Dear Take That fans, these are called "supply and demand curves"

Surprise once more echoed round the pop world as tickets for Take That that were put on sale at dramatically below market value sold out almost instantly, delayed only by the technical limitations of the websites and phone lines put in place to transact the things. Given how greatly the demand for tickets exceeded the supply at this artifically low price, and given the element of luck involved in getting through either online or by phone, by underpricing their tickets Take That (or more likely their clearly inspired commercial team) have simply created a lottery in which a relatively small number of people, selected at random from amongst those who wanted tickets for one reason or another, have acquired those tickets for a fraction of their actual value.

The sell-out was almost immediately followed by outrage from fans that people who had managed to acquire the manifestly underpriced tickets were now realising their actual value by putting them on eBay. The same outrage has been expressed at various times by other concert organisers and performers who for some reason imagine that they should be able to set both the supply and price of their goods without any reference to demand. Last year Ricky Gervais complained

"Tickets for my Edinburgh show are changing hands for £200. Please don't buy them. The people selling them are scum...I have tried to stop this happening but I can’t. I’ve tried holding tickets back for sale on the night. I've tried putting gigs on sale at the last minute so people don't have time to put them on eBay, but nothing works."

The problem here is not profiteering, but the reality that if you leave bundles of twenty pound notes lying around on the floor people will pick them up. And actually, two things would work here. The first is to increase the supply so that demand for each individual show fell to whatever price per ticket the perfomer insists is the right one. If Take That, Ricky Gervais et al insist that fans must be able to see them for £2o they can simply keep playing until they have put on the number of shows that brings the price down to that level. Rather more ingeniously, one commentor pointed out last time I discussed this issue that they could also manipulate demand by lowering the quality of their output so that demand, at the level of supply they happen to have chosen, matched the supply of performances at the price at which they happen to want to sell the tickets. Take That would not have sold out, even at £20 per ticket for a relatively small number of gigs, if they had made a credible commitment to suck. Perfomers who (bizarrely) insist on choosing the level of both price and supply for their performances might take note - there's really very little you can do to manipulate the supply and demand curves, but reducing the quality of the product is one solution that falls within your gift.

Comments

[James MacAonghus]

Quite. I don't understand why some shows don't do a better job of pricing, unless they are worried about the bad publicity. When an opera at the ROH sells out months ahead of schedule, doesn't someone wonder if they could have raised the prices? There must be algorithms that they can borrow from the airline industry. Maybe they could price seats differently according to when you book, too, like airlines do.

Same thing happens if you believe the publicity for some off-plan apartment sales. "X times oversubscribed" - if I was the developer, I'd ask the agents why they lost me money there.

[Gareth]

If you want to sell your tickets to fans, issue your fanclub members with photo IDs, and have them present their card as a pass. Have some sort of barcode or QR code on the pass, associated with their account, to which you virtually assign a ticket. Don't let anyone in whose face does not match their ticket. That way, you eliminate resale, and limit sales to people with the forethought to join your fanclub. And presumably that way you would have the ability to market fan merch at them furiously, because they'd be on your big list of people willing to part with moderate sums of money for things associated with your brand.

I mean really, how hard is that? Most moderately succesful small businesses could afford the tech to issue the cards, and the venues all have QR code scanners for print-online tickets.

[Seamus McCauley]

James - I think there's an issue of idiotic public policy there. UK housing developments must include a proportion of "social", ie underpriced, housing, so the oversubscription element could be a function of that, with the market-priced homes attracting a sensible interest.

Gareth - like this idea lots. Suede have done it on occasion, but only as a weird stunt. It doesn't seem to be as common as would make sense, and it would solve the pricing problem they clearly imagine they have.

[Coruskate]

The problem with lettting the tickets find their market value, I assume, is that the artists would rather perform to "real fans", and "real fans" are not necessarily rich people. So what combination of economic incentives (and to whom) is required for an artist to select "only people we like the company of" as his audience?

Perhaps attendees should be required to post some kind of security bond which is forfeited if at the end of the night the performer doesn't feel they've been "a tremendous audience, we love you all". Or if they don't sing loud enough in the singalong.

[seamusmccauley]

Coruskate - I think our loyal reader Gareth has the solution to this one above. He suggests that the appropriate filter would be the band's fan club. I think that ticks all the boxes. The band makes more money, even if joining is a negligible fee; it can be used as the filter for tickets (maybe just for the presale if the band doesn't expect to sell out to just fan club members); and it solves the ID/reselling problem since joining handing over photos and details is less intrusive for someone joining a fanclub than someone merely buying a ticket.