Paradise Papers Expose Canadian Scalper's Multimillion-Dollar StubHub Scheme (www.cbc.ca) 146
An anonymous reader quotes a report from CBC.ca: When Adele fans went online to buy tickets to the pop superstar's world tour last year, they had no idea what exactly they were up against. An army of tech-savvy resellers that included a little-known Canadian superscalper named Julien Lavallee managed to vacuum up thousands of tickets in a matter of minutes in one of the quickest tour sellouts in history. The many fans who were shut out would have to pay scalpers like Lavallee a steep premium if they still wanted to see their favorite singer. An investigation by CBC/Radio-Canada and the Toronto Star, based in part on documents found in the Paradise Papers, rips the lid off Lavallee's multimillion-dollar operation based out of Quebec and reveals how ticket website StubHub not only enables but rewards industrial-scale scalpers who gouge fans around the world.
Lavallee's name appears over and over in the records, alongside the names of his wife, his father and other friends and family. The records show them somehow buying tickets from different locations around the world at the same time, placing orders from cities like Chicago, Los Angeles, London and Montreal. Lavallee, who got his start in his early 20s reselling hockey and concert tickets while living at home with his parents, now runs an international ticket harvesting operation. Financial records detail $7.9 million in gross sales in 2014 alone. [T]he CBC/Star investigation also discovered a password-protected portal exclusively for StubHub's top sellers who prove they can move more than $50,000 worth of tickets a year. The company offers them special software to upload and manage huge inventories of tickets. StubHub said in a statement: "StubHub agrees that the use of bots to procure tickets is unfair and anti-consumer. StubHub has always supported anti-bots legislation and encourages policy-makers to look comprehensively at the host of factors that impact a fan's ability to fairly access, buy, resell, or even give away tickets in a competitive ticket market."
Lavallee's name appears over and over in the records, alongside the names of his wife, his father and other friends and family. The records show them somehow buying tickets from different locations around the world at the same time, placing orders from cities like Chicago, Los Angeles, London and Montreal. Lavallee, who got his start in his early 20s reselling hockey and concert tickets while living at home with his parents, now runs an international ticket harvesting operation. Financial records detail $7.9 million in gross sales in 2014 alone. [T]he CBC/Star investigation also discovered a password-protected portal exclusively for StubHub's top sellers who prove they can move more than $50,000 worth of tickets a year. The company offers them special software to upload and manage huge inventories of tickets. StubHub said in a statement: "StubHub agrees that the use of bots to procure tickets is unfair and anti-consumer. StubHub has always supported anti-bots legislation and encourages policy-makers to look comprehensively at the host of factors that impact a fan's ability to fairly access, buy, resell, or even give away tickets in a competitive ticket market."
Re: $7M gross sales? (Score:3)
Just don't buy from scalpers. If they sit there with tickets for a million to a huge event that sees few actual visitors then it will highlight the problem even more.
It doesn't matter how much you want to go to a concert if you feed the scalping mafia at the same time.
Some events demands that you also provide the card used to pay for the ticket to make it valid in an effort to pull out the rug under the feets of the scalpers.
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Why not just sell the tickets at the market clearing price?
If you aren't sure what is the "correct" price, then just set it high, and drop the price a few percent each day until they all sell.
Then the profit goes to the artist and venue rather than the scalpers.
Scalpers are a result of a dysfunctional market. There are no scalpers selling milk outside the grocery store.
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Absolutely. Scalpers...er...resellers are just an inevitable result of setting ticket prices too low.
I was just talking with a friend about the IPO frenzy in the lat '90s. Everyone cheered when a company would offer an IPO and the stock price would double or triple on opening day. I always wondered why people were so excited that the company left 50% of the cash on the table.
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Not even close. Maybe live event scalping is different than product scalping though.
I tried, and ultimately failed, to sell into the toy market (action figures specifically). The issues as I see them are that "manufacturers" (they don't really manufacture) and retail outlets consolidated in the last 20 years. Hasbro, in particular, swallowed up _alot_ of competition. As the remaining players grew bigger, they did what every big company inevitably does - they made excuses about how hard it was to deal wi
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Why not just sell the tickets at the market clearing price?
I know you won't believe this, but artists aren't all rich assholes who only want other rich assholes to see their performances.
Re: $7M gross sales? (Score:5, Interesting)
Why not just sell the tickets at the market clearing price?
I know you won't believe this, but artists aren't all rich assholes who only want other rich assholes to see their performances.
They can donate as many tickets as they like. A simple free auction would handle this real quick if it was the real reason they are keeping prices artificially low. You must think these artists are monumentally stupid if they think low ticket prices help out consumers and not just scalpers.
The only reason scalpers can make money is the ticket brokers like the service they provide (mitigating risk, media buzz from immediately selling out, etc) There are numerous ways the ticket brokers could cut out all the scalpers if they wanted. Raising prices, auction, non-transferable tickets, and many others. The ticket brokers like scalpers, and this is the only reason they exist.
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You must think these artists are monumentally stupid...
Well, not exactly the way I'd put it but... they act on principle a lot but aren't usually really detail oriented and tend not to want to spend a lot of time thinking about the numbers and logistics of it all so they prefer to leave that work up to others and therefore their agenda often gets railroaded by "smarter people." You don't have to dig hard to find numerous complaints from various performers that their fans can't afford their tickets because [the venue] has some exclusive deal with, say TicketM
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The ticket brokers like scalpers, and this is the only reason they exist.
. Some even have a financial stake in scalping operations. And just listen to these weasel words: “StubHub has always supported anti-bots legislation and encourages policy-makers to look comprehensively at the host of factors [...]”. Translation: “We support scalpin and we will continue to do so unless the low expressly forbids us, which we expect isn’t any time soon”.
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There are numerous ways the ticket brokers could cut out all the scalpers if they wanted. Raising prices, auction, non-transferable tickets, and many others. The ticket brokers like scalpers, and this is the only reason they exist.
Exactly this. They could follow the lead of the airline. You could have a cheap ticket which requires a picture id to match someone in your party. If you have a party of 10, you would only have to check one id. You could also sell a certain percentage at auction. Most of these concerts are also sellouts so even allowing someone to sell it back so that someone else can rebuy it wouldn't hurt the venue.
I think the main reason they keep the prices low is not because they want it affordable to fans but bec
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If there is so much demand for Adele when she arrives in Toronto, why does't she play for ten nights?
Seems much more likely people will get tickets.
You see this a little bit with comedians - When a top act announces they're coming to town they announce one show. Then two weeks later "a second show has been added!" Then a month after that a second night... then a second show that second night.
Just create enough inventory
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Two things, competition for the stadium where they play and wanting to visit multiple cities on their tour. The second is probably the biggest. Want to visit 300 cities in about a year, no time for spending 10 nights per city.
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There are no scalpers selling milk outside the grocery store.
Give it time. And no, they won't be taking Bitcoin.
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A rather simple solution to that problem is ... :
the scalper is the promoters hedge. Example
the cost of the concert with the artist is 12 million.
I hedge the bet with selling the food concessions out to 3rd party
I hedge the bet with selling the parking concessions again to a 3rd party
I hedge the bet with selling the VIP concessions to another 3rd party.
those 3 will cover about 20% to 30% of my cost, and I might be able to
negotiate some back end too of those sales.
Now I price the tickets to sell @ 80% of my
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By your reasoning, if I got an invitation to a party and couldn't come, I could sell it to someone, they could come to the party, and that's obviously happening because the price of the party invitations (free) was less than the market-clearing price (the price I managed to sell it for).
Unless you collect tickets and only bought the ticket to hang it on your wall, a ticket is just there to indicate the existence of an agreement. The performer didn't agree to let into his venue people who bought tickets fro
Re:Scalping isn't illegal (Score:4, Interesting)
Right of first sale here.
"Right of first sale" is not a universal principle, for instance you cannot resell a plane ticket, or a fishing license. In some jurisdictions, scalping is illegal.
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"Right of first sale" is not a universal principle, for instance you cannot resell a plane ticket, or a fishing license. In some jurisdictions, scalping is illegal.
When New Zealand hosted the Rugby World Cup in 2011 they did exactly this. For this one event they made reselling tickets illegal to crack down on scalping. If you had extra tickets you could sell them back to the agency at face value and they managed all sales (and resales).
So it can tackled fairly easily, but the people selling the tickets need to want it, and this clearly isn't the case here.
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The problem is having a handful of individuals setting up a vast network to snap up all the tickets instantly. No matter what ticket price they set, these people will have the capital to buy huge chunks of the tickets to resell. Every time. Their systems are setup to snap up tickets faster than you can by going through the process legitimately.
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What an odd post. So, this article is about "Scalpers in Canada".. Yet you quote 17 U.S.C. 109 which is a US law?
Did you know that reselling tickets use to be against the law in Most of Canada (my home provice of Ontario for sure).
Did you know that the "right of first sale" is under constant attack in the US as well (see Omega vs Costco).
Ontario allowed reseling to try to let people sell their tickets for valid reasons (cant make teh event for example). But this encouraged electronic scalping with bot
Re: $7M gross sales? (Score:2)
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I don't understand why you would not want me to go to the scalper.
If anything, the internet has shown that I can buy anything I want,
when I want, as long as I am willing to pay the price.
Don't get me wrong, I don't like to pay 3 times the ticket price. If i want
to see an artist, I'll pay. won't like it, but I'll pay.
When you have access, you can time your choices down to the day.
a good example for me was; I had a choice, pay 250 for a concert ticket,
or a cheap flight to Texas and see a rodeo the next day. T
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His strategy is extremely high-risk. If he guesses wrong about the demand for one major concert, he is through. The way to make long-term money on reselling tickets to anything is by charging a commission.
events should have a ticket lottery system (Score:3)
events should have a ticket lottery system so that it's more fair and for some say one a year events (more so across many time zones) and it can stop the untenanted multi buys say I want to go this event but I don't know If I can be online at the time / day it's due to open so you ask some to try to get them for you but you end getting in at the right time.
Also fixes the buy rush endless reloading game.
Re: events should have a ticket lottery system (Score:5, Insightful)
Even the H1b visa lottery is being manipulated...
Obvious solution: Replace the lottery with an auction. The visas will go to those that value them the most, and the price will be too high for anyone looking for cheap labor.
Couldn't they just collude? (Score:2)
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Perhaps for labour where the price should be set by the market but with concerts, often the performers are not interested in maximizing profits.
The Canadian example the other year was when the leader of the Tragically Hip announced he had terminal brain cancer and they were going to do a farewell tour. Their interest was in sharing with regular people, not getting richer and set their ticket prices accordingly. Of course the shows sold out in under a second and tickets were going for thousands which did not
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Nobody said life is fair. Everyone wants Capitalism, until Capitalism bites them in the ass.
If people are willing to pay a scalper 1.5x, 2x, or 3x the face price, that just tells me that the original price was too low. And then it's unfair to the performer, who ought to be the one reaping the money from the higher ticket price. See above about life being fair.
This is also why I don't go to concerts.
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If people are willing to pay a scalper 1.5x, 2x, or 3x the face price, that just tells me that the original price was too low.
That's what every real estate, product or service seller is thinking -- how do I extract all the money my customer has? And it's called gouging. This is why the working class is always working; their increased income is absorbed by increases in product prices.
Re:events should have a ticket lottery system (Score:5, Insightful)
That's what every real estate, product or service seller is thinking -- how do I extract all the money my customer has? And it's called gouging. This is why the working class is always working; their increased income is absorbed by increases in product prices.
It is basic supply and demand, not price gouging. Price gouging nearly always refers to essentials such as food or medicine during emergencies. Charging the maximum people will pay for a concert, which is entertainment with nearly infinite alternatives, is just basic economics.
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Taxation is theft crowd would be the first one to lose everything in a rebellion.
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It is called business. Business is there to make money. If someone offered 5x the price and is willing to pay, then you would be a fool not to. If you were a salesperson, and sold something for $200 when it could be sold for $500, you would get fired.
If someone wants to sell something for $200 instead of $500 to people who can only afford $200, they should have the right. Not everyone is interested in only maximizing profit.
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"And it's called gouging. "
No it's not. It's called profit. Don't like it? Become a seller, assume the risks, partake in the profit or just don't buy.
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No. Just limit each ticket to one specific individual with proof of ID required to enter the event.
This will slow the entrance line down to the pace of the customs line at the airport. I will a long long time to fill a 50,000 seat stadium.
Re: events should have a ticket lottery system (Score:3)
Not really. You don't have to check for I'd or even print tickets.
Just make your tickets electronic and tied to an email address.
Scanning phones is quick. No ID nessecary. Printed tickets get a separate line with extra security.
Scalpers can't resell something like that.
Dutch auctions (Score:4, Interesting)
It would be so easy to shut out scalpers by selling tickets through dutch auctions. If you grab them all early, you pay a big markup.
Re:Dutch auctions (Score:5, Insightful)
It'd be even easier if stupid people wouldn't buy tickets from scalpers. After a few concerts with no body in the seats and scalpers on the hook for millions, the problem will solve itself.
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For every person you could possibly convince not to purchase, five more are waiting to buy. Fantasy ideas about supply and demand aren't helpful.
If a gas station sells for $2 a gallon, and then an emergency strikes, that station will be empty even if they raise their prices to $10 a gallon. For a once in a lifetime event, most people would pay far more. It doesn't matter if it's concert tickets or emergency rations, they are a limited resource and valuable.
It's deranged thinking that you can stop ticket
Re:Dutch auctions (Score:4, Insightful)
Spam emails still exists because they're lucrative even though "nobody" replies to these things.
And you're asking people to NOT buy things they WANT?
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The problem is not stupid people, is market price. If I have loads of disposable income and the opportunity to buy a ticket for double the price someone else paid that doesn't make me stupid for spending money on something I find valuable.
The problem is that locks out poor people which isn't really a good idea either. The problem could be solved instantly by requiring ID on entry and showing the method of payment as well as the receipt.
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Sorry what's the downside again?
Actually no (Score:2)
Plus the
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Many artists want their ticket prices reasonable so any fan can have an opportunity to see a show not just rich ones.
That is basically BS. They price the tickets below market so the event will be sold out fast, giving the illusion of scarcity, and making them appear to be popular. This is the same reason that IPO stock prices are below market. The resulting "pop" makes them look successful and "hot" even at the cost of raising less money in the short term.
Scalpers are to concerts as underwriters are to IPOs. The both buy quick and sell slow.
Easy problem to solve (Score:1, Troll)
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Every time the issue of scalpers comes up and someone points out the obvious, that tickets ought to be sold in an auction format to find their actual market price, someone cries that high ticket prices is just another way to discriminate against the poor.
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someone cries that high ticket prices is just another way to discriminate against the poor.
An obvious solution would be to tax concert tickets and use the proceeds to pay for food stamps and other programs that help the poor. That way higher prices will actually be better for the poor.
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They won't do that because it's an open secret that they want to scalpers to buy all the tickets and sell them at inflated prices. A show selling out fast is a good thing for them - it makes people think that it's very popular and makes people more likely to try and see future shows. Every news headline they generate about how fast their show sold out or how much tickets are going for is free advertising.
And there's an even bigger reason - it lets them dump the risk onto the scalpers. The scalpers are doing
Speaking as a fellow Canadian (Score:2)
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Eh, CBC is about the best thing on the air, better than the tripe on Global or CTV.
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Why don't they just do what airlines do (Score:5, Insightful)
That the ticket sales sites don't implement such a simple solution suggests they actually like scalpers. The scalpers help guarantee an event sells out even if not all the seats are filled. i.e. The risk of a non-sellout is shifted from the ticket sales site to the scalpers, with the scalpers losing money if the event doesn't sell out, but pocketing the cash if the event does sell out. The ticket sales sites benefit from less variability in ticket sales, and thus more predictability in their income.
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I think you have hit the nail on the head.
It also explains why scalpers are allowed to have direct machine level interfaces for buying tickets.even though the promoters say they don't like scalpers.
Scalpers are not stupid however, they will only buy heaps of tickets if they reasonably believe there will be a sellout and no additional concerts will be arranged.
Sort of defeats the purpose of giving scalpers preferred access to tickets, it can only help on marginal sellout concerts.
hmmm... I wonder if any insu
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The economics of scalpers requiring sell out of all the tickets they buy just doesn't work. Let's run it down:
If ticket price is $15 and I buy 1000 tickets I've invested $15,000.
If i scalp them for $50 I could potentially make $50,000- $15,000 =$35,000
If I can only sell 500 tickets I still make $10,000, which is still a huge profit margin.
Scalpers don't have to care if they sell out. They don't want to get stuck with too many tickets but only selling 50% is good for them.
If it's a really hot concert they ca
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There are events which operate this way, and it's a major PITA. Now they have to deal with people who want to transfer their ticket to somebody else because they couldn't go; bought it as a gift; or just want to give away their ticket.
Then there's the problem of what qualifies as an ID, especially with international events. Even reading a passport and parsing the name can be difficult for some bouncers. These guys are really not at the top of the IQ scale.
No, I'd rather pay twice the price for my tickets th
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Now they have to deal with people who want to transfer their ticket to somebody else because they couldn't go; bought it as a gift; or just want to give away their ticket.
Now if only there was an easy way to deal with this, such as an authorised re-sell portal that pegs the price to the original sales price.
There are events that operate this way too, and it costs you about a $5 service fee to transfer the ticket.
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There are events which operate this way, and it's a major PITA.
Really? A "major" PITA?
Now they have to deal with people who want to transfer their ticket to somebody else because they couldn't go; bought it as a gift; or just want to give away their ticket.
Oh noes! It's a minor issue. It takes a few personnel you have to have around anyway just in case a ticket is damaged or the system isn't working correctly.
Then there's the problem of what qualifies as an ID,
No, that's not a problem. You just accept anything. Raising the difficulty level is enough, you don't have to be 100% sure that you've verified IDs correctly.
No, I'd rather pay twice the price for my tickets than having to go through some draconian bureaucracy and deal with meat-heads at the door.
Congratulations, you're in the minority.
Fixed Name Lottery (Score:2)
I agree with this sentiment.
>Then there's the problem of what qualifies as an ID, especially with international events.
There is no such thing. Just fucking specify what is valid, and follow those rules. Just don't go full retard and think passports are supposed to be used for civilian identification.
You don't even need to do it properly, anything with name on is fine so long it looks like its real plastic. If it gets to the point where scammers has to run a card printing operation, with mismatched gender
Re:Why don't they just do what airlines do (Score:5, Insightful)
That the ticket sales sites don't implement such a simple solution suggests they actually like scalpers.
Exactly. StubHub is owned by TicketMaster. Tickets go up for sale on TicketMaster first and get sold out in seconds. Then they appear on StubHub where TicketMaster takes another cut of the sales. They have zero interest in curtailing this.
Re:Why don't they just do what airlines do (Score:5, Informative)
Actually, stubhub is owned by eBay. Getmein.com is the resale site owned by Ticketmaster. Doesn’t change your point, of course but still it’s important to be factual.
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Require the ticket user's name be printed on the ticket, and confirm your ID matches before you're allowed in.
This idea has some merit but you're always going to have people who for one reason or another can't go at the last minute and the ticket shouldn't have to be burnt just because of that.
Limiting the number of tickets one can buy is something would help and I think they do - I haven't bought tickets in a while, but I remember ticket scalpers recruiting my friends who had to physically wait in line to buy extra tickets for them. They would basically get a free ticket in exchange for waiting for hours to buy t
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Have name printed on the ticket, require id, and force ticket sellers to reimburse you, minus a reasonable cancellation fee. They can resell your ticket to somone else at face value after.
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This idea has some merit but you're always going to have people who for one reason or another can't go at the last minute and the ticket shouldn't have to be burnt just because of that.
At the same time you also allow full refunds until, say, 8 hours before the show. if someone else wants to pick up a last minute/rush ticket, they can buy it from the band/venue instead.
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U2 did a variation of this for their 2017 Joshua Tree tour. The credit card you purchase the ticket with is your ticket. You can buy multiple tickets, but they all have to get together with you to get in.
It's a pain for some situations, but gives fans a chance to get a ticket without having to deal with scalpers.
Identification required (Score:2)
Simple solution: make tickets sold on-line non-transferable and marked with the name of the person they're for. When you buy tickets through a retail channel they have to collect a name for each ticket, which shouldn't be a problem for someone buying for a group of friends. At the door the ticket gets checked against identification and if the name doesn't match the ticket's no good.
If the primary outlet wants to allow resellers to buy for other people, they'd have to implement a reservation system where the
Make them purchase in person (Score:1)
I remember reading about a band more than decade ago who was concerned about this so they limited ticket sales to in-person sales with limit of how many each person can purchase. Now it still didn't stop the scalpers from paying someone from standing on the line to buy the tickets for them but many real fans got to purchase the tickets at a list price.
Wrong pricing by the show (Score:2)
I've no idea why shows sell tickets below the market price. Money aside, it is PITA for a top paying customer when I have to go to a reseller rather than buy the ticket directly.
Smart show company: Cirque de Soleil in Canada. In my limited experience tickets are always available for tomorow's show, in all or most price zones, at a price of course. I've just checked tomorrow's show in Toronto, and there are seats. I am happy customer.
Stupid company (okay, stupid in this particular aspect): Studio Ghibli muse
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The market doesn't always do what the band wants, though. They want lots of their fans there, people who really want to be there. The market sucks at allotting stuff to the people who want it most, because people don't all have the same disposable income. I could casually spend a sum that would strain the budgets of lots of teenagers, for example.
Strange comments (Score:1)
Most of the posts above believe the artist gets to set the price of tickets.
The artist gets paid their minimum amount when the contract is signed with the promoter. They may have a clause to get a % of the door, they may not. In many cases there is a deposit and a payment delivered to the artists before they go on stage.
This is independent of the promoter who is on the hook for the act in question. They are responsible for paying the artist, the location of the event, and all costs associated.
Scalpers ma
StubHub has supported anti-bot legislation. (Score:2)
Which accomplishes NOTHING, since we're talking international borders.
And, meanwhile, they put into place apparatus to assist abusers in their endeavors.
We can FIX this (Score:1)
It's even worse than just scalping (Score:2)
These scumbags got hold of a bunch of tickets to a charity concert and sold them at a huge markup. None of that money went to charity, of course.
Hedonism is the root cause, not scalpers (Score:2)
If I see a concert is sold out, I don't go. I also don't stand in line for movies or restaurants, because there are plenty of other options. And often, those options are still satisfying, cost less, and aren't as crowded or noisy. Movies eventually come out on DVD anyway. It's the same movie six months from now as it is in the theater. I'll admit the sound is better in the theater or concert, but I can still enjoy it. I don't have the hedonistic desire to have the 'best' experience, just to enjoy life
This is why I don't go (Score:2)
Market pricing... (Score:2)
Scalpers can sell their tickets at a profit. Clearly they're charging what the market can bear. If venues raised their prices to near what the market can bear and sold tickets online directly using an easy-to-use system, the profit motive for scalping would go away. Real question is, why aren't venues selling directly at more of a profit?
Interesting Statement from SubHub (Score:2)
Is that StubHub's whole statement? I ask because it's very telling. Sure, they say that bots are "unfair and anti-consumer" but that its the government's responsibility to come up with a solution, not theirs. I mean, we know SubHub doesn't care about consumers but it's almost refreshing to see them admit it.