Steven Pearlstein’s column in the business pages of today’s Washington Post takes note of Ticketmaster’s growing efforts to become the officially-sanctioned secondary market for an increasing number of teams, venues, and performers. As we have mentioned here before, active secondary markets for tickets can be a good thing for consumers as well as sellers.
Having “officially sanctioned” secondary markets can be a good thing too. The designation of a particular secondary market will help coordinate buyers and sellers who would otherwise more likely be dispersed over multiple marketplaces. Bringing them to one place should facilitate trading and reduce the bid-ask spread. Such a market can be more efficient.
However, it is one thing to observe that having a dominant place to trade can be a good thing for consumers and quite another to assert that, therefore, it should be illegal to trade on any site not officially sanctioned. Stamping out the competition will clearly benefit the secondary market operator — increasingly this is Ticketmaster — but likely at the expense of consumers and not to their benefit.
Not surprisingly, Ticketmaster is lobbying for the change. (See the Wall Street Journal, listen to NPR or read the NPR story transcript.) Ticketmaster, which once was all in favor of laws against resales (i.e. sometimes called “scalping”), now has the more refined position that an officially sanctioned company should be allowed to resell tickets, but the law should prevent anyone else from doing so.
As Ticketmaster’s president says in the NPR story:
I agree. If performer or athletic team wants to collaborate in squeezing cash out of their fans to the benefit of Ticketmaster, they should be free to do so.
But fans should be reluctant to support performers or teams that favor calling the cops to prosecute fans that trade tickets. An active secondary market is good for fans and can be good for performers, too. I’m more likely to become a season ticket holder if I can readily unload tickets I am unable to use. Having an officially-sanctioned secondary market may make it easier for me to readily unload tickets. However, if you are going to sic the cops on me if I resell to my co-worker down the hall rather than pay another service charge to Ticketmaster, maybe I’ll pass on those season tickets.