Low box office pricing fuels concert ticket resale

Ticket scalping exists because tickets are too cheap. The secondary ticket market wouldn’t be around if people weren’t willing to pay more than face value.

So if everyone knows that, why are prices still set so low at the box office for shows that everyone knows will go for top dollar?

Tickets to see Barbra Streisand this fall are expected to go as high as $750. Madonna tickets went for $350, and those are only the primary sales numbers. The resale market bears much higher results.

Compared to the first half of 2005, total ticket sales for the first half of this year rose 20 percent, according to Pollstar magazine. Total ticket sales reached over 17.4 million. Those are record breaking numbers. Some attribute the rise to the fact that ticket prices were too high last year.

Fans have always paid top dollar to see their favorites, especially older, wealthy fans. The Rolling Stones’ most recent tour is the highest selling tour for the first half of 2006, an average ticket cost $170.

But on the secondary market, tickets to the Sept. 20 Stones show in Foxboro, Mass. are selling for $5,000 each on StubHub.com. Barbra can be had for $4,500, and that’s only third row. TicketLiquidator.com has tickets for $2,500 to the shows.

There are some reasons that venues don’t price this high. Obviously, all tickets aren’t going to sell for thousands of dollars. A lot of what determines face value pricing has to do with the fan base, and the overall picture.

Artists want the venue to sell out. Empty seats don’t help their image. And when the venue is sold out, those that were able to get tickets feel special, so they come back again.

When the common man is able to get tickets because the price is affordable, it also raises morale, so to speak. This can in turn widen the fan base, resulting in more sales. Venues also make more money on parking and snacks when more tickets sell.

But in order to make this money, prices have to be set artificially low. The box office is trading profit for the certainty of selling out their tickets -- even when a percentage of the cheap tickets will be turned into high-priced seats by someone else.

Another disadvantage the box office has is that once face value is set, it can’t be lowered. Brokers can sell for whatever they want, many times selling tickets for lower than face value if a concert has not sold out.

The NFL has its own reason for ticket pricing. If they don’t sell out games, the blackout rule prevents the game from being broadcast on local stations. This affects television advertising revenue, and it makes more sense to just lower the ticket price from the start.

The box office is thinking long-term. A secondary seller is sometimes only concerned with turning over one ticket for a quick profit.

However, everything does work together in the end. The limits the scalpers are able to reach can help the box office determine what the market will bear for the next time they set pricing for tickets.

By Christine Paluf
TicketNews.com