Featured Research

from universities, journals, and other organizations

Scalping can raise ticket prices

Date:
July 25, 2014
Source:
USC Marshall School of Business
Summary:
A new study finds that resale markets like Craigslist can add value to tickets sold by concert venues and Ticketmaster.

Scalping gets a bad rap. For years, artists and concert promoters have stigmatized ticket resale as a practice that unfairly hurts their own sales and forces fans to pay exorbitant prices for tickets to sold-out concerts. But is that always true?

Related Articles


A new study by Victor Bennett, assistant professor of management and organization at the USC Marshall School of Business, along with colleagues at New York University and the Harvard Business School, finds that resale markets like Craigslist can add value to tickets sold by concert venues and Ticketmaster. "Cannibalization and Option Value Effects of Secondary Markets: Evidence From the U.S. Concert Industry" will be published in the Strategic Management Journal.

Suppose you are interested in a Bruno Mars and Pharrell Williams concert that is three months away. You're not 100 percent sure you'll be able to make it: what if you get sick, or what if you're traveling for work?

"If a customer faces too much uncertainty, he or she may be unwilling to purchase a ticket," Bennett said. "On the other hand, a customer who is reasonably certain of reselling the ticket on Craigslist may be more likely to purchase it. Such security increases the number of customers willing to buy from Ticketmaster, effectively bidding up the price."

You might also decide to buy tickets early from Ticketmaster if that Bruno Mars and Pharrell Williams concert is in high demand and might sell out, because tickets on Craigslist are going to be bid way up.

"For really hot shows, sometimes tickets are resold for five or 10 times their face value," Bennett said. "But on a show that hasn't sold out," he continued, "a lot of times the scalpers are just trying to make back as much of their money as they can, so they may even charge less than face value."

Concert tickets are resold regularly, Bennett explained, because ticket buyers decide that they can no longer attend or because the tickets were bought with the intention of reselling them or were released directly by an artist or promoter.

Websites like TicketsNow, StubHub and Craigslist make it extremely easy to match buyers and sellers. Bennett specifically looked at ticket prices to measure whether firms benefited from or were hurt by the entry of Craigslist, the leading classified-ad service in any medium and the ninth-most-visited website in the United States, with about 60 million unique U.S. visitors each month.

Through this study, Bennett determined that markets like Craigslist can impact prices in markets like Ticketmaster, but they do not always have the same effect. Following Craiglist's entry to the market, concerts by popular artists saw a significant increase in price, while those by less-popular artists saw a significant decrease.

"By 'most popular shows,' I mean the shows that are more popular than promoters thought they were going to be -- it's when the venues sell out," Bennett said.

If Lady Gaga plays in a 50,000-seat venue and she only sells 48,000 tickets, then markets like Craigslist don't help Ticketmaster. But they can help a small indie band that is playing a 100-seat theater and thought it was only going to sell 80 tickets but ended up getting on the radio and selling 150 tickets.

"The most popular shows are now making more money," Bennett said, "and that's kind of a rich-get-richer effect."


Story Source:

The above story is based on materials provided by USC Marshall School of Business. Note: Materials may be edited for content and length.


Cite This Page:

USC Marshall School of Business. "Scalping can raise ticket prices." ScienceDaily. ScienceDaily, 25 July 2014. <www.sciencedaily.com/releases/2014/07/140725144653.htm>.
USC Marshall School of Business. (2014, July 25). Scalping can raise ticket prices. ScienceDaily. Retrieved December 19, 2014 from www.sciencedaily.com/releases/2014/07/140725144653.htm
USC Marshall School of Business. "Scalping can raise ticket prices." ScienceDaily. www.sciencedaily.com/releases/2014/07/140725144653.htm (accessed December 19, 2014).

Share This


More From ScienceDaily



More Science & Society News

Friday, December 19, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Navy Unveils Robot Fish

Navy Unveils Robot Fish

Reuters - Light News Video Online (Dec. 18, 2014) The U.S. Navy unveils an underwater device that mimics the movement of a fish. Tara Cleary reports. Video provided by Reuters
Powered by NewsLook.com
Kids Die While Under Protective Services

Kids Die While Under Protective Services

AP (Dec. 18, 2014) As part of a six-month investigation of child maltreatment deaths, the AP found that hundreds of deaths from horrific abuse and neglect could have been prevented. AP's Haven Daley reports. (Dec. 18) Video provided by AP
Powered by NewsLook.com
How 2014 Shaped The Future Of The Internet

How 2014 Shaped The Future Of The Internet

Newsy (Dec. 18, 2014) It has been a long, busy year for Net Neutrality. The stage is set for an expected landmark FCC decision sometime in 2015. Video provided by Newsy
Powered by NewsLook.com
White House: Sony Hack a 'serious National Security Matter'

White House: Sony Hack a 'serious National Security Matter'

AFP (Dec. 18, 2014) White House spokesperson Josh Earnest says cyber attacks that ultimately prompted Sony Pictures to scrap the release of a madcap comedy about North Korea are a "serious national security matter." Duration: 00:35 Video provided by AFP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins