Taylor Swift’s sold-out Eras Tour has caused a huge shock in the ticket resale world, leading some fans to pay thousands of dollars even for those nosebleed seats.
In response, lawmakers across the country are taking action, including here in Texas.
This week, Governor Greg Abbott signed a bill that would prevent the use of bots in online ticket purchases – all in hopes of opening up more seats for fans and cutting into the business of the scalping.
As for the success of the legislation, Texas Standard spoke with an economist and Bloomberg columnist Allison Schrager. Listen to the story above or read the transcript below.
This transcript has been slightly edited for clarity:
Texas Standard: You know, I think this is a problem that goes way back in concert history. I remember back in the 80’s ticket resellers were a hassle and they would pick up the first tickets at the door. It feels like a war that has been going on on some level for decades.
Allison Schrager: Well, yeah, I mean, there’s this inherent problem that some concert tickets are just…a lot of people want them and they’re in very limited and limited supply. So you just have this excess demand and prices want to go up. And ticket resellers are the ones who tend to fill that role.
So what about this idea of regulating ticket sales by banning ticket buying bots? Are other states doing this, and what happens if they do?
Well, not too good, because the point is that you can ban bots, but there is such a return on investment to get tickets and then sell them on the secondary market. They’ll probably find another technology, another way around it. You know, there will always be scalpers who will find something to do to get the tickets they want.
I think this week there was a story about a dad paying $21,000 to take his family on the Eras Tour because his original tickets he bought from an online retailer never got arrived. If you are a legislator, what levers can you pull to stop this type of price gouging?
I mean, I think the problem is he didn’t get the tickets. It seems unfair, but the economist in me says that if something is in limited supply, you know, higher prices are probably what balances the market. So, to some extent, the secondary market fulfills this important role. I think a bigger question is why doesn’t the primary market have more dynamic pricing so returns can go to the artist rather than the secondary market?
Why has this taken on such importance at the national level? I mean, it was, you know, headline news just a few months ago.
Well, I mean, like in the article you sent me, you know, I think even the Texas lawmaker involved…his daughter was one of the people who really wanted to get tickets and couldn’t. So I think it hits really close to home. I mean, Taylor Swift, she has a huge fan base. There are many disappointed fans who didn’t get tickets. And I think they’re pretty vocal about it.
US Senator John Cornyn of Texas recently came out and said he plans to introduce legislation that would require ticketing sites like Ticketmaster and StubHub to disclose prices and fees before people buy tickets. Do you think this has a chance of passing Congress?
Maybe. I mean, there seems to be a lot of momentum right now in Congress for more clarity around pricing, who, you know, who’s not supporting that? So, probably yeah, who’s against that? I mean, no one is against transparent pricing.
Well, from an economic point of view, is there anything that Taylor Swift or other artists can do to help with ticket prices?
Well, like I said, I mean, the legislation could allow for more dynamic pricing in the primary market, so you don’t have to go through the secondary market. This effectively removes the incentive for resellers to buy lower tickets essentially at the price the market would put on them and then resell them at that higher price. If Ticketmaster just charged that higher price, if you just let people bid on the prices, that would effectively kick out of their market and the returns would go to them. Another thing I was thinking about is remember back in the 80s how people camped for tickets?
Oh yes, of course.
Maybe we should do more because it’s harder for scalpers to get around. So maybe some of the tickets have to be purchased in person and we could bring it back.
