By Jim McCarthy Aug 2, 2010 4 comments

Life, Liberty and the Right to a Printed Ticket?

In New York, the state government has continued to pass laws directly related to ticket resale.  This time, it’s “guaranteeing the right to a paper ticket.”  Here’s the story and here’s a snippet:

“With little fanfare this month, New York State bucked a show biz trend pushed by Ticketmaster and megastars Bruce Springsteen and Miley Cyrus, likely becoming the first state in the nation to guarantee concertgoers a printed ticket.

The law – signed on July 2 by Gov. David A. Paterson as part of a larger scalping bill – slows down moves by Ticketmaster, Madison Square Garden and other companies toward a “paperless” system.”

Here’s what this is all about.  Secondary Market sellers do their best to buy up under-priced ticket inventory from venues when hot shows go on sale so they can resell them at a markup to others.  Some musicians, like Bruce Springsteen, would rather that fans be able to buy them at the price he sets and not have to pay a mark-up.  Meanwhile, Ticketmaster and other primary sellers would greatly prefer that people resell their tickets through the ‘official’ secondary channels, where they make money on the second sale.  So in this way, the interests of acts like Springsteen and ticketers like Ticketmaster are aligned.

But there’s another side to this.  Without a paper ticket and with the requirement that the name and credit card number of the person who picks up a ticket match the one who purchased it, tickets become impossible to give away or sell.  It’s easy to be unsympathetic to brokers trying to corner inventory on a hot show, but if you’ve ever given your friend a ticket you couldn’t use for some reason, this affects you too.

And what about the whole idea of private property?  If I buy something, don’t I have the right to do something with it?  There aren’t any security implications to a concert or show ticket, so there’s no way to try to sell that bologna.

Why then all the concern about stopping people from having a ticket that they can use as they want?  I don’t doubt for a second that Bruce’s motives are reasonably pure (he wants to be able to provide value to the fans who like him the most, and, by the way, fill the venue) and the ticket sellers (Ticketmaster, et al) don’t hide the fact that they want to profit from the secondary market, and obviously, everyone in the secondary market wants the paper ticket option because it makes secondary selling outside the official channels much easier.  Everyone’s got an agenda, yes, but they’re right out in the open.

Is it really necessary to legislate this?  Since someone can work up righteous indignation on either side of this issue, what’s the state government of New York’s purpose for getting involved?

Isn’t this a great example of when it’s right to let the market decide?  If people reject paperless tickets because they’re inconvenient and inflexible, that will be reflected in lower sales and lower values.  If people reject the secondary market on events like Springsteen’s, those brokers won’t be able to make a good profit on the show and prices will drop.  Or some would like it a paperless solution while others hate it.

My question is this:  what’s the worst that could possibly happen if there were no law on this subject?  A few people would willingly “overpay” for a ticket on the one hand; and on the other hand, a few people would be hassled because their last-minute visitor from out of town was keeping them from getting to a show and they couldn’t give their tickets away.

Honestly, do we really need the government’s help working through those issues?

Maybe we should ask Governor Paterson to support legislation to designate a certain percentage of each house should be priced at less than $20.  Of course, the law would have to index the $20 to inflation, and we’d have to make exceptions for shows under a certain size.  You’d need a special permit to go below the designated percentage if you could prove that your event had sufficient demand that $20 tickets would cause a financial hardship to your organization, and that would require a new form to be submitted, subject to approval by a Big 4 accounting firm, and since the state government would have to certify those, they’d need to add a sub-bureau in the State Capital in Albany, staffed with attorneys and accountants to approve all those permits.

Because after all, why not?  If buyers and sellers can’t work out this issue in the secondary marketplace, why should we be trusted with pricing in the primary market?

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