The WSJ reports on the fascinating court battle between IAC’s Ticketmaster and RMG Technologies, a Pittsburgh company that runs TicketBrokerTools.com, a scalping/reselling service. IAC says RMG has created bots that can outsmart Ticketmaster’s “captcha” boxes and allow it to buy up huge blocks of tickets. It then resells them at a steep markup. RMG says it’s not using bots, but says what it is doing is perfectly legal.
The Internet has transformed the aftermarket ticket business, and everyone wants in. In January eBay bought Stubhub for $310 million, and Ticketmaster has its own entry, dubbed TicketExchange. Last month Live Nation CEO Mike Rapino said his concert promotion business would like to have one, too.
The Journal focuses its story on Miley Cyrus/Hannah Montana tour, where the price and scarcity of tickets purportedly has parents in a rage; a Kansas City councilman is making vague threats to do something about the problem. (Richard Blumenthal, are you on top of this?) But ticket buyers shouldn’t blame concert promoters or resellers – they should blame themselves (or their kids) for driving up demand.
The top face value of a Hannah Montana ticket was $63; the average price of a Hannah Montana ticket on StubHub is $237 — more than the Police, Genesis, or anyone currently on tour. Obvious solution: Increase the face value at the start. Rock bands and some Broadway shows have already started doing this by offering at least a portion of their seats at nosebleed prices; the moves tend to generate plenty of headlines, but not that much sticker shock. People who really, really want to see Neil Young in L.A. will pay $257 a pop (and that money goes to Neil Young and the concert promoter, not a scalper), and those that don’t pay less, or stay home. No need to call the authorities here.
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