Contributors
Eric Baker: Anti-ticket-reselling law hurts R.I. fans
02:45 PM EST on Monday, December 17, 2007
LONDON
TICKETS TO “tween” pop star Hannah Montana’s Dec. 20 concert at the Dunkin’ Donuts Center went on sale last month for $26 apiece.
As a down-to-earth girl who both on- and off-screen plays the average Miley Cyrus by day and nationally famous pop star Montana by night, Cyrus has engendered the kind of affection that her Disney-employed managers dream of — hundreds of thousands of pre-teen girls and their parents who love her uplifting message.
So it makes sense that the tickets should only be $26, right?
You might think so. But chances are, if you and your Hannah-loving 6- to-14-year old daughter are going, you didn’t pay that much for your tickets. You paid that much — and more. And nobody likes to pay more than the advertised price for anything.
But as tickets make their way onto the Internet and reluctant parents shell out as much as $2,000 a seat, the uproar is causing otherwise well-intentioned people to try to turn back the clock on seven years of fan-focused progress. The numbers are drowning what has been a long and steady climb toward giving more power to the fans and taking power away from the monopolistic bastions of the entertainment industry Old Guard — places like Ticketmaster and the big record labels.
While in the past year New York, Connecticut, Pennsylvania, Minnesota and Missouri all repealed outdated laws that prohibited ticket reselling, Rhode Island is one of only six states that still have an anti-scalping law on the books.
The naysayers will say “Good for them!” But let me tell you why Rhode Island’s well-intentioned law hurts you as a consumer.
High prices are not the creation of scalpers. High prices are the creation of the market for tickets to see popular events. The problem comes down to simple economics: There are not enough seats at most concerts, games, or events for everyone who would like to attend. When the demand for seats exceeds the available supply, the price of those seats increases. (In the case of Hannah Montana, Disney has exacerbated the situation — making only 13,000 seats available for some shows in venues that can seat thousands more).
This, predictably, causes the mobs to run out in the streets with pitchforks yelling “Down with StubHub! Down with viagogo!”
But let me take you back to the old days, when you waited in line for tickets (remember lines?), and if you didn’t get them, a lot of times, you accepted it. You went home, and waited for next time.
The truth is that high prices for big-ticket events have always been here — whether they were printed on the ticket or not. Market forces never go away. But seeking secondary tickets in the past carried a significant amount of risk. The only alternative — if you could find it — was to deal with scalpers. And scalpers were shady characters. You might get stuck with fake tickets. Or you might make a trip to the venue (sometimes hundreds of miles, depending on the event) but not be able to get tickets at all. The profiteering that occurred from this kind of scalping was dangerous and the old laws were aimed partly at preventing that.
So seven years ago, I said there has to be a better way, and formed StubHub.com with my co-founder. The premise was simple: Not all people who have tickets can attend an event. Let’s provide a way for others to get those tickets without having to deal with shifty scalpers in back alleys, or the risk of getting fake tickets.
Today the Internet has enabled an open, transparent and secure marketplace for tickets, where consumers have huge choice — a choice to buy what you want, when you want it. Internet sites like StubHub and viagogo allow a person to see everything that’s available. And as a devoted fan, it’s very hard to accept defeat when a perfectly valid seat is staring you straight in the face from your computer screen.
Today, around the world, more people are able to attend their favorite events thanks to secondary ticketing. And the law of supply and demand works in both directions — not all tickets on the secondary market sell above face value. A quick look around viagogo.com reveals a large number of tickets to events trading below face value, sometimes at bargain prices. With secondary ticketing, consumers win.
The old laws kept the power in the hands of the teams and the promoters, who tried to tell us that what they were selling was a license to see their event, and not actually a ticket that you owned because you rightfully paid for it. But that doesn’t make sense. Can you imagine Ford selling you a license to drive one of its cars, and then taking the car away from you when they decided they didn’t like the way you were driving it?
Today’s law in Rhode Island is ineffective. I encourage you to try to remember the last time you walked up to the Dunkin’ Donuts Center and didn’t encounter at least one person asking if you needed tickets. Rhode Island’s anti-scalping law hurts consumers, discourages openness, and promotes the unsafe practice of street dealing.
It’s time to urge your legislators and Governor Carcieri to repeal this unfair law. The Internet has opened up a world of possibilities for fans, and there’s no reason Rhode Island should be left behind.
Eric Baker is co-founder of StubHub and founder and chief executive of viagogo.com.
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