An Argument Against Paperless Tickets.
If Ticketmaster and LiveNation have their way fans will know what a paperless ticket is very soon. A paperless ticket provided by Ticketmaster essentially means when a fan buys the ticket from Ticketmaster they will not receive a ticket for the event, not a traditional paper ticket or electronic one. On the night of the event the consumer will show up to the venue with the credit card used to purchase the ticket and their id, and swipe it for entry to the event. Ticketmaster will give the customer a receipt with the seat information and the patrons will be on their way.
On the surface this technology sounds like a good idea, based on Ticketmaster’s argument that fans will be now be able to buy tickets for the intended face value. They argue that they are protecting you the consumer, but are they?
The event provider (promoter, artist and/or venue) has elected to employ Ticketmaster’s paperless ticketing in an effort to best ensure that fans can purchase tickets at the price they initially set for the event. Paperless tickets have already been used successfully at some of the largest venues throughout the world, by many of the most popular artists. Fans have unanimously enjoyed the added ease and convenience of their experience.
There are many arguments against the paperless technology and a few of the major complaints are below.
Paperless Tickets are Non-Transferable
The biggest issue that people have with paperless tickets is that they are non-transferable. The original purchaser of the tickets has to show up with their credit card and id to the venue. There are many times that concerts go on sale to the general public 6-8 months before the actual event. There are so many issues that could arise in that time-frame including: moving, work-related commitments, credit card gets lost/canceled, etc. The list goes on and on and if Ticketmaster has its way, fans will not be able to sell or give their tickets to anyone else outside of Ticketmaster’s paperless exchange.
The issue here is about control and always has been with Ticketmaster (see merger with LiveNation). They want to control the ticket from the original point of sale all the way up until the time it is used. This is monopolistic in nature and suppresses the free market. The consumer should have ultimate control over their purchase, not Ticketmaster.
Higher Prices in Secondary Markets
Using Ticketmaster’s same argument above, the consumer needs to be aware of how prices on the secondary market will be affected by the Paperless Exchange. The argument is that more tickets will get into the hands of real fans and not ticket brokers, and that benefits the consumer. This is an untrue statement and here is why.
Think back to high school economics classes and remember supply and demand. If there is more supply and less demand in a marketplace, prices will fall. If there is more demand and less supply, prices will rise. An example fictitious scenario for a Taylor Swift concert. The assumptions for both a traditional and paperless tickets are the venue can hold 14,000 people and that 20,000 want to attend the show. Taylor Swift is HOT, after all!
Scenario #1 – Everyone is given the same opportunity to buy tickets at face value and there are no restrictions on transferring the tickets to someone else.
In this scenario tickets are sold out in minutes due to the high demand. Thousands of people that wanted to attend the event are now ticketless because of Ticketmaster holdbacks, high demand, and ticket brokers buying up about 5% of the venue. Fans that “have to go to the event” immediately scramble to ticket broker websites like StubHub.com and are able to purchase tickets for a price that has been set by the market. Sometimes this is over face value, but there are also times when tickets are actually less than face value because so many brokers speculated incorrectly. Consumers are able to choose the exact section and row of where they want to sit and have a choice of over 1000 tickets to choose from at different price levels. Prices could be higher than face value after the initial public sale, but as the show nears prices may lower because there could still a lot of supply on the market. A savvy consumer tracks the prices over time to make a decision on when to buy tickets from the secondary market. Consumers that “have to go to the event” can then make a choice on whether or not they are willing to pay the market price for the tickets or not. Remember, just because there are 1000 tickets on StubHub doesn’t mean that the ticketless fan would have gotten tickets. The demand exceeds the number of tickets available for this particular event. This is where most people get hung up.
Winner of Scenario #1 – Consumer because they have choices on how to purchase their tickets.
Scenario #2 - Ticketmaster deems the concert a Paperless Only event. All tickets are non-transferable.
In this scenario only local tickets brokers who plan on walking customer into the event are able to purchase tickets. The event still sells out immediately because the demand far exceeds the supply. However, this time when the customer that “has to go to the event” goes looking for tickets in the secondary market, they are met with prices that are much higher because the supply is so low. Some people will be willing to pay these inflated prices, but many people will be forced to miss the concert. Prices will always be higher in this scenario given our assumptions.
Winner of Scenario #2 – Local Ticket Brokers, TicketMaster
Collectors are Shut Out
This issue may not effect the masses, but many people like to collect concert ticket stubs. Paperless tickets take that experience away from the consumer. It’s not the same thing to own a pile of paperless ticket receipts. This issue may not be a game-changer, but the collectors are upset.
Choices are Good For Everyone
Some people would prefer to have paperless tickets, but it’s not a cure all. Problems arise when Ticketmaster does not give the consumer the choices that theyshould be entitled to when purchasing a ticket from them. If Ticketmaster was really looking out for the best interest of consumers they would come up with innovative ways to heighten the concert experience rather than keeping their boots on the heads of fans.