Taylor Swift’s sold out Eras tour has caused a massive shock in the world of ticket reselling, leading some fans to pay thousands of dollars even for those nosebleed seats.
In response, legislators around the country are taking action, including here in Texas.
This week, Gov. Greg Abbott signed a bill into law that would prevent the use of bots in online ticket purchases – all with the hopes of opening up more seats for fans and cutting into the business of scalping.
As for how successful the legislation will be, Texas Standard talked to economist and Bloomberg columnist Allison Schrager. Listen to the story above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: You know, I think this is an issue that goes way back in the history of concerts. I can remember back in the 80s, ticket scalpers were an issue and they would scoop up the first tickets out of the gate. Seems like this has been a war that’s been fought on some level for decades.
Allison Schrager: Well, yeah, I mean, there’s this inherent problem that some concert tickets are just… a lot of people want them and they’re in very small, finite supply. So you just have this excess demand and prices want to go up. And ticket scalpers are the ones who tend to fill that role.
So what about this idea of regulating the sale of tickets by banning ticket buying bots? Are other states doing this, and how is it going if they are?
Well, not too well, because the thing is you can ban bots, but there is such a large return to getting tickets and then selling them on the secondary market. They’ll probably just find another technology, another way around it. You know, you’re still going to have scalpers finding something to do to get the tickets they want.
I think just this week there was a story about a father paying $21,000 to take his family on the Eras Tour because his original tickets he bought from an online reseller never arrived. If you’re a legislator, what are the levers you can pull to stop that type of price gouging?
Well, I mean, I think the problem is he didn’t get the tickets. It sounds unfair, but the economist in me says if something’s in finite supply, you know, higher prices are probably what equilibrate to the market. So to some extent, the secondary market does fill this important role. I think a bigger question is why doesn’t the primary market sort of have more dynamic pricing so that returns can go to the artist rather than the secondary market?
Why has this taken on such importance at the national level? I mean, this was making, you know, front page news just a couple of months ago.
Well, I mean, as in the article that you sent me, you know, I think even the Texas legislator involved… her daughter was one of the people who really wanted to get tickets and couldn’t. So I think this hits really close to home. I mean, Taylor Swift, she has a huge fan base. There’s a lot of disappointed fans who didn’t get tickets. And I think they’re being quite noisy about it.
U.S. senator John Cornyn from Texas recently came out and said he’s planning on filing legislation that would require ticket sites like Ticketmaster and StubHub to disclose prices and fees before people purchase tickets. You think that has a chance of passing Congress?
Maybe. I mean, there seems to be a lot of momentum right now in Congress into more clarity around pricing, which, you know, who doesn’t support that? So, probably yeah, who’s against this? I mean, no one’s against transparent pricing.
Well, from an economist perspective, is there anything Taylor Swift or other artists can do to help with ticket prices?
Well, as I said, I mean, the legislation could allow for more dynamic pricing in the primary market, so you don’t have to go through the secondary market. It effectively takes away the incentive of scalpers to buy tickets lower essentially at the price the market would put on it and then resell it at that higher price. If Ticketmaster just charged that higher price, if you just let people bid on prices, that would effectively get rid of their market and then the returns would go to her. Another thing I was thinking about is remember in the 80s how people would camp out for tickets?
Oh yeah, sure.
Maybe we should do more of that because that’s harder for scalpers to get around. So maybe some share of tickets need to be bought in person and we could bring that back.