Ticketmaster Targets Secondary Market

Ticketmaster, which dominates the ticket-selling business, hopes to expand its presence in the secondary market, where online brokers and street-corner scalpers prevail. The company is working with states to enact new laws that would limit the resale market to authorized players. Critics say the changes would give Ticketmaster too much power.

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If you bought tickets to a live event lately, chances are you bought them through Ticketmaster. The company dominates the business. It's the ticket seller of choice for thousands of sports and concert stadiums, theatres and nightclubs. Lately, Ticketmaster is trying to branch out even further and wants to replace the scalpers and brokers who resell tickets. Some say that would be good for consumers, others say it would create a monopoly and jack up prices even further.

NPR's Adam Davidson reports.

ADAM DAVIDSON: How much is a ticket worth? Let's take the popular Broadway show Wicked.

(Soundbite of Wicked)

CHORUS: The wickedest witch there ever was. The enemy of all us.

Mr. DAVIDSON: At the theatre, like on most days, there's a sign up this performance is sold out. Back at the office I wonder if I can buy any online.

(Soundbite of typing)

Mr. DAVIDSON: So I go to Google, type in Wicked, Wicked the musical. Click here to purchase tickets online. That sends me to the Ticketmaster site. The ticket price is $110 with a $7 convenience charge.

A hundred and ten is the face value, but there's a way to find out what tickets are going for on the open market. I call Jason Berger, a ticket broker with Concert Connection, and ask if he has tickets for tonight's show.

Mr. JASON BERGER (Ticket Broker): You're pretty well in luck here. We have seats available starting actually at $100 a ticket. But the seats that I would say would be the most prime orchestra seats would be something, it looks like about, four or five rows back in the center, and those seats would be $135 a ticket.

Mr. DAVIDSON: Concert Connection isn't affiliated with Ticketmaster or Wicked, which means they don't have to charge the face value. They price tickets at whatever the market can bear. Concert Connection's price changes daily, sometimes even hourly. Today, decent seats go for $100, sold at a loss because after tonight those tickets have no value. Or for a bit more, $135 for a really good seat.

I could also call any one of hundreds of other brokers. I could go on eBay. I could even go stand in front of the theatre and look for a scalper. There are countless unofficial Wicked ticket resellers. Some trustworthy, some are sketchy.

And if you are Ticketmaster, this bustling, thriving, sometimes seedy secondary market drives you crazy. All these brokers and scalpers are making money off the resale of tickets, your tickets. What if you could devise a way to capture all that additional revenue for yourself and your customers?

Sean Moriarty, president of Ticketmaster, says the only reason all these brokers and resellers exist is because of badly-written state laws.

Mr. SEAN MORIARTY (President, Ticketmaster): The laws that exist are antiquated and in most cases should actually be changed. And we've actually worked hard to change those laws.

Mr. DAVIDSON: Moriarty has lobbied several states to change their laws to allow venues to chose who gets to resell tickets in the secondary market. So any ticket broker or scalper who is not authorized cannot resell tickets. So far, only Louisiana has a venue consent law.

Mr. MORIARTY: Whoever is putting on the event fundamentally has the right to have certain conditions that have to be accepted by the buyer of the ticket. And a ticket, in most cases, is actually a revocable license and always has been. It's got privileges and terms of use associated with it.

Mr. DAVIDSON: What does he mean by terms of use? It's that little writing on the back of a ticket. You know, the stuff you always ignore. And a change in that writing and a change in state law could mean a big change in the ticket industry. It could mean that you would only be able to buy tickets directly through Ticketmaster, or if you want to buy already sold tickets, you'd have to go to a different part of Ticketmaster's Web site where you'd see an auction.

People who can't use their tickets would sell them there at whatever price the market can bear. Ticketmaster would always be involved. And there would be no ticket brokers or scalpers, no tickets on eBay. The primary sale and secondary resale of tickets will go through Ticketmaster. Moriarty says that means it's all safe. There's no sketchy scalpers with counterfeit tickets.

But Steve Happel, an economist at Arizona State University, doesn't like Ticketmaster's plan.

Mr. STEVE HAPPEL (Arizona State University): The net effect is higher prices for consumers.

Mr. DAVIDSON: Happel says this will eliminate competition in the secondary market.

Mr. HAPPEL: There's a natural tendency to control that market. I mean it's just inevitable. You're going to try to - you're a profit maximizer. You got to satisfy your stockholders. You know, what the heck?

Mr. DAVIDSON: Happel is careful to say he thinks Ticketmaster is run by ethical businesspeople. But he says if Ticketmaster controls much of the primary market and is a major player in the secondary market where tickets are resold, the company would be in a position to manipulate prices.

Ticketmaster's Moriarty says they'd never do that.

Mr. MORIARTY: To think for an instant that given our position and our obligations to the industry that we would try to exert leverage in that way is absolutely ridiculous.

Mr. DAVIDSON: In the last year, Florida, South Carolina and Illinois changed laws to give Ticketmaster at least some of what it wants. Many expect Ticketmaster's campaign to move next to New York and Massachusetts.

Adam Davidson, NPR News.

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