[mhartl]

For his shows, C.K. saw scalping rates as high as 25%, driving up the price of his shows for people who wanted to attend, by those who didn’t.

The only people driving up the price of the shows are people who want to attend. How could it be otherwise? People who don't want to go to the show certainly don't raise prices. If scalpers can profit, it means you aren't charging market price. Policies like the one described in the OP simply shoot the messenger.

If the market price is too high for some fans, have a lottery with an aftermarket. Once they see the market price, low-income lottery winners can decide whether they'd rather attend the show or sell the tickets to pay the rent.

It's not like these issues haven't been studied before. Do a few web searches, or consult an economist. If you don't accept that your naive economic intuition is wrong, you're going to make stupid decisions that often exacerbate the very problems you're trying to solve. (I'm looking at you, Burning Man.)

[diek]

You're operating on the flawed assumption that the sole endeavor here is to extract as much money from consumers as possible. If $45 a ticket allows Louis C.K. to make a tidy profit while still being affordable for his fans, but a third party buys all the tickets and resells them for $55... sure, some of his fans may shrug and say, "Well, I guess $55 isn't too bad" (price elasticity, etc, etc)... but why would Louis C.K. enable that behavior?

[mhartl]

You're operating on the flawed assumption that the sole endeavor hear is to extract as much money from consumers as possible.

No, that's why you have an initial lottery. With a lottery, poorer fans still have a chance to get a ticket.

[timbre]

A lottery doesn't seem to me to do anything but mitigate the benefit of fancy redialers or other automated ways of getting your ticket order in first. With or without a lottery, allowing resale for profit gives people willing to pay more a better shot at seeing the performance. Preventing it means everyone who's willing to pay the set price has an equal shot. I've always assumed that's the goal of anti-scalping schemes.

[maxerickson]

Louis C.K. is attempting to transfer the benefit from the messenger to people that actually plan on attending the show.

He is apparently happy to suffer the market inefficiency that leads to his fans seeing cheaper ticket prices.

[ghshephard]

I didn't really understand BMORG's response to a ticket shortage - Lotteries play right into the scalper strength - the ability to file lots and lots of requests with different credit cards. I only had three active credit cards, so I could only enter the lottery three times (I didn't get a ticket this year) - but scalpers have a whole catalogue of credit cards and addresses to purchase tickets with. They must have been chuckling with glee when they saw the system this year.

[drcube]

Explain the Burning Man comment please.

I'm involved in the local Burners scene, but I've never been to the the big one in Black Rock City. My wife is going this year with a friend, but she was gifted a ticket. So I would like to know what stupid decisions and exacerbated problems I will see if I decide to buy a ticket for next year's burn.

Thanks.

[mhartl]

Last year Burning Man sold out for the first time. In an attempt to alleviate the shortages, this year they had a lottery where people could request up to four tickets per person. The obvious strategy was to request more than you needed, in order to hedge your risk of losing the lottery (essentially a prisoner's dilemma situation). The utterly predictable outcome was worse shortages. They added an aftermarket to "fix" the problem, but (like Louis C.K.) they capped the price at ticket face value. Since the market price is higher, this guarantees shortages.

[peterwwillis]

It's almost strange that they would implement a system like this just because they sold out for the first time. Other regional burns around the country regularly sell out up to a month before the event, and they never implement alternate strategies for people to buy tickets. Then again i'm not aware of a scalper market for these since they are small and regional, but I have often considered buying four tickets at the lowest introductory price and selling them a week before the event ("Hello, my name is Peter, and i'm a capitalist.")

[unwiredben]

Burning Flipside here in Texas has had a lottery system for the last few years due to not being able to exceed 2500 people on site or be under the TX mass gathering law. They make the lottery a little inconvenient (sign up in early January, mail in a money order during one week later in the month, have the MO returned if you don't get tickets). They also have a no scalping policy and regularly go after sales on Craigslist and other sources for more than face value.

[scoot]

not being able to exceed 2500 people on site or be under the TX mass gathering law

Sorry, what? have all major sporting events been cancelled too?

[damncabbage]

No, it doesn't permit gatherings of more than 2500 people to last longer than five hours without a lot of overhead (money and paperwork):

http://law.justia.com/codes/texas/2005/hs/009.00.000751.00.h...

[unwiredben]

no, it's just that when you exceed 2500 people, a bunch of special provisions come into play, like having to provide water, security, vending, etc. that clash with the self-reliance/gift-economy aspect of a burn.

[ben0x539]

> Since the market price is higher, this guarantees shortages.

I don't really understand this. There's obviously more people who want to see the event than there's room, so isn't that what guarantees the shortage?

Raising the price just artificially moves the point where you say "welp, can't go" from not being able to find a ticket to not being able to afford one. It doesn't really improve availability?

[dredmorbius]

That's how economists define "surplus" vs. "shortage".

There's a shortage of a good when the price is set lower than what the market is willing to pay. The economist's solution is to set the price higher (this may also encourage means of increasing supply, depending on price elasticity of supply).

There's an excess of a good when the price is set higher than what the market is willing to pay. The economist's solution is to set the price lower (which may also result in some producers exiting the market and/or reducing output).

There are problems in this theory where it intersects with social / political / physical production. Food, for example, is relatively price-inelastic: there's a certain amount of calories people require to survive on a daily basis, and all the price pressure you can apply isn't going to move mere calories by more than a relatively small amount up or down (people will either starve or become obese). Though you can manipulate food quality: meat (more resource-intensive than vegetarian diets), nutritional quality, freshness, organic vs. artificial / technologically intensive agricultural methods.

[blhack]

*Two tickets per person

[mhartl]

"Up to four" covers two. There was an early lottery that allowed four. (I got four myself.)

[blhack]

Was that the lottery back in, like, November? The lottery in January only allowed 2 per person.

[blhack]

The bmorg completely disenfranchised large parts of the community with a "ticket lottery".

Earlier this year, we were seeing theme camps with something like 10% "success" rate in the lottery, and a lot of the major camps weren't going to be able to go.

It was only through a last-ditch effort, cancelling a second lottery and giving the tickets to "established" camps that they were able to get some of the major theme camps to go.

The lottery played heavily in the favor of scalpers, who very obviously exploited it to their own gain, and this was something that the community had been screaming up and down about since the lottery was announced last year.

[mhartl]

It's not the scalpers who are to blame. It's bmorg (and the broader Burner community) that's at fault for ignoring basic economics and human behavior. Everyone with a rudimentary understanding of game theory saw the whole mess coming a mile away.

[blhack]

The broader burner community (hi!) were the ones screaming at the borg that this was a terrible idea. They didn't care.

[mhartl]

Some screamed about the lottery, but capping secondary sales at face value is a deeply entrenched (and, in my view, terribly misguided) part of Burner culture.

[blhack]

Please explain why capping secondary sales is a terribly misguided thing...

[jes5199]

It's easy to blame scalpers, but I'm not convinced they're a major component of the shortage.

Lots of large events sold out this year much quicker than usual: the Apple Worldwide Developers Conference, Penny Arcade Expo, and others.

I think that the recession is less of a concern for many of us this year, so there's pent up demand being used. Add a lottery to increase the sense of urgency, and you get a lot more people registering for tickets. Not scalpers, just people who haven't been going every year.

[batiudrami]

I had no idea how bad the scalping situation was in the US until I tried to get tickets to a Lollapalooza aftershow (I live in Australia, and am going to Lolla as a part of a holiday).

I waited up late to get tickets, was on at exactly 10am Chicago time, suffered a website crashing hard and, within 15 minutes, the gig had sold out. Defeated, I went to bed (it was pretty late in my time zone).

Next morning, I got up, and there were 400+ tickets for sale on StubHub. For a 1300-person venue. Even if 100% of scalped tickets went on sale, on one website, within 10 hours of the event going on sale, that's still 30% scalping rate. If anyone is wondering, it was Childish Gambino at the Vic Theatre.

Now, I agree that part of the solution is to charge more for tickets (and I'm used to it - a lineup like Lollapalooza's would be impossible in Australia - tickets to a RHCP gig alone go for $150+). However, by allowing scalping to this extreme, Scalpers can buy 10x$30 tickets and sell only 2-3 of them at a ridiculous price to superfans and still turn a profit, leaving the rest unused. Everyone loses except the scalpers.

Big festivals in Australia print your name and date of birth on the ticket, and either only allow you to resell the ticket back to the festival (at cost), who then on sell it under a different name, or charge a fee to change the name on the ticket so that resellers are at a disadvantage. Both have their disadvantages, but both are better than the current situation in the US.

[Androsynth]

yeah I'm confused, isn't scalping a necessary side effect of the process? It seems natural if you sell tickets at a constant price over time and don't adjust that for higher demand (as event gets closer in time) or lower supply (as tickets are sold).

Also, is scalping a bad thing? It seems to me that they are making the market more efficient.

[joezydeco]

Scalping confuses demand.

If 1000 people want to see a show in a theatre with 1000 seats, that would be an ideal market. But in reality you get 2000 people trying to buy tickets for that show. 1000 are the fans and 1000 are people trying to buy the tickets to flip them for a profit.

The artificial demand creates a market that benefits nobody except the scalpers. The fan loses by paying higher prices, and the artist loses (sometimes) by leaving money on the table. This is why Madonna and the Eagles are charging $750 for front row seats.

[dkokelley]

The artificial demand you mention is essentially speculation. The scalpers are betting that the actual price attendees are willing to pay is higher than the initial selling price, which leads them to buy the ticket. This system still requires players who ultimately purchase the tickets for the utility of seeing the show. If $100 tickets ultimately get sold for $2,000 to actual attendees, the original seller significantly underpriced their tickets. There was a full market of people willing to buy the tickets for $2,000 for the show. Scalpers didn't mess with this market or confuse demand. They made the market efficient. The fans who valued the show the most got the enjoyment utility of attending. This system primarily hurts the fans who couldn't afford the more expensive tickets. On the other hand, without a secondary market, the fans who valued the show the most are harmed.

The only way that scalpers can create artificial demand is if there are no attendees willing to pay the price scalpers want to charge. In that scenario, scalpers sell to other scalpers at higher and higher prices, and the last person (scalper) to buy loses. If the last scalper buys the ticket for $4,000 and there is no party willing to buy the ticket for at least that AND see the show, the scalper is left with two options - go to the show (which by definition for the scalper provides less utility than the ticket price warrants), or sell the ticket at a loss (or possibly for $0, if there are no buyers).

I think there is a good analogy to other forms of speculation, particularly in commodities. Speculators "drive up" the price of oil by buying and selling it for more and more, but as long as consumers are willing to pay for that oil, the price is justified, and the original sellers forfeited their potential profit.

Granted, oil and housing speculation can lead to bad things for the economy as a whole. Here I think the analogy fails, since tickets are inherently a temporary market with an expiration date. Without an expiration date you can have bubbles, and bubbles can burst.

[brianpan]

I'm definitely not an econ expert (far from it). Scalpers may not be confusing demand. But aren't they're artificially constraining supply? There are a limited number of shows and seats available.

If I'm a scalper and I buy the last 100 seats (or rather, I have the last 100 seats not taken by someone who actually is going), I can now sell the tickets at a premium. If there are only 75 more fans that want to go, they are forced to come to me and the prices go up artificially. I can still profit without selling all the tickets. Without me the scalper, there would have been enough tickets to go around at face value.

Yes, the price is going up because people are willing to pay for it, but without the scalper it wouldn't have happened.

[xenophanes]

It's not scalpers who are constraining supply.

If a show has 1000 seats, and 900 fans buy the first 900, and never consider reselling at any price, then they are the ones constraining supply relative to an efficient market. (And there's nothing wrong with that, shrug.) The scalpers, by reselling tickets instead of just holding them and ignoring the market price, actually are increasing the amount of tickets available on the market, not lowering it.

Imagine if there were zero scalpers. Then it sells out and price goes to infinity. How can price go to infinity? Because supply is being constrained to zero because people refuse to consider reselling. Scalpers delay that some and keep the market more robust, while also making a profit from underpriced tickets.

And you can never ever sell a ticket to someone for more than the value of the show to them, so the buyers never lose.

All they are "losing" is the ability to get underpriced tickets (tickets for less than they are willing to pay) from the original seller who could have charged more (since he controlled all the tickets) but, for whatever reason, preferred to leave some money on the table for scalpers.

[vacri]

wow... you consider a market to be something which maximises all possible monies rather than something where you obtain something for use. No wonder this 'scalpers are helping the system' theme sounds crazy.

[jessriedel]

In the short term, there are a fixed number of hard drives (and beach balls, and microwave ovens, ...). Why don't we have to worry about hard drive scalpers artificially constraining the supply?

[jamesbritt]

Interesting question. It made think of another situation.

How often would CK have to perform to make scalping essentially a non-issue?

More than once a year I would guess. But once a month? Every week?

What factors determine this?

[invisible]

There is a much smaller quantity of seats that need to be acquired to scalp the market and push out competition. The spread is much higher if you know there is a relatively high demand that cannot be justifiably spent elsewhere.

[brianpan]

Shows are much more constrained. It's the very specific "skilled labor" involved (only one person can produce a show in only one city, maybe two a night). Imagine if you needed a hard drive factory in each city and only one factory could run at a time.

I can't buy a show for Denver. I might not even be able to buy a show for Friday nights. That severely limits the pool of "supply" I can buy from. Louis might be in my city once a year for a few days if I'm lucky.

[joezydeco]

You're right: it's speculation. I should have used that term outright.

The problem I see is that it's speculation with a known outcome. If I buy gas or oil forward contracts, it's a play with non-zero risk. Iran might declare war or we might invent Mr Fusion tomorrow. So far so good.

But with a concert, let's be a bit more realistic. If the Rolling Stones decide to tour and play in your town this year you can be 100.00% sure the concert would sell out. If they quadrupled the dates in that town, they would still sell out. For a given set of acts that scalpers target, there is no possible way that there is a risk of scalpers holding expired tickets...unless they get greedy.

[dkokelley]

I think the terms "no possible way" and "100% sure" are inappropriate for an economic discussion. There's always the possibility of some event occurring.

What you're implying is that there is infinite demand for a Rolling Stones concert at any price. As far as I know, this is a concept on the extreme edge of economic theory. Maybe there could be infinite demand for necessities like oxygen should we be forced to make a decision, but for a concert the notion is absurd. If the tickets were priced at $1,000,000 per seat, I doubt you would sell out.

The bottom line is that there IS an appropriate price which will maximize consumer and producer surplus utility (the positive difference between what you were willing to buy/sell the goods for and what you actually bought/sold the goods for), and scalpers/secondary markets will exist when the principal seller misprices the tickets. Without the secondary markets, that ideal price will probably not be reached, and there will be a shortage or surplus of the goods.

[sambe]

How is there artificial demand? The scalpers aren't buying tickets for fun - there has to be someone to flip them TO. These people are fans and they create the demand, as stated in the grandparent.

Edit: a common "rebuttal" in this thread (see diek, potch, drivingmenuts) seems to be that there is an assumption of correct market price being the aim. That isn't the assumption or the point. The point is that excess demand creates the problem. There are several approaches to this (first come first served, lottery, aftermarket) but getting rid of scalpers doesn't solve the fundamental problem. The only thing they (may) be doing wrong is going against the wishes of the artist (if they prefer to use another method). It's not clear that e.g lottery is better than finding the true price (or vice versa).

[Androsynth]

Re: Correct Market Pricing

1-This is inherently a class-based argument. It assumes that someone with more money than you isn't a 'real fan' and that his true fans are the squeezed middle class (or whatever class-bracket you happen to be in).

2-The world doesn't owe you anything. Thinking this is unfair because you can't afford tickets to a stand-up comedy show is the epitome of a First-World problem.

edit: this isn't exactly a reply to sambe's comment. I was taking his 'Correct Market Pricing' comment that was addressed at the rebuttals and adding to it.

[joezydeco]

C'mon, let's have a little reality here.

Anyone that has tried to deal with buying tickets (either in today's system or even back in the old days where you had to stand in line) knows that there are people with large sums of cash willing to pay people to stand in line or bombard ticketmaster.com with requests to land tickets for a show they have no intention of seeing. They resell those tickets immediately for a profit to the people that really wanted to see the show. Go look at StubHub.com 30 minutes after a popular rock concert goes on sale. Did every single one of those sellers have a sick grandmother pop up?

No, the world doesn't owe anyone anything, and this isn't a white whine. It's an example of how people with more time and resources than you can jump ahead of you in line and, as a result either deny you an experience or make you pay more out of pocket for it...all in the name of profit.

[larrys]

"more time and resources than you can jump ahead of you in line and, as a result either deny you an experience or make you pay more out of pocket for it."

Isn't that the way the world works? We aren't talking about access to food, education, or healthcare here. We're talking about entertainment. Is there a particular reason why someone with more time or money shouldn't have an edge and be able to spend their money to do something someone with less money can't do?

If you fly enough you also can get upgraded to first class cabin. Is there something not fair about that as well?

[alxp]

Performers now know that they lose good will when a fan has to pay a scalper to see them. Louis C.K. is earning tons of good will by doing this, and the only person who loses out is the scalper. Wealthier fans have always been able to work the system to get extra tickets, back stage access, etc.

[larrys]

"Louis C.K. is earning tons of good will by doing this"

People want to see Louis because he is funny. The minute he stops being funny all that good will won't mean a thing.

[nooneelse]

How is your second point at all relevant? No one is talking about being owed anything. This situation isn't the consumers pushing against scalpers, it is the performer/artist himself.

You seem to be against Louis C.K. having the freedom to sell his product how and at the price he chooses (for whatever reasons he thinks are of merit). Why?

[sambe]

An odd comment - I didn't say either of these things.

However, other people are saying them and I'm with you - both are fallacies. Particularly on the first, I'd suggest to "real fans" that they consider whether they prefer paying more than face value or not going at all (just in terms of their utility, not as a point of principle). If the latter, then consider the option of refusing the higher price - same result, you don't go! There are no easy solutions.

The perceived issue - I guess - is when a very high percentage of tickets become resold and you don't agree with this method. I'd say your very small chance of getting a face value ticket is still representative of a world without scalpers as they are, as always, acting as a proxy for real demand, which would otherwise be competing with you for face value tickets directly.

[pessimizer]

It is absolutely a class-based argument, and not the fault of scalping, but the class-based argument is a reasonable argument. To the extent that an uneven wealth distribution is based on insider networks, regulatory capture, and rent-seeking, nominal demand is pushed higher than actual utility.

[vacri]

Class-based argument? Your prejudice is showing. The 'true fan' part is about following the goings-on of the performer and being aware that there's a show coming up, and trying to get tickets ASAP instead of two days before the event. Please stop trying to make absolutely everything about money.

[Androsynth]

But if the customers are willing to pay the scalpers price, that means the demand exists.

You say 'flip them for profit' as if thats a bad thing, but as long as people buy those tickets, its just smoothing out the market.

[drivingmenuts]

This is the artist himself saying that he'd rather have true fans in the seats at a reasonable price, rather than have the tickets snapped up by the asshole with the biggest wallet (not sorry for editorializing, that's the politest version of my view of scalpers).

The add-on effect he's looking for is fan retention over time. If 500 people bought from a scalper at some much higher price, there's a small chance that they will become disgruntled and stop being fans. In the long term, he could lose that business.

But if he himself levels out the market, the fans have less to lose. Sure, the artist takes a hit, but that's on him. He can always do something different next time if he's dissatisfied with his revenue.

Remember that this is a guy who made so much money the last time, that he was somewhat nervous. I don't think he's thinking about it the same way you are.

As for "not doing anyone any favors": way I see it, he's doing his fans a favor by keeping the ticket prices affordable.

[Androsynth]

So true fans are poor? What does having a fatter wallet have to do with your taste in comedy?

Also, fans don't work the way you think they do. If I like Louis CK, I like Louis CK. If he chooses to charge $500 for a ticket, I will just watch him on TV. It won't cause me to resent him.

In a perfect market, if enough people feel the same way, the price will drop down into the range that I am comfortable paying. If, on the other hand, he has so many fans that some are willing to pay exorbitant amounts to see him live, I will be forced to watch him on TV.

If he wants to give everyone (rich and poor) the chance to experience his set live, he needs to increase supply by touring more.

[masklinn]

> So true fans are poor?

No? True fans are alone, and true fans are not necessarily the earliest at the gate. If scalpers can grab half the tickets before the show's sold out by buying in bulk, they're going to make a lot of money. Because now they control the product.

> he needs to increase supply by touring more.

He's booked 67 dates, he's only one guy, touring more? He'll need to put his million of sales in cloning if he wants to do that.

But he's at least found a way to keep control on prices and scalping and give everybody equal opportunity.

[joezydeco]

I do say it as a bad thing. In my example, the 1000 fans and the artist would have been perfectly happy with the arrangement. Of course this is never the case.

So the scalpers are profiting from the mismatch in supply and demand and making the show less accessible to the fans. From a scalper POV, that's capitalism. God bless America. From the fans's POV, it just sucks.

And I could swap Louis CK for oil, and scalpers for Goldman Sachs, you know. Same thing IMO.

[masklinn]

> From the fans's POV

And the artist's POV as well, his fans are now poorer and there's no value into it: they don't enjoy it more, they don't get more merch, they don't keep their money to see the next show, they don't get to buy a nice dinner for their SO, etc...

[joezydeco]

That's an interesting angle. Internet piracy of content was supposed to be okay because the artist should be able to profit from concerts and related merchandise. But it seems that isn't entirely possible either.

[vacri]

How is that 'smoothing' the market? CK Louis seems to have smoothed it flat with $45 for all tickets.

If the scalpers didn't exist, the eventual ticket-holders would still be able to purchase from the original vendor. It's not like scalpers make tickets magically appear.

[Resident_Geek]

> If the scalpers didn't exist, the eventual ticket-holders would still be able to purchase from the original vendor.

A lot of them wouldn't, though. If the scalpers sell the tickets for, say, $500, then the people willing to pay $500 get tickets pretty reliably. If the scalpers didn't exist, those people would have to take a roll of the dice along with the many, many more people who are willing to pay $45. A lot of them wouldn't be able to see the show.

[vacri]

I didn't mean the same people. The same number of people would see the show, and people generally believe in a first-come-first-served moral system - spend a night in an busy ER department and see how the general public like the idea of 'triage'.

Really, my point is more that those tickets were going to sell anyway, and all the scalpers are doing is reducing the potential audience for those tickets. I don't see how this specific market is 'smoothed' by this practise.

[potch]

If the only factor in your market's efficiency is price charged, then this is true. The real market has other factors like satisfaction/willingness to repeat a transaction (for both sides of the party), opportunities for disruption of your market (exacerbated by said dissatisfaction), and (gasp!) goodwill of parties in a transaction. If you're optimizing just the ledger numbers in your industry, you might make a buck, but you're setting yourself up for hatred and being toppled by a newcomer who customers actually like.

[Androsynth]

Higher prices dont necessarily breed hate in your customers. As long as people see that they are getting what they are paying for, they come out happy. It's the situations where they feel like they are getting screwed, or have too many restrictions, etc. Those generally come about because the market is not efficient, eg ticketmaster.

[AndrewDucker]

Market efficiency is not necessarily a person's aim.

[Androsynth]

Leaving money on the table does no one any favors. If people are willing to pay $150 for tickets and hes charging $50 (or whatever it is), he's only doing himself a disservice.

If people are willing to pay that much and he delivers a show that is up to his normal standard, they won't hate him for charging them that much; quite the opposite actually. It's only the price gauging and poor service of monopolies that people tend to hate (and for good reason).

Now, if you are saying 'what about the people who cant afford $150 for tickets?'. If it's not a charity show, the world definitely does not owe you tickets to a stand-up comedy show. On the other hand, charity shows are fine, but he should call it like it is if thats the case. $50 for tickets means the rich will pay less than theyre willing to pay and the poor won't get in anyways. No one wins in that situation.

[fusiongyro]

> he's only doing himself a disservice.

How precisely is the scalper, by increasing costs and adding _no value_ doing us a service?

[Androsynth]

Just because he is doing himself a disservice doesn't mean the scalpers are doing us a service.

[fusiongyro]

As worded it is implied that the scalper is doing _somebody_ a service, and I disagree with that.

[vacri]

The value that scalpers add is that you can get tickets at a later time. That's about the only value I can see that they provide, and whether that benefit is moral or not I guess depends on whether you believe in first-come-first-served for that item.

[sambe]

They are doing a service to anyone who buys scalped tickets, who is happy to pay extra rather than not go. Competition at this price is lower. I know many people who have happily paid well over face value on several occasions. Of course everyone would rather pay an artificially low price. Wanting a better deal isn't the same as the premium being extortion.

You may not like scalping but there's no point being blinkered about it.

[fusiongyro]

Except they're only paying extra because, ta-da!, the tickets were scalped. The competition is higher at the lower price because, ta-da!, the tickets were scalped.

The arguments for scalping only work if the effects of the scalping are ignored. Eliminating scalpers benefits everyone.

[jbooth]

By increasing liquidity!!

[balloot]

What Louis CK is essentially saying is that given a large amount of money already in the bank, it is more valuable for him to have affordable tickets than it is for him to maximize revenue. That is a decision that is perfectly rational. Not everyone gets their full utility from making the absolute maximum amount of money possible.

Also, a side effect of this is that below-market value tickets create a shortage, which in turn makes it valuable to be the first to learn about new tickets. This has to be driving signups to his mailing list and twitter feed.

[vacri]

Leaving money on the table does no one any favors.

God bless the US health system!

$50 for tickets means the rich will pay less than theyre willing to pay and the poor won't get in anyways. No one wins in that situation.

Economists are crazy. A full house is a full house. The people who win are the people who attended. How you can possibly say 'no-one wins' from a full house of successful comedy on the cheap is beyond me. Yeah, bummer, the cheap tickets to a very entertaining night left us all feeling crappy...

[dagw]

First of all, just because there are a number of people willing to pay $150, that doesn't necessarily mean there are enough of them to sell out every show. So now he either has to lower prices as the dates approach or play to half full venues. Both of which are obviously sub-optimal.

Secondly you're ignoring the broader message sent by charging $150. Even if he can find enough people willing to pay that to fill a small venue, it risks sending the wrong message and pissing off people who might otherwise have bought his DVDs, watched his TV shows or gone to other shows. So now instead of being seen as broadly popular "man of the people" who "sticks up for his fans" with wide appeal, he's seen as a stuck up rich fucker entertaining other stuck-up rich fuckers. This will have obviously negative effects on his TV ratings, where I suspect is where he makes most of his money.

[jeffool]

>Leaving money on the table does no one any favors.

Except fans. Who can now buy his DVDs or other swag. (Or afford both his show, and rent.)

If your goal is to get as much money as quickly as possible, there's another word for that. Short-sightedness.

[pyoung]

The SF Giants use a variable ticket pricing scheme that seems to be pretty successful. It adjusts the price of tickets based on projected demand. This probably does a pretty good job at eating into scalpers profits (although not entirely). Of course baseball ticket demand is a lot more predictable due to the fact that their are ~80 home games a season.

It would be interesting to see if there was any way to implement a similar system for concerts and shows.

[joezydeco]

Trent Reznor had some thoughts on that:

"My guess as to what will eventually happen if / when Live Nation and TicketMaster merges is that they'll move to an auction or market-based pricing scheme - which will simply mean it will cost a lot more to get a good seat for a hot show. They will simply BECOME the scalper, eliminating them from the mix."

http://forum.nin.com/bb/read.php?59,548515

[res0nat0r]

I think is partially already in place? Ticketmaster now allows users to resell their tickets via their website: http://www.ticketmaster.com/ticketexchange/

[rmc]

Also, is scalping a bad thing? It seems to me that they are making the market more efficient.

It might make the market more effecient. But it annoys your customers.

[warfangle]

Problem with scalpers is they reduce the supply of the tickets endemically, thus driving the market price up. If the scalpers aren't involved at all, the market price is lower than the scalped price.

[mhartl]

The scalpers are the market-makers. If there were an official market, the scalpers would be out of business overnight.

[masklinn]

> The scalpers are the market-makers.

So what? They're not adding any value in the equation, they're just parasitically extracting wealth from all other entities. What's the point of that from a social perspective?

[nooneelse]

Indeed. And what is the incentive for an artist to allow his/her fans to have their wealth extracted by a third party? None. It only makes the fans less able to buy things from the artist in the future.

Louis C.K. is cultivating/nurturing his fans like a gardener cultivates/nurtures a plant. That clearly includes not letting insects eat the leaves off of a plant one intends to get an ongoing crop from.

[ionforce]

The incentive is to allow a specific sect of well-to-do fans access to his show that they didn't get otherwise.

Whether or not you agree with that incentive is entirely separate.

[nooneelse]

I still don't see how that is an incentive to allow a third party to extract anything from the transaction. He could run an auction for tickets himself to satisfy that desire (if he had it).

[gergles]

You're not going to be able to sell this on HN. The HFT apologists will come invade this thread and go on for paragraphs on end about how market makers provide a valuable service that would otherwise not be provided.

Without scalpers (HFT) apparently absolutely no commerce in the relevant market would ever occur.

[Uchikoma]

Not if people who have no plan to attend buy significant amounts of tickets to corner the market.