Parents are complaining about the high price of tickets for Hannah Montana/Miley Cyrus concerts thanks to scalpers. Like any popular event, whether a concert or sporting event, ticket brokers buy tickets early on — somehow — and resell them with a huge mark-up. Is it fair? I don’t think so, but not for the typical reason.
If scalpers who sell on StubHub or any number of other locations price tickets high on a large scale, it’s because there are enough people willing to pay that price. When event is “sold out” — that is, all the tickets were sold to an original buyer, some of whom may be brokers who have the tickets available in their own marketplace — prices of available tickets can be increased even further. Event promoters are missing out by not pricing the tickets as high as the market will bear. As it is now, with official below-market prices, the market that is created for scalpers ensures that performers will not maximize their income from tickets.
The problem here is that it is possible that scalpers artificially manipulate the market by swooping in early and purchasing all the good tickets. They control the supply, rather than the event promoters. Thus, the demand for more poplar events isn’t matched by the scarce supply, and the scalpers can raise their prices to unreasonable levels.
So what happens? Event promoters raise their prices to match the new market, and a cycle ensues. The market allows ever increasing prices, far beyond the increase of inflation. People who aren’t used to trying to get tickets to popular events, like Paige Nace in the article, are frustrated at the expense.
It’s just another financial choice you have to make. Is your daughter’s happiness for one evening — and possibly the resulting memories — worth the several hundred dollars you’ll have to spend for two tickets? I have no problem seeing people spend money for musical entertainment, though sometimes the said entertainment is of questionable quality when considered by individuals with musical taste and is more about theatrics than actual musical entertainment. Live events are always much more engaging than sitting in your living room watching a DVD or listening to a CD. But it’s better when attendance can be accomplished without middlemen.
Photo credit: JOE MAD
Updated June 20, 2014 and originally published October 2, 2007.