a ticket it wouldn't be a problem. But in cases of large-scale scalping, the difference between the vendor's price and the market value is largely caused by the scalpers bulk-buying tickets, creating artificial scarcity and extracting extra money from people who had already decided to go to the concert based on the original price. If the original vendors upped the prices, the scalpers would respond in kind until the "sticker shock" decimated the number of people who even bothered to try and get tickets. Ultimately, the parasites will destroy the host and move on to the next one: of course, when the bough breaks, the scalpers will have made sure that they have all their assets in one limited company and all the unsold tickets belong to their creditors, so they'll live to fight another day.
Now, in nature, when a parasite kills the host then it risks its own extinction, but 2008 and all that shows us that "free" market parasites walk away unscathed.
(Score: 0, Troll) by khallow on Tuesday November 14 2017, @04:02PM (26 children)
(Score: 4, Informative) by sjames on Tuesday November 14 2017, @06:17PM (12 children)
The limited number of tickets isn't artificial, it's just a representation of the scarcity of physical space. Economically, the scalpers are rent seekers in fairly pure form.
(Score: 1, Disagree) by khallow on Tuesday November 14 2017, @06:57PM (11 children)
A representation is artificial.
Not if you decide to buy a ticket right before a sold out event happens.
(Score: 3, Insightful) by sjames on Tuesday November 14 2017, @07:12PM (10 children)
Let's skip the silly sophistry. "artificial scarcity" has a specific meaning and that ain't it.
Yes, even then.
(Score: 1) by khallow on Wednesday November 15 2017, @02:06AM (9 children)
But such representations are a routine way that artificial scarcity manifests such as with digital rights management. Let's consider the title of this thread, "Stop Buying From Scalpers". Why do people buy from scalpers in the first place? Because they are the sellers of last resort when everyone else runs out of tickets. The problem here is that tickets are in artificial surplus when they're first sold and artificial scarcity by the time the last minute people want to get in on a sold-out concert. Most of the problem would go away [wikipedia.org] with dynamic pricing similar to how airlines do it combined with partial refunds after a certain point close to the beginning of a concert (a refund to encourage people to turn in unused tickets and partial to generate some additional risk for scalpers trying to corner the market).
Or just sanction the activity and create a market where the ticket issuer auctions the tickets off and people can speculate on ticket prices to their hearts' desire. It's just not that big a deal.
(Score: 3, Insightful) by sjames on Wednesday November 15 2017, @08:21AM (8 children)
There's no such thing as an artificial surplus. There are N seats available and N tickets to go with those seats. No more, no less.
The part you're missing is that the scalpers CAUSE the seller to run out of tickets much sooner with the express purpose of causing prices to rise. They are an economic inefficiency. They are rent seekers because they get in between seller and the ultimate buyer and suck value out of the transaction without producing any value.
Do read up on rent seeking and why it is always (and I mean ALWAYS) bad for the market.
(Score: 1) by khallow on Wednesday November 15 2017, @02:27PM (2 children)
This is a counterexample. Scalpers bought underpriced tickets, thus in artificial surplus, well before the event, and sell them at market price later.
They exploited the actual economic inefficiency.
You still don't get why it's happening - bad market design. The key factor is dumping a bunch of tickets well before the concert. Plans aren't always made that early. Plans change. In a sensible market, one could pay more to get tickets even to the last minute.
(Score: 2) by sjames on Wednesday November 15 2017, @03:40PM (1 child)
Unless the band is taking a loss on the concert, the tickets are not underpriced. If there was a surplus, it was a natural one (more seats available than people who want to see the concert). In a perfect market, the tickets will cost not a single iota more than necessary to motivate the band to do the concert and pay the costs of it. That price will never be more than the price they freely offered the tickets at.
Inefficiencies in a market drive prices up. They're never a good thing, but they can't always be avoided.
(Score: 1) by khallow on Wednesday November 15 2017, @03:47PM
And when they freely offer those tickets.
(Score: 1) by khallow on Wednesday November 15 2017, @08:54PM (4 children)
(Score: 2) by sjames on Wednesday November 15 2017, @09:00PM (3 children)
That's just a surplus,. Nothing artificial about it (in the economic sense).
(Score: 1) by khallow on Wednesday November 15 2017, @09:09PM (2 children)
It's artificial in the same way that it is artificially scarce.
(Score: 2) by sjames on Wednesday November 15 2017, @10:18PM (1 child)
You really don't seem to grasp the concept of artificial scarcity vs. natural scarcity at all.
(Score: 1) by khallow on Thursday November 16 2017, @05:02AM
(Score: 2) by theluggage on Tuesday November 14 2017, @10:41PM (12 children)
There is a physical limit to the number of concerts a particular singer can put on. There is a limit to the size of a venue that you can reliably fill, and added value to smaller venues where the audience can see the star without binoculars. There is significant cost, and hence commercial risk, to putting on a large gig - and hence significant risk to over-charging for the tickets, not mentioning the long-term effect of having a half-empty theatre, or being perceived to be over-charging, on the star's reputation. That is real scarcity. Artificial scarcity would be only ever playing to a handful of millionaire fans...*
The scalpers are siphoning off money while producing nothing and bringing no benefit to the market and taking on very little risk - if they wreck the concert by leaving the theatre half-empty, who cares? There are other artists out there... Yes, they have to buy the tickets, but since they sell them way over the face value, so what if they don't sell them all - and that's being generous and assuming that the capital didn't come from advance fees paid by suckers who answered "make $$$ in your spare time" ads...
* Or trying to sell digital recordings at prices rooted in the days when they had to be expensively stamped out onto plastic discs in huge numbers and shipped around the world. Oh, wait...
(Score: 1) by khallow on Wednesday November 15 2017, @12:01AM (11 children)
Such as having tickets for those who didn't get them at the initial release. That is the benefit of scalpers.
I agree that there is market failure here due to the poor design of the market, but it is not solved by ignoring why scalpers exist in the first place.
(Score: 2) by Wootery on Wednesday November 15 2017, @09:32AM (8 children)
To who? All it does is replace early-buying fans by high-paying fans, with the scalpers pocketing the difference. It doesn't benefit the people behind the event itself, and it disadvantages the would-be early-buying-fan when the scalper gets in first.
(Score: 1) by khallow on Wednesday November 15 2017, @02:16PM (7 children)
Ok, so why don't you think that is a benefit? High-paying fans who made last minute plans shouldn't be allowed to go to a concert? What you're willing to pay for a ticket is a strong indication of your desire for that ticket. My working example here is airline tickets which implements a system called dynamic pricing so that people who make last minute travel plans have travel options, but they pay for that with higher ticket prices.
(Score: 2) by Wootery on Wednesday November 15 2017, @05:06PM (5 children)
It's zero-sum. I already asked you: where is the benefit in the high-paying fans being able to attend instead of early-buying (and possibly less wealthy) fans?
(Score: 1) by khallow on Wednesday November 15 2017, @08:23PM (1 child)
They get tickets for things they want. And keep in mind that this whole mess started because early-buyers have access to all the tickets.
(Score: 2) by Wootery on Wednesday November 15 2017, @09:45PM
That doesn't answer the question. Again you're ignoring that it's zero-sum. There's no reason to favour high-paying late-comers over ordinary customers.
There is no 'mess', there's just natural scarcity.
(Score: 1) by khallow on Wednesday November 15 2017, @08:37PM (2 children)
This a strong indication something is broken. The additional revenue from the people willing to pay more could either be used by the parties who are running the concert (band or venue) or given back to fellow concert goers in the form of cheaper tickets. It should not be zero-sum.
(Score: 2) by Wootery on Wednesday November 15 2017, @09:53PM (1 child)
Do you have a concrete scheme in mind?
(Score: 1) by khallow on Thursday November 16 2017, @05:05AM
Another approach is to do as the airlines do, dynamic pricing, where tickets increase in price as more are sold and the concert date approaches.
(Score: 2) by urza9814 on Wednesday November 15 2017, @05:34PM
Now that's just complete bullshit. That would only be true in a world without any significant income inequality.
Bill Gates could drop ten grand for tickets on a whim because it's Friday night and he's bored.
Someone who earns $50k/year can't do that, no matter how badly they want to go.
A better metric of how badly one wants to go is when they buy, not how much they pay. If you want the people who most want to go, look for the people that are *waiting* for that particular show, that are watching the band's website and social media pages waiting to see tour dates, who are willing to block out their calendar months in advance knowing that NOTHING could come up that's so important it would keep them from attending.
(Score: 2) by theluggage on Thursday November 16 2017, @09:39AM (1 child)
... only because the fucking scalpers got them all first!.
TFA is talking about 300 tickets bought up by just one scalper, who is unlikely to be the only one working that concert... Jeez, the self-justifying bullshit is beyond belief.
(Score: 1) by khallow on Thursday November 16 2017, @02:01PM
Scalpers came first, then the manipulation of this market.
(Score: 2) by Wootery on Tuesday November 14 2017, @04:57PM (20 children)
Nonsense. If scalpers can make money with their reselling, and if they can sell out their stock, that means the legitimate vendors could have charged more. It's really that simple. All that stuff about artificial scarcity is for nought.
No. Either the pricepoint is acceptable to the buyers, or it's not. There's no magic about scalpers that makes people more willing to spend big with them, compared to with legitimate vendors.
If the scalpers are selling out, that means the legitimate vendors could have still sold out if they'd charged the scalpers' prices.
It's the same thing with people buying iPhones from the Apple store on day 1, and re-selling them on eBay. It's just price-point.
(Score: 1, Informative) by Anonymous Coward on Tuesday November 14 2017, @06:12PM (5 children)
Such a simple "logical" argument, but it fails so very hard. The price points set for any event are based on the average price people will pay. Scalpers make their money off desperate people who do not represent the average. Do you even realize that your brain operates like a marketers? That you're willing to do bad things for money and then try to justify it by victim blaming?
Of course you don't
(Score: 2) by Wootery on Tuesday November 14 2017, @10:31PM (4 children)
And yet they still sell, so the distinction is meaningless. Anyway, sjames already posted a worthwhile reply re. the economics.
Nope. I dislike scalpers as much as anyone, but go ahead and project away.
(Score: 0) by Anonymous Coward on Tuesday November 14 2017, @11:01PM (3 children)
Sadly it is people such as yourself that keep the whole insane ball rolling. "Corporations are required to show profits!" "If you've got nothing to hide you've got nothing to fear!" Rationalizations for inherently irrational systems is the biggest problem we have today and it prevents people from changing things up. A small nudge into cynicism and derision for your fellow humans and you could easily switch sides, mentally you're already prepared to accept it. I wasn't projecting, but I was overly accusatory.
(Score: 2) by Wootery on Wednesday November 15 2017, @09:36AM
You're going to make up quotes then assign them to me? Have you heard of a 'straw-man'?
Some fine armchair psychiatry, even by Internet standards.
I should really stop replying to ACs.
(Score: 1) by khallow on Wednesday November 15 2017, @02:22PM (1 child)
I have to agree with Wootery. Sure sounds like you're projecting hard here. Sure, you have feelz. But you could have feelz some other way since you don't have a reason for why you have those feelz.
(Score: 2) by Wootery on Wednesday November 15 2017, @05:14PM
I'm coming to believe ACs have twice as much original sin in them as the rest of us.
(Score: 3, Insightful) by sjames on Tuesday November 14 2017, @06:36PM (10 children)
No. The scalpers are rent-seeking. The lower vendor price derives from an additional value the act derives from good will and having it's larger fan base able to afford the occasional concert. That includes the buzz created by concerts where there is a butt in every seat.
The societal benefit of markets derives from keeping the seller's price low. When instead, the buyer is kept near the pain point, all of the benefits of a market are lost. Scalpers are a HUGE inefficiency in the market.
(Score: 2) by Wootery on Tuesday November 14 2017, @10:28PM (9 children)
That's more like it!
If not price-point then, what technical measures could be taken? It's generally not well received to name-stamp tickets, but it would be effective.
(Score: 2) by sjames on Wednesday November 15 2017, @01:10AM (8 children)
Price point can work several ways. For example, setting a maximum mark-up/sewrvice fee. Setting a limit on re-sales might also work. It should be possible to re-sell one's own tickets should plans change, and perhaps with mark-ups limited, a consignment re-sale should be acceptable.
Inevitably, enforcement won't be perfect and loopholes will probably have to be addressed at some point, but it should at least take out the pros.
(Score: 2) by arslan on Wednesday November 15 2017, @03:04AM (1 child)
Yea.. using pure digital tickets and setting a limit on the resale value or an outright ban on increase in resale value (not the number of times one resell it) should work. If the ownership tracking and transfer is tied to the payment system then enforcement is done digitally. This will rule out direct cash payments of course.
On the lighter side of things, here's how to get this implemented.. find a VC near you and mention blockchain!
(Score: 1) by khallow on Wednesday November 15 2017, @02:56PM
Do we really want concert venues to be tracking people to the point that they're confirming who goes to concerts? Maybe we can have a "No Listen" list to ban the wrong people from going? I'm sure someone is doing that on a small scale.
But imagine what a disaster it would be for bands like Insane Clown Posse [wikipedia.org], which already has the problem that the FBI thinks their fan base count as a crime gang and that has legal consequences [rollingstone.com]:
[...]
[...]
[...]
(Score: 2) by Wootery on Wednesday November 15 2017, @09:28AM (5 children)
What do you mean by service fee? Scalpers aren't official resellers.
If it's possible to sell your ticket, that means it's possible for scalpers to stockpile and resell. I don't see that a limit would help - a scalper only needs to re-sell once.
Even pure-digital tickets (so that they can only be sold through the official online marketplace) aren't a panacea, as the scalpers will just take their fee outside that marketplace.
(Score: 2) by sjames on Wednesday November 15 2017, @03:44PM (4 children)
Typically, the ticket vendor (nearly always ticketmaster) charges a service fee. Another eaxmple would be a concierge service thet buys the tickets for you because you're busy, like to sleep late, whatever.
(Score: 2) by Wootery on Wednesday November 15 2017, @05:09PM (3 children)
Would that help stop scalpers? I don't see that it would, it just tweaks the way the price-point works out.
(Score: 2) by sjames on Wednesday November 15 2017, @08:50PM (2 children)
With mark-up limited, there's a lot less money to be made and a lot less damage to be done. Requiring agency rather than simply buying a stock of tickets prevents the creation of artificial scarcity.
(Score: 2) by Wootery on Wednesday November 15 2017, @09:50PM (1 child)
But it doesn't limit mark-up. The scalper will just insist on cash to initiate the transfer.
(Score: 2) by sjames on Wednesday November 15 2017, @10:16PM
And then the undercover agent cuffs him for an illegal mark-up.
(Score: 1) by khallow on Wednesday November 15 2017, @02:30PM (2 children)
For some of the tickets. The key here is not that all the tickets could be sold for more, but rather that some can. This is the whole reason for dynamic pricing of tickets in airline flights. As the date of the flight nears, the price of the remaining tickets for sale increases.
(Score: 2) by Wootery on Wednesday November 15 2017, @05:12PM (1 child)
But if that really was 'best for the event' as it were, wouldn't the event arrange for high-price last-minute tickets?
Similar to as I was saying in my other comment, it seems the way events are run favours non-wealthy fans who by their tickets early. Why change this? I see no reason to favour last-minute buyers over early buyers, and no reason to think the scalpers are helping anything by pocketing the difference.
(Score: 1) by khallow on Wednesday November 15 2017, @08:26PM
You already have your answer, no. Scalpers wouldn't exist in the first place, if there wasn't a demand for them.