27
g. The Market Structure Is Atypical.
Another nal point to keep in mind concerning this industry: the typical market structure is
skewed. For one, ckets are oen sold on the primary market for a face value that is below
market price. Although this may sound surprising, our invesgaon suggests it is common
and reects various factors. For one thing, maers of goodwill and reputaon in the sale of
ckets are important to certain performers. That is clearest, for example, for events where
the promoter has non-commercial goals – like Pope Francis, who distributed free ckets for his
public appearances – or at events like the New York City Center’s annual Fall for Dance Fesval,
which includes world-renowned performers but sells ckets for just $15, “in keeping with the
Fesval’s commitment to make dance accessible to everyone.”
32
Even more explicitly commercial acts somemes price their ckets below what they might charge
to make them accessible to younger fans or those of ordinary incomes. The band Fugazi, acve
over the 1990s and early 2000s, for example, long kept its cket prices at $5.
33
Pearl Jam, among
the most popular bands of the 1990s, set its cket prices at or below $20 to make it possible
for young fans to aend its concerts. As the band said in prepared tesmony before Congress,
“Although, given our popularity, we could undoubtedly connue to sell out our concerts with
cket prices at a premium level, we have made a conscious decision that we do not want to put
the price of our concerts out of the reach of many of our fans.”
34
Somemes a mixture of economic and non-economic moves is evident. A sports team, like the
Brooklyn Nets or New York Mets, might not want to be accused of “gouging” fans, and hoping
to build a loyal fan base, and so might price its ckets accordingly. Some sense of this came in
2009 when the New York Yankees experimented with much higher cket prices and were subject
to widespread cricism and unaering media coverage. The New York Post described the
Yankees’ new plan as “greed-driven-and-delivered” and the prices as “insanely and obscenely
high.”
35
Eventually, in the face of both cricism and poor sales, the Yankees lowered their prices
dramacally. Somemes even a prot-maximizing performer might set prices lower than market
value to guarantee a sellout and a full house for markeng purposes. Some of the promoters we
spoke with argued that a public sense of high demand and cket scarcity is necessary to create
strong demand for ckets. Hence, seng cket prices at a low level, so as to drive sales, may be
necessary to create the sense of a “sellout tour” that stokes demand to aend it.
Cheaper ckets could be very benecial to consumers, as long as they reap the benets. The
problem with this industry is that a middleman essenally takes the benets intended for the
consumer. In other words, the cket broker or reseller, able to buy up ckets before the public
gets a chance, prots from the lower priced cket – charging the consumer a much higher price
and pockeng the dierence. To further complicate the industry, the enes most able to stop
this pracce are either powerless or not economically incenvized to stop the pracce. Arsts
may want to avoid this from happening but have to rely on the venues to sell ckets. Venues
have an interest in selling out ckets and have lile incenve to put protecons in place. Ticket
32. Press Release, “New York City Center Announces 2015 Fall for Dance Festival” (July 29, 2015),
available at
https://www.nyci-
tycenter.org/content/misc/PressRelease-FFD15a.pdf.
33. John Pareles, “Review/Rock; Melodies Amid Rant, Thoughts Amid Rage,” N.Y. Times (Mar. 7, 1991),
available at
http://www.
nytimes.com/1991/03/07/arts/review-rock-melodies-amid-rant-thoughts-amid-rage.html.
34. Hearing of U.S. House Comm. on Gov’t Ops., Subcomm. on Info., Justice, Transp., & Ag., 103d Cong. (June 30, 1994).
35. Phil Mushnick, “Pricing fans out of Stadium no good for Yankees or MLB,” N.Y. Post (Apr. 27, 2014),
available at
http://nypost.
com/2014/04/27/pricing-fans-out-of-stadium-no-good-for-yankees-or-mlb.