Ticketmaster, Live Nation Say Concert Tickets Are Actually Underpriced
While we've seen the price of concert tickets go up in recent years, is it possible that buyers are still getting them at an underpriced value? That's the sentiment recently echoed by Live Nation and Ticketmaster, according to Market Watch.
According to Market Watch's report, Live Nation CEO Michael Rapino recently told investors that concert tickets are "an incredible bargain" in comparison to other entertainment options, adding that increasing prices provides a “huge opportunity for our bottom line.” Ticketmaster president Joe Berchtold also backed that assessment during an interview with Market Watch.
In a Bloomberg report citing stats from Pollstar, the average ticket price for top-100 world-wide tours rose to $96.17 in 2019, and there has been a 23 percent increase in ticket prices over the last five years. The report states that since 1996, the average ticket price in North America has jumped over 250 percent.
Georgetown University finance professor Jim Angel breaks down the idea that tickets are underpriced, stating, “It’s sort of like how investment bankers underprice initial public offerings. They want to make sure that the investors have a good experience and that there’s no unsold stock left at the end of the offering.” But, as Angel points out, the lower price has allowed the scalper market to thrive, with fans being willing to pay resell price while the acts lose out on potential income.
Berchtold agrees with that assessment, stating, “[Acts are] now [being] confronted with the reality that it’s very often not the fans benefiting from that lower price. We think artists have the rights to the full economics of what they do.”
As we've started to see, acts are beginning to remedy the rampant scalping going on, with some bands trying to limit resell options.
Meanwhile, there have been government inquiries of late into potential monopolistic practices with the ticketing giants. According to Market Watch, six ticketing companies are currently under investigation by the House of Representatives over their practices. Both Live Nation and StubHub are said to have welcomed the investigation, feeling that it will help to set "consistent rules" for the ticketing industry.
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