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What sort of concert ticketing system needs to be in place to prevent scalpers from grabbing all of the tickets available and selling them well above face value?

  • Given the fiasco of LCD Soundsystem’s concert at MSG on April 2nd, how should bands identify real fans, give them access to ticket blocks first, and reduce the amount of value in the system that accrues to scalpers?

  • Answer:

    Paperless ticketing systems would be necessary to prevent unauthorized secondary market sales of tickets.  Ticketmaster has tested this system out whereby customers prove their purchase by showing a credit card and ID.  As a result, scalpers couldn't grab all the the tickets available and actually sell them to others since the end buyers wouldn't be able to redeem the tickets so they wouldn't value the tickets enough to buy.  The consumer surplus (the value difference between the price consumers are willing to actually pay and what they have to pay for the face value of the ticket) would be arguably a lot larger under such a paperless ticketing system.  However, it would also grant the original issuer a practical monopoly on the secondary market and possibly make some consumers worse off if there are greater fees for resale than today's fees. Without paperless ticketing, bands could also keep the status quo but set aside a block of tickets for purchase until the day of the performance and sell it at face value to people who will wait in line at the venue.  This method ensures that some dedicated fans can obtain tickets at reasonable prices.

Victor Wong at Quora Visit the source

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The reason the scalpers can profitably buy and resell tickets in the first place is due to inefficient and very crude pricing strategies. Normally the premium seats are under-priced relative to market demand, while the average seats (GA) are often actually over-priced.  Paperless ticketing only offers one way to disrupt the resale process by eliminating transferability... but there are ways around this. For example, the original buyer can simply accompany the fan to the entrance turnstile and scan their credit card.  The real way to choke off the resellers is to remove the pricing inefficiencies that create the profit potential, by introducing "dynamic pricing".. this is similar to auction pricing, where prices for premium seats are allowed to rise based on demand or bidding, and other seat prices may fall until buyers step in.  This technology is available and I think being tested now in certain markets.

Mark Palmer

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