Dueling concert ticket strategies: Taylor Swift and Ticketmaster jockey over how to sell out shows.

Depending on you ask, Taylor Swift’s upcoming 51-date Reputation tour is either going to be a huge success or in big trouble. We do know that none of the shows have sold out. Some stops still have thousands of tickets available. Yet there are reports that $240 million worth of ticket sold and a projected total box office gross somewhere nearly $300 million. What’s going on?

Tay-Tay’s people have a deal with Ticketmaster to run her ticket site, Taylor Swift Tix. The two entities ran into a dispute when Swift’s side didn’t want Ticketmaster to show the prices of tickets being resold by scalpers on TicketsNow, the TM-owned reseller, displayed right next to primary tickets when they went on sale.

Sidebar: Ticketmaster bought TicketsNow in 2008 and goes head-on with other resellers like StubHub (owned by eBay), SeatGeek, TicketNetwork, and others. The strategy made sense from TM’s point of view. As CEO Michael Rapino says in this Billboard story, “Having buyers visit Ticketmaster’s website, only to find a show is sold out with no ticketing inventory available, is akin to “putting up a Closed sign and telling them to go to StubHub.” And yes, Ticketmaster has a greater margin on tickets sold through TicketsNow than they do on primary ticket sales. Remember, the ONLY money Ticketmaster makes on primary ticket sales is what they charge as a service fee. When fans resell their tickets through TicketsNow, TM takes a bigger chunk in terms of fees, party because the tickets are most often priced above face value.

Back to the Swift situation. Ticketmaster pushed back on the objections, saying that showing how much Tay-Tay tickets cost on the secondary market would drive primary (i.e. non-scalped) tickets. The goal was to drive all shows to sellouts. That would give Taylor’s people bragging rights–and it would drive up prices on the secondary market, which would ultimately be good for Ticketmaster and TicketsNow.

Ticketmaster prevailed in this argument until April 27 when TM stopped displaying those resale tickets for the first nine stops on the tour, effectively admitting that the strategy did not work.  Since they did that, sales of primary tickets have risen significantly.

In other words, showing the face value of tickets next to the price of scalped tickets didn’t drive sales. Removing the higher-priced tickets from the website actually increased sales of tickets priced at face value.

If you had to go back and read the above paragraphs several times, I completely understand. I don’t get it, either.

The only thing I can figure is that fans saw the value in the scalped tickets because they were better seats than what was still available through primary channels. They either coughed up the cash or bailed entirely, pissed that they’d been priced out of the market. But once the option of buying those scalped seats was taken away, fans apparently became incentivized to buy whatever was left.

What can we learn from this? Not sure yet. Does this show that Swift tickets were priced too high from the outset? Or that fans will pay market value for better tickets on secondary sites? What does “sold out” even mean these days? Anything?

I’ll be interviewing Jared Smith of Ticketmaster for a keynote presentation at Canadian Music Week (Thursday, May 10, 2 pm). I have a feeling this will come up.

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