Obstructed View: What’s blocking New Yorkers from getting tickets
Ever wondered why tickets to concerts and other events sell out within minutes and then reappear for substantially more on resale sites? The New York State Attorney General (NYSAG) has been conducting an investigation into the event ticketing industry. Their investigation analyzed ticket allocation data for the highest grossing concerts in New York produced by AEG, Live Nation, and Ticketmaster, and found that the majority of tickets for popular concerts are diverted away from the general public. On average, only about 46% of tickets are reserved for the public, while the remaining 54% of tickets are divided among two groups: holds, reserved for industry insiders, and pre-sales, reserved for non-public groups like credit card holders.
The investigation found that the issue is complicated further by the broker industry, which can purchase large quantities of tickets to popular events by employing illegal Bots or exploiting their industry knowledge and relationships to get access to tickets. For example, NYSAG identified many instances in which Bots were able to purchase hundreds of tickets within moments of the release:
As well as analyzing ticket allocation data from vendors, the investigation also looked at American Express transaction data for New York State (and surrounding areas) between April 1, 2013 to March 1, 2015, to get a clearer picture of broker activities.
NYAG analyzed transactional sales data for events in New York produced by six ticket brokers to estimate the margins they typically obtained in connection with their resale of tickets. The data cover sales by these six brokers made from 2010 to 2014 and include over 90,000 transactions. All reported transactions for which a sales price and cost per ticket that exceeded one dollar were identified in the data were included in the analysis. The analysis estimated a markup for each transaction, which is defined as the ratio between the net revenue earned by the sale of an individual ticket and its cost. The average broker markups were then calculated across all transactions and weighted by each transaction’s face value.
From this analysis, NYSAG found that on average brokers mark up by 49%, but sometimes by more than 1,000%, and in once instance by more than 7000%. Moreover, the analysis also revealed that brokers who commanded the greatest markups in the ticket resale market were those that used Ticket Bots, and that the most sophisticated, custom Ticket Bots were associated with the highest markups:
Ultimately, by conducting these data analyses the NYSAG was able to identify several concrete steps industry participants can take to make the system fairer and more transparent.
"We believe that the legislature should hold hearings on the subject of ticketing in New York to challenge key members of this industry to put forth how they might help more tickets get into the hands of “ordinary” fans"
Read the investigation's full report here.
Image: giulio nepi