Balancing Security and Freedom

You’ve heard the Jefferson quote about trading security for freedom?  Strangely, that seems to be the issue with Live Nation’s new alternative ticketing method.

Live Nation seems to be making Live 2.0 headlines a lot these days, and this time it’s for the introduction of wristbands as an alternative to paper tickets.  Here’s a snippet of the story: ”

“The world’s largest concert promoter Live Nation says it’s piloting new digital wristbands to try to combat ticket fraud.

The company, which books tours for the likes of Madonna and Jay-Z, has been testing the new “smart-chip” bands at small festivals.

Live Nation says eventually it would like to get rid of paper tickets.

John Probyn from Live Nation UK said: “Your ticket won’t be a paper ticket, it’ll be a wristband unique to you.”"

What’s not clear from the story is how the wristband is better than, say, a paper ticket with your name on it.  They are building some new features into it, such as “stored value” capabilities, meaning you can buy food and drink with money you’ve stored on the wristband, but they could (and do, particularly at MLB stadiums) do that with a paper ticket too.

And how this is superior to a bar code delivered through a cell phone I don’t see either.

Because there are still some fundamental issues here, and perhaps the info just isn’t in the article, but someone from Live Nation could clarify it for me.  When someone buys more than one admission, is it required that they name each wearer?

And how is it possible to transfer admissions if, for example, I can’t make it to a show I’ve purchased a wristband for?

And in terms of distribution, do I buy an e-ticket and then come to a window at the venue to pick up the wristband or does it require physical delivery?

I definitely get the idea of preventing fraud because that’s bad for the industry, but since fraud is relatively rare, making admission more difficult and less flexible for everyone means there’s a cost-benefit analysis that has to be undertaken.

Also, it’s very clear from economics that if you take away someone’s ability to sell something they own, the value of it goes down.  Imagine if you couldn’t sell a car you bought new, ever.  The residual value that you expect to be there in 6 or 8 years just wouldn’t exist for you.  You’d either have to drive it til it fell apart or abandon or give it away.  You’d certainly pay less, knowing that you wouldn’t be able to get a few grand for it when you were ready to buy something new.  Likewise, how many season ticket holders for sports decide it’s ok to commit to a whole season because they know they can get some of their money back on games they can’t get to?

I don’t have any data on that, but it’s a lot.

And then there’s the inconvenience of not being able to give the thing to someone.  Nothing’s worse than holding tickets that are going to go to waste.

A slightly more cynical look at this would suggest that it’s not really (or at least not primarily) about preventing fraud, but about taking control of the secondary market.  If you take away all methods of re-selling something except the official one, you’ve essentially eliminated the secondary market for those tickets.

That could be fine, but in general, very few things in our economy are controlled like that, and when they are, it’s for a really good reason, like public safety or preventing the undermining of the financial system.  If someone told you that you could never sell your big screen TV to anyone else, but you could bring it back to Best Buy to put in their re-sale market and justified it on the basis of the fact that some people had gotten ripped off buying TVs on Craigslist, you probably wouldn’t accept their logic.

Anyway, the article was pretty vague and left a lot of wide open questions.  I think it would be illuminating for this audience if there were more information about this, which I will happily publish.