Artists Should Charge Fans More – So Everyone Benefits

That’s the argument behind another interesting article from Adam Davidson, who created NPR’s Planet Money.

Why? Because

(a) “Value” and “Price” are two very, very different things that are easily confused by most people and

(b) A lot of artists don’t want to appear too greedy by setting ticket Prices close to what fans Value them. 

But this just results in scalping, he writes:

… by leaving money on the table, Springsteen and his ilk might be doing their fans an inadvertent disservice. Jared Smith, the president of Ticketmaster North America, told me that the artists who charge the least tend to see the most scalping. Springsteen and others have angrily denounced scalping at their shows, but their prices are guaranteeing the very existence of that secondary market, which has become ever more sophisticated over the years. Many scalpers now use computer programs to monopolize ticket buying when seats go on sale, which forces many fans to buy from resellers. One of the surest ways to eliminate scalping, Smith told me, is to charge a more accurate price in the first place.

And what happens when artists charge more?

Generally speaking, Smith says, artists who charged a lot more for the best 1,000 or so seats would reduce the incentive for scalpers to buy these tickets; it would also allow artists to charge even less for the rest of the seats in the house. Kid Rock told me that on his forthcoming tour, he is planning on charging a lot more than usual for “platinum seating” so that all other seats — including those in the first two rows — can be around $20. “It’s a smart thing for me to do,” he said. “We’re going to make money; I’m going to make money. I want to prove there is a better way to do this.”

Smith, meanwhile, spends much of his time these days trying to persuade artists that increasing the price of their top tickets to near the point where supply meets demand is not greedy but equitable for their fans. “Every time I convince an act, we get three more artists to sign up,” he says. “There’s more and more acceptance.”

The impact is already being felt on the street. Outside the Petty show, one scalper told me that, back in the ’80s and ’90s, he made more than $70,000 a year reselling tickets. But now he is lucky to clear $30,000. “A $300 night is a home run now,” he said. His business has suffered tremendously since 2007, when New York State legalized ticket reselling and helped supply meet demand. “StubHub is killing us,” he said.

2 Responses to “Artists Should Charge Fans More – So Everyone Benefits”

  1. rphover says:

    Ticket pricing is very interesting – no one really has this figured out yet. I had a class this spring where we discussed sports pricing and it was clear lots of ideas are still bouncing around – dutch auctions, dynamic pricing, etc.

    • Yeah…I wish I had taken that course 🙂 I find Pricing to be absolutely fascinating…it is so intimately tied to intangible things like “value”, human psychology, etc.

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