The economics of concert tickets and how Adele strained the vinyl supply chain : Planet Money Ticket scalping frustrates fans, but it fascinates economists. It's been a favorite topic of ours in the past. This time, Darian turns to friends and experts to navigate the world of concert tickets like an economist who is also a music fan. Then we find out just how big Adele is on vinyl. So big her latest album disrupted the whole market for vinyl, the material itself. | These stories come from our daily podcast The Indicator. Go subscribe if you haven't already.

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SYLVIE DOUGLIS, BYLINE: This is PLANET MONEY from NPR.

(SOUNDBITE OF COIN SPINNING)

STACEY VANEK SMITH, HOST:

So I recently learned that reporter Darian Woods is a huge fan of the singer Charli - with an I - XCX.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

DARIAN WOODS, BYLINE: That's right. Yeah, I'm a big fan. And we were talking about this because she's going on tour. She's coming to New York. And a couple of weeks ago, you and I got together to buy me tickets. You were helping me - moral support and...

VANEK SMITH: Yes.

WOODS: ...Bit of logistical support - when these tickets went on sale at 10 a.m.

VANEK SMITH: Are you online?

WOODS: I'm online. I've got my - I got my debit card out.

VANEK SMITH: OK, OK. I mean, this is like an Olympic sport, right? Like, these tickets go on sale. You have seconds to buy one.

WOODS: Yeah. And we recruited Indicator intern Taylor Washington to help us through the Byzantine process of ticket buying.

VANEK SMITH: Yes, Taylor is, like, this ticket buying wizard. She knows all the ins and outs, and she's gotten tickets to, like, some pretty big concerts in the past.

TAYLOR WASHINGTON, BYLINE: Yeah, this isn't my first rodeo.

VANEK SMITH: Do you have, like, tips for Darian? Like, can you walk him through this?

WASHINGTON: OK. The first thing you said - I heard a red flag when you said, I have to get my debit card out. You should've already had your debit card in the Ticketmaster account. You should've...

WOODS: Oh.

WASHINGTON: ...Already had a card on file.

VANEK SMITH: You said that was the first red flag. (Laughter) What were the others?

WASHINGTON: Well, that was the only...

VANEK SMITH: He only said, like, five words.

WASHINGTON: Well, that was...

WOODS: As we were waiting for the tickets to drop, Taylor's other advice - get all three of us logged in to try to buy tickets.

WASHINGTON: When I buy tickets sometimes with my friends, in person, in high school, everybody would have a computer out, so that's a good tip.

VANEK SMITH: It was stressful. And as live music starts up again, we wanted to know, is all this high blood pressure and adrenaline really the best way to run the market for tickets?

(SOUNDBITE OF BRYAN JAMES SAMMIS, ET AL. SONG, "I'VE GOT POTENTIAL")

VANEK SMITH: Hello, and welcome to PLANET MONEY. I'm Stacey Vanek Smith. What do Charli XCX and Adele have in common? They both teach us about the forces of our economy - obviously. Today on the show, we have two episodes from our daily podcast, The Indicator From Planet Money, about the economics of the music industry. We figure out what is going on with the bizarre ticket market, and we try to outsmart the scalpers. And then Adele's new album breaks our hearts and also the vinyl supply chain. That's coming up after the break.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

VANEK SMITH: Live music is back, and so is the scramble for tickets.

WOODS: Now, we knew Charli XCX was going to sell out within minutes of going on sale. And Alan Sorensen, an economist at University of Wisconsin-Madison, says that this suggests that the $54 that she was charging was way too low.

ALAN SORENSEN: Well, obviously, because she left a lot of money on the table.

VANEK SMITH: Alan says this is very common in the music industry - concert tickets that are much lower than what people would be willing to pay for them. And Alan says there are two main explanations. One, artists really don't want to risk playing to a half-empty room because their tickets were too expensive. And secondly, the artist doesn't want to be seen as ripping off the fans.

SORENSEN: For some fans like you, they are doing a favor - right? - $50 instead of having to pay 80 or 100. But they're also doing a big favor to scalpers.

WOODS: Scalpers, those ticket resellers, the sworn enemy of the music fan waiting in line to buy tickets - fans like me, waiting in this virtual line for those Charli XCX tickets.

OK. It's already 10.

VANEK SMITH: OK.

WOODS: I'm going to buy some tickets. Join the queue.

WASHINGTON: Oh, no. It's a queue already.

WOODS: What?

VANEK SMITH: Ticketmaster put Darian in a virtual line on their website.

WOODS: Oh, 494 people ahead of me.

WASHINGTON: Oh, my goodness.

VANEK SMITH: It's not even - it's just 10.

WOODS: Wait, what? It just hit 10 just now.

WASHINGTON: I don't know. I think you should start praying to somebody. It's like...

VANEK SMITH: We were not happy about this, and we just knew there would be scalpers and their bots waiting to sweep up those tickets and put them straight into the resale market.

WOODS: Unable to proceed.

VANEK SMITH: Oh.

WOODS: This may be a flop.

WASHINGTON: I think they're gone.

VANEK SMITH: What?

WOODS: Wow. We went at right at 10.

VANEK SMITH: Oh, my God, I'm so sorry.

WOODS: That's fine.

VANEK SMITH: Sucks.

WOODS: That's fine.

VANEK SMITH: Oh, no, it's...

WOODS: So the only option now is to, like, pay $400 or so to scalpers (laughter).

VANEK SMITH: Actually, it was more like $100, but still.

WOODS: Yeah, the Charli XCX fan in me was seething at the scalpers. But, you know, my economics mind was still curious about whether the scalpers were performing a useful function here. Like, how did they shape this weird market?

VANEK SMITH: And this is something Alan and his co-author Phillip Leslie tried to answer when they got their hands on some ticket data - data on over a million ticket sales from 56 concerts in the mid-2000s.

SORENSEN: Dave Matthews Band, Eric Clapton, Jimmy Buffett - oh, Madonna was in there - Prince - rest in peace - Rush, Shania Twain and more.

VANEK SMITH: Alan and his co-author pored over this ticket data, and they looked at how many tickets were being resold on what's called the secondary market.

WOODS: And the first finding was that anywhere between about 5 to 20% of tickets were resold on StubHub or eBay. And there's a reason why scalpers actually target some concerts more than others.

SORENSEN: This was correlated with how underpriced the tickets appeared to be. So it was the tickets that were most underpriced that were most likely to be resold in the secondary market.

VANEK SMITH: But the person who most wants that ticket, a super fan, might not be the person who has time to go online for a half an hour at 10 a.m. to get it.

WOODS: But then there's this other type of ticket buyer. Maybe they're a 30-something who vaguely remembers the song "I Love It" from 10 years ago. Let's call her Dorothy. And economists would call Dorothy a low-value audience member and the super fan - i.e., me - a high-value audience member. And I would be paying a lot of money for that Charli XCX ticket.

VANEK SMITH: And that is where, says Alan, scalpers can actually help the market because they can move tickets from people like Dorothy to fans like you, Darian.

WOODS: Yeah, so Dorothy can find something else to do. Like, maybe she can go see the Lehman Brothers play on Broadway - which, by the way, is fantastic.

SORENSEN: Scalpers do create value. But some people are worse off because of resale. And the thing that's sort of ironic is the people who lose are the people who end up going to the concert.

VANEK SMITH: By that, Alan means the scalpers extract all the money they can from the super fans. And that could squeeze the joy out of a concert they've really been looking forward to. And, of course, none of the markup is going to go to the artist or the venue. The only real winner is the scalper.

WOODS: And yeah, in any market, there are winners and losers. But Alan says it's more complicated than that.

SORENSEN: The problem with scalpers is that it's the prospect of making this money that induces them to do all kinds of inefficient things to get those tickets, right? So they're the ones that jam up the website at exactly 10 a.m. Or in the old days, they're the ones that have hired people to stand in line at the box office, and so the line's really long.

VANEK SMITH: So given how much energy is expended from the scalpers, Alan is pretty skeptical whether scalpers make the world better off - even from a dry, analytical viewpoint that likes to see Dorothy watching Broadway plays and you, Darian, seeing your favorite pop star.

SORENSEN: You have these presumably smart people that are spending their time just sort of scrambling to write bots so that they can buy up tickets and profit from that, right? Like, that's not a particularly productive thing for people to be doing. It's just skimming cream off a market.

WOODS: Ticket companies have tried, mostly halfheartedly, to limit scalpers. They've restricted the number of tickets that you can buy at any one time. They sometimes make you show ID at a show. And some have apps where you can only transfer tickets to other people with the same app. But big ticket companies, like Ticketmaster, haven't really gone hard-line. Like, they haven't tried to ban the resale market, for example.

VANEK SMITH: As for the Charli XCX concert you wanted to go to - after almost giving up, when it looked like all the tickets were gone, we refreshed and refreshed and refreshed the pages. Taylor was jumping in, clicking buy, buy, buy.

WOODS: That's right.

VANEK SMITH: I was trying to click buy, buy, buy. And then something happened.

I think it might be one ticket.

WOODS: That's fine. I can have fun. Among the Charli XCX Angels, I'm never alone.

WASHINGTON: Yeah. Yeah. That's true.

VANEK SMITH: Then, after an agonizing 10 more minutes of refreshing...

WOODS: Oh. Actually, sit tight. We're securing your verified tickets. We are currently working on your request.

VANEK SMITH: Oh, my God. Oh, my God.

WOODS: I'm actually shaking.

VANEK SMITH: I've got your back.

(LAUGHTER)

VANEK SMITH: I've got your back.

WOODS: You got 'em.

VANEK SMITH: Woo.

WASHINGTON: Yay.

VANEK SMITH: Darian...

WOODS: Woohoo.

VANEK SMITH: ...We got you in. We got you in. Oh, my gosh.

WOODS: Oh, my gosh.

VANEK SMITH: Dream team - Ticketmaster-buying team.

WASHINGTON: It was a bloodbath. It obviously was a bloodbath.

(LAUGHTER)

VANEK SMITH: Coming up after the break, Adele's new album doesn't exactly go easy on the vinyl supply chain.

(SOUNDBITE OF BRYAN JAMES SAMMIS, ET AL. SONG, "I'VE GOT POTENTIAL")

VANEK SMITH: Adele's new album, "30," dropped last month. By now, you've probably heard her hit single "Easy On Me." And, of course, you can get the album in what has become the typical fashion - digitally. But there's also this very special, deluxe double LP that you can buy.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

WOODS: Vinyl - yeah. So vinyl records have been having a mega comeback. Sales have been rising pretty steadily for about a decade now. And they surpassed CD sales last year for the first time.

VANEK SMITH: And, Darian, you know, Adele was not playing around with her LP release. She apparently pressed more than 500,000 copies of her album. That is a million single records. And this was just, like, a mega order for the little vinyl supply chain. I mean, supply chain issues had already been delaying a lot of vinyl. And now, Darian, they're basically saying that Adele broke the vinyl supply chain.

WOODS: That's awkward.

(LAUGHTER)

VANEK SMITH: It is awkward. But go easy on her, Darian. Go easy on her.

(SOUNDBITE OF SONG, "EASY ON ME")

ADELE: (Singing) On me.

VANEK SMITH: Brandon Seavers owns Memphis Record Pressing. And his company has been making vinyl since 2014. Before that, the company was making CDs. And CD sales have been declining for years because music sales - they were all moving towards digital.

WOODS: And Brandon was watching this happen. And he knew he had to make some kind of move. So he moved from CDs back to vinyl.

BRANDON SEAVERS: We brought in a bunch of rusty old machines. And we found some guys that had been in the industry decades ago. They helped us get it up and running.

VANEK SMITH: So Brandon realized that vinyl had this kind of superpower that CDs didn't. So initially, people opted for CDs over vinyl because CDs offered this really clean, consistent sound. And they were more convenient. You could play them in your car or your Discman. But digital music trumped CDs on both of those counts. And CDs just couldn't compete with digital. Vinyl, though, could because it offered something that CDs and digital music didn't.

SHAMIR: I mean, I love it. I mean, I always love anything that kind of sounds old. I think there's just that warmth in the crackle and everything.

WOODS: This is Shamir, an artist and musician from Philadelphia. Shamir has a couple of albums out in vinyl.

VANEK SMITH: This is, like, something you're hearing from fans. They want this.

SHAMIR: Oh, absolutely. Absolutely. It's, like - it's such a sought-after medium now, at this point.

VANEK SMITH: Shamir says fans - they feel very emotionally attached to their favorite musicians. And they want, like, a physical object to connect with. And, like, the big photo spreads and liner notes and all the extras on an LP - they really fill that desire. And so young fans especially have started buying record players and snapping up LPs.

SHAMIR: It's, like, really intimate. You're putting the needle on and, like, you're making a moment of it.

SEAVERS: Record labels and musicians love this, too, because LPs are a lot more profitable than digital music. Adele's double LP, for example - that costs $40 in stores, compared to $10 for the digital album and $12 for the CD.

VANEK SMITH: Yeah. Vinyl sales - they started rising around 2008. But things really took off when the stores jumped on board. Urban Outfitters was a pioneer, and then Target and Walmart started carrying LPs. And that was just a game changer. And they started placing these giant orders that the handful of vinyl makers in the U.S. could barely keep up with, like Brandon Seavers of Memphis Record Pressing.

SEAVERS: Walmart's got 4,000-plus stores in the U.S. So even if they only ordered 10 for every store, that's 40,000 records.

WOODS: So Brandon went from six pressing machines to 16. That meant he was going from producing around a million records a year to 7 million.

VANEK SMITH: But he points out vinyl has very real limitations. For one thing, record pressing machines are basically all antiques. They're fussy and they break down, and they require people who know how to run them and tweak them depending on the temperature and the humidity.

SEAVERS: Two things are required to make vinyl - steam and cold water.

(SOUNDBITE OF MACHINERY WHIRRING)

SEAVERS: Steam to heat the plastic up and to melt it and cold water to cool that record back down. And if - you know, if your steam isn't right and your cold water isn't right, you're not going to have a good record. And also, it's powered by a huge steam boiler that if you turn it off every day, you got to wait an hour and a half for it to warm up every morning. It's much more dark arts than it is science.

WOODS: It takes nearly 30 seconds to press each record, and that compares with a CD, which you can make in less than two seconds.

VANEK SMITH: Also, don't forget the raw materials, the vinyl itself, which basically all comes from overseas in these giant crates.

SEAVERS: You ever had a Nerd, the candy? They look exactly like Nerds. So you've got these little Nerds that are in different colors.

WOODS: Last year, when so many people were stuck in their homes during COVID, vinyl sales went bananas.

VANEK SMITH: And, you know, slow machines plus soaring demand plus raw material from overseas equaled a major supply chain strain and huge delays on record releases.

WOODS: Brandon's vinyl now takes months to arrive, and the turnaround time for a record went from around eight weeks to now it's about eight months for new clients.

SEAVERS: Eight, 10, 12 months in the music industry is life and death three times over.

VANEK SMITH: And then, in the midst of all of this, along came Adele. Her 500,000 LP mega order descended like a monolith onto the fragile, strained vinyl supply chain. Because even though vinyl's been growing for years, there still just aren't that many places on Earth that even make vinyl. And for the companies that do exist, like Brandon Seavers', there's this slowness - remember, 30 seconds per record. You can't rush it.

SEAVERS: I'm going to do some math real quick, all right? So if you're making two records a minute, 500,000 LPs is 174 days of production - six months. That's 24-hour days, seven-day production.

WOODS: Now, of course, if you're Adele or Ed Sheeran or Beyonce, you can probably just make it happen, pay what you've got to pay to cut the line and rush a record. But if you're an independent musician, like the ones who made vinyl popular again in the first place, like Shamir, the Adele factor happening at this particular moment means you probably can't get a vinyl album out for six months or more.

SHAMIR: Adele's not the culprit. And I think I...

VANEK SMITH: (Laughter).

SHAMIR: We were struggling with vinyl delay times before Adele. I think people are upset because Adele's not helping.

VANEK SMITH: Adele (laughter)...

WOODS: Adele is not helping. And this has affected Shamir. And Shamir has a new album coming out and has no plans to press any vinyl.

SHAMIR: I hate it as a small label owner, but I also made, like, kind of, like, a joke tweet where I was joking about, like, buying the Adele vinyl because it's just like, listen. Like...

VANEK SMITH: You're buying Adele on vinyl.

SHAMIR: Probably. I mean...

VANEK SMITH: (Laughter).

SHAMIR: The new single's amazing. She's amazing. And it's just like, if anyone wants to be mad at anything, don't be mad at Adele. Be mad at capitalism and - you know, and that's that.

VANEK SMITH: But all this really worries vinyl maker Brandon Seavers. He's worried that if vinyl cannot rise to this occasion, people will just move on from it again, musicians like Shamir will stop pressing records and fans will migrate to other formats that might also be a physical album that they can connect with but might be faster to produce than LPs so they can come out, you know, the day an album drops and not eight months later.

WOODS: And Brandon's actually already seeing that.

SEAVERS: It's astonishing. I'm like, there's no way you're selling them. They're like, we sold out. You know, we're making 50,000 CDs for this new release, and we're selling out. We never thought we would make CDs like that again. Cassettes are the same thing. There are a very, very limited number of cassette manufacturers left, and you can't get cassettes for months.

WOODS: By the way, the Adele album also is available on cassette. That's about $17 - a lot more expensive than the CD, by the way. The CD only costs 12 bucks. Go figure.

VANEK SMITH: Somehow, there's a cassette premium, which is interesting. But Shamir, our artist, you know, says do not count vinyl out. You know, he says vinyl, for all of its faults, still has that special warmth, that crackle. And when all the supply chain issues ease up, he actually does plan to release his new album on vinyl, and he's especially excited to hear this one song called "Cisgender" in vinyl.

(SOUNDBITE OF SONG, "CISGENDER")

SHAMIR: (Singing) I'm not cisgender. I'm not binary trans. I don't wanna be a girl. I don't wanna be a man.

VANEK SMITH: If you want to hear more stories about supply chain struggles and the very strange economic moment we're in, check out The Indicator From Planet Money. You can email us at planetmoney@npr.org. You can find us on Twitter, Instagram, TikTok and Facebook - @planetmoney.

The original Indicator episodes were produced by Brittany Cronin, Adrian Ma, Julia Ritchey and Taylor Washington. They were mastered by Isaac Rodrigues and edited by Kate Concannon. This PLANET MONEY episode was produced by Emma Peaslee. Our supervising producer is Alex Goldmark. I'm Stacey Vanek Smith, and this is NPR. Thanks for listening.

(SOUNDBITE OF SHAMIR SONG, "CISGENDER")

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