TicketMaster, Taylor Swift, and the Future of Tickets

In recent news, Taylor Swift partnered with TicketMaster to introduce a new ticket-buying system that would help fans “beat the bots.” Instead of a standard queue as instituted for some events such as New York’s infamous Comic-Con however, the fan’s position in line could be advanced and authenticated through shows of “real fandom.”

Or at least that’s how they’re pitching the new #TaylorSwiftTix system.

Because the factors that would change the fan’s position in queue include things like posting about the event in social media, buying other Swift merchandise, and just about anything that would either give them more money or help them market. If it does help beat the bots, it’ll make people go back to the good old fashioned “beating other people.”

Now I should make a disclaimer that I’m no big Taylor Swift fan (though I admit have a small weakness for “Mean”), but I can’t help but find myself both horrified and unceasingly fascinated by this push.

It’s easy to see why fellow concert-goers would be antagonistic about it. The whole thing reeks of a cash grab. They’re beating the bots by making real people authenticate themselves either through cash or social capital. Nobody has any space to put their 12th concert T-shirt and at the same time– aren’t socially unaware enough to spam their 9th excited tweet about the same upcoming concert.

The worst case scenario is that the people who do end up splurging and getting the tickets are the same people who buy the inflated botted tickets in the first place. Then what’s left will go to the lucky few who clicked fastest in the earliest seconds… or those who have now lost half their twitter followers from repeated spam.

The best case scenario? Non-monetary actions are awarded just as much if not greater than monetary, rewards for actions have decreasing returns, and there actually being enough tickets for the fervent. Unfortunately, the first and second points just don’t make sense for a for-profit company– nor do they award the most dedicated of fans and instead prioritize the median of the bell curve.

Yet if we can abstract ourselves away from the possibility of personal costs (“Will this affect me somehow in the future?”), I have to say that this is actually the most equitable way of distribution. In classical economic supply-demand, price increases with increased demand and decreased supply. We’ll pay more for it if we want it more. We’ll pay more for it if its rare.

The limited number of tickets to a particular concert is a prime example of a limited supply of a good, and so it should make sense that in a free-market it’s price would rise until the last ticket sold is sold to the last person willing to pay the highest price for it:

On the left, we have the classical demand and supply graph (I can already hear the collective groans of every economics and business major). As the price increases, supply increases as more profits are to be had, while demand decreases as people leave from increased costs. But that is only in an environment where supply can be flexible. Now notice the graph on the right, what changes here is the introduction of 2 new demand curves: one for Taylor Swift (higher than the original as she enjoys higher popularity) and one for me (much lower because no one wants to hear me sing).

In a regular product market (hats, hardware, etc), the price would be dictated by where demand meets supply. On the left, that is $50 (assuming the stadium coincidentally caps at 1500). On the right however, we cannot actually move the supply curve beyond a certain point– we have a hard cap at physical capacity. So instead of getting the pricing from the blurred line (where blue meets red at $62.5), we have to go straight up from 1500 until it hits the red demand function and then left– arriving at $75. For my concert, demand doesn’t ever even hit 1500: meaning that unless I extend the function to the negatives (literally paying for people to come), it will never fill up the stadium.

So the system that we currently already have for tickets is broken (or at least not 100% efficient). Because if it wasn’t, concerts would never sell out past capacity–the last ticket sold would always be of a high enough price that the last buyer was also the last person willing to pay. Instead we have concerts that do sell out (tickets underpriced) or do not sell out (overpriced).

If that’s the case, TaylorSwiftTix seem like it couldn’t possibly be more fair because of its reward for non-monetary actions. Is it not perfectly justifiable that those willing to spam their facebook walls and twitter feeds at the incessant annoyance of their friends and family in the name of fandom be entitled to something for their efforts? The same goes for those who spend the undoubtedly hundreds of dollars on concert shirts, glow-sticks, and other goods.

For the latter, the only real difference is that the money is going rightfully to the artist and her distribution channels– rather than some external 3rd party middleman. In classical economics, the prevailing way that we currently price sellout tickets makes absolutely no sense. Additionally–with the switch to streaming, decrease in CD sales, and cultural shift of music becoming more of a performance experience, this sort of new revenue almost seems inevitable.

I do think I know why there is that visceral reaction against this however. If we abstract away the specifics and details of the system: the business entities, the industry, and combine the monetary and social aspect into just one factor (price to consumer)– this whole thing is reminiscent of the outcry against Uber’s surge pricing.

Because wealth isn’t distributed equally. The victim of Uber’s surge pricing could be a woman rushing to see a friend at a hospital losing to someone just going clubbing. Since one’s means may differ so widely from person to person– the absolute price we are willing to pay isn’t an accurate assessment of our demand. Though for Uber it was a concern of emergencies that could mean life or death, it doesn’t make the reaction any less sharp for concerts.

Though I mentioned earlier that I think TaylorSwiftTix would succeed, I am enormously curious on what its consequences would be. Because this sort of system directly pits fans against fans. No more is it an inactive competition reliant on luck and scheduling (rampant refreshing of the ordering page, anybody?), but makes it an active and ongoing process stretched over a period of time.

How long can that possibly last for? People can post about the concert for a couple of days until they are tired of it. They can buy one of every merchandise until their room is full. But every action brings to it a sense of fatigue and an even emptier wallet. How long until that turns into disillusionment and abandonment?

That, I think is the real obstacle that stands in this scaling for others in the industry. Swift is in a unique position because of her huge following– though I’m sure other artists like Harry Styles and Ed Sheeran might be able to pull it off as well. But– and hopefully– this sort of system may be something that will only be viable for those either at the apex of their careers and don’t mind/willing to take a bit of fan turnover.

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