Ticketmaster Goes Paperless to Cut Out Scalpers

By  |  Friday, September 18, 2009 at 2:34 pm

ticketmasterThe middleman’s days may be numbered by a new paperless ticketing system that is being introduced by Ticketmaster, according to reports.

I have yet to go to any concert or sporting event that didn’t have scalpers soliciting sales outside, and they are not alone–brokers buy lots of tickets and sell them on eBay at inflated prices. That frustrated me when I attempted to purchase U.S. Open tennis tickets earlier this month.

Although I am not a fan of Ticketmaster, paperless ticketing is a good idea. The paperless system requires that tickets be purchased online by customers, and customers prove their purchase by showing gate attendants their credit card and identification when they arrive at an event.

Ticketmaster was mindful to set up an electronic exchange where customers can resell their tickets. Naturally, it charges a “convenience fee” for transactions, but it helps keep prices down by eliminating the need for secondary ticket exchanges including eBay subsidiary StubHub.

My U.S. Open tickets were purchased through StubHub, and I felt like I was ripped off by paying an additional mark up. The AP reports that Ticketmaster’s exchange transaction fees amounted to $1.95, or 15 percent per ticket, during a pilot at Penn State University.

Fees were raised to $7.89 during the Nittany Lions’ home opener, and revenue was shared with the university. There’s a reason why the company has earned the not so endearing nickname of “Ticketbastard.”

Ticketmaster has  a near-monopoly over ticket sales, but competitors including TicketSherpa.com have sprung up, and musicians who have taken a stand on behalf of fans have helped to keep its fees in check.

Nine Inch Nails, which has been critical of TicketMaster in the past, is supportive of its paperless system. On its Web site, the band said that the system was “an effort to keep tickets in the hands of the fans and out of the hands of brokers/scalpers.”

I welcome paperless ticketing, partly because I do not see why it is necessary to print out tickets anymore during the digital age, but also due to the fact that scalpers really annoy me. I think that we’d all be better off if they took up selling beer in stadium parking lots instead.


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5 Comments For This Post

  1. Mike Bouchard Says:

    From reading the article, I see this as another revenue source for Ticketmaster. I am all for trying to stem the scalping problem, but adding more fees to an already fee heavy purchase is not the way.

    From the AP article.
    “For the initial sales run, fees amounted to a little more than $4 per ticket, but on resales the buyer was required to pay $1.95 and a 15 percent transaction fee — up to $10.95 a pop.”

    I see several scenarios where requiring a CC could be problematic. Purchasing tickets as a gift, people purchasing tickets together, but arriving separately, Someone getting sick at the last minute and giving their ticket to a friend. All the above would require that the “buyer” pay extra to have the ticket transferred to them.

  2. tengeta Says:

    Sounds good… for them. I’m not too big on just handing my credit card around for reasons that don’t even involve active purchases.

  3. JohnFen Says:

    I think this is a terrible thing. In the first place, it eliminates purchasing tickets with cash and (at least) complicates and increases the expense of buying tickets as gifts to others.

    The first of these is more important to me personally, as I hate paying for things with plastic in general and I sure don’t trust TicketMaster with my personal information in particular.

    From a purely visceral level, I love paper tickets. I love having them hanging from the refrigerator door, reminding me of the pleasant event to come, I love the ritual of handling them on the way in,and I love having the stubs as keepsakes. I would mourn the passing of paper tickets.

    Besides, I’ve never really understood what was so bad about scalpers in the first place. I’ve never done business with them, but the idea seems harmless enough in principle. All I’ve been able to gather is that there’s an issue with scalpers buying large blocks of tickets to sell later, but that’s easy to address without going paperless. I don’t get it.

  4. scalper Says:

    Ticketmaster simply wants a monopoly on the sale and resale of tickets and all possible profits associated with the business of concerts to provide enough income to satisfy the stockholders and make Irving rich.

  5. Steve Says:

    Go the scalpers. We all live in a capitalistic society and it is a principal of capitalism that the item will only fetch the price that it is worth. It is a capitalistic venture for scalpers to embark on and may be risky also if they cannot sell all of their investment. Not to mention that they do spend a considerable amount of time and effort to acquire and on sell the tickets. So as far as I am concerned they are earning their profits.

    If someone wants a ticket to an event they can get a ticket if they take note of the time they go on sale and make sure they are there to buy. Scalpers seem to manage to get tickets. I know that the gripe of some is that scalpers buy up big consecutive lots of tickets causing others to miss out. Ticketmaster doesn’t have a problem with this?

    I’m sure some people probably even have standing orders with scalpers as it is worth the extra they pay to have someone else secure a ticket on their behalf. They can go on with their day working or whatever knowing their ticket is there for them.

    I am not a scalper and have never purchased a ticket from one but I might if I really wanted to go to and event and couldn’t get a ticket otherwise. I’d probably have a gripe as well but I’d get over it and enjoy the show anyway.

    On the other side of the coin, I do feel for the fans who are on the lower socio-economic end of the spectrum. It does seem a bit unfair for them. But that is capitalism for you. Those with the least often seem to have to pay more than those with more.

    Scalping is just another business to me. It might not be fair but it is a business. It is like the person who has the know-how to buy items cheap from China and re-sell them at home for a big profit. They make plenty of money but they put in alot of work and face the risk of losing alot as well.

    I think that the main problem is that Ticketmaster is a near monopoly and because of that it enables scalpers to get alot of tickets. If there were a whole lot more ticket sellers then regular fans might have more of a chance of getting the tickets before all the scalpers snap them up. Maybe some of the scalpers would be interested in becoming legit sellers. The problem then becomes who decides how many tickets different sellers get to sell?

    I saw an old episode of Seinfeld the other day (back in the 80’s) and they had extra tickets to an event and sold them outside for a good profit. They didn’t plan to do it but the tickets became excess to their needs and why not sell for a profit? Then they get to see the show for free. Sounds good if it’s you getting in for free, doesn’t it. Anyway, it’s not just the scalpers who sell tickets after they have been purchased for the first time. There are plenty of people who probably find themselves having to sell tickets,(they intended to go but something more important came up)and I think selling them for more than they paid is a form of compensation for missing out on the show.

    These comments are just my opinion and I certainly haven’t covered nearly every aspect of scalping. Sure, it isn’t fair for some, but that is life in general. The alternative from where I stand is to have an over regulated market where prices have to increase to pay for a growing bureaucracy that was originally created to keep prices down. But we all know that when you create a bureaucracy you create a hungry lion that keeps on growing and becoming more and more hungry. Russia tried it and it didn’t work. A free market is the only real control on pricing as no one will buy if they are too expensive.