Michael Jackson’s death was mourned by millions of people all around the world. Yet as some grieved over the King of Pop’s sudden passing, more pragmatic fans worried about getting their money back.

Ironically billed as the last concerts of his career, Jackson sold out fifty shows at London’s O2 Arena. The first was scheduled for July 13th.

The concert series, dubbed “This Is It,” sold more than 750,000 tickets. Priced between $84 and $102, total sales reached nearly $90 million.

On June 26th, the day after Jackson’s passing, the concert promoters, AEG Live, made vague promises of a refund but failed to mention any specifics. Three days later, AEG announced that ticketholders would receive a full refund, including all service chargers.

Fans looking to get their money back can find instructions on michaeljacksonlive.com. Both viagogo and Ticketmaster will be processing the refunds. They are respectively the premium ticket provide and the primary ticket provider.

Refunding began on July 1st.

In an effort to recover their losses, AEG is offering fans the opportunity to forgo a refund and instead receive an actual event ticket.

These tickets, which can be viewed on the aforementioned website, were designed with Jackson’s help and feature his holographic image. The ticket offer expires August 14th.

The secondary ticket market had refund polices in place within 24 hours of the King of Pop’s death. Seatwave, TicketNetwork, Stubhub and WorldTicketShop have all posted refund procedures on their websites.

Internet auction site eBay also got into the act. The weekend following Jackson’s death, eBay extended its Buyer Protection to include Jackson concert tickets purchased on their website.

According to eBay spokeswoman Jenny Thomas, even consumers who paid several times over face value will more than likely get all their money back.

On Monday, June 29th, the National Association of Ticket Brokers called on its members to issue full refunds and/or credits for all Jackson concerts.

“In fulfilling its role as an association formed by, and consisting of, dedicated ticket brokers to promote consumer protection and advocacy, the NATB calls on Ticketmaster and all other primary sellers of these event tickets to… [cease] their practice of retaining fees on tickets sold for cancelled events so that all ticket buyers get full refunds.”

Unless provisions have been made by the promoter, artists or venue, Ticketmaster is not obligated to issue refunds for cancelled events.

While fans escape the financial burden of the cancellations, AEG does not. The Los Angeles based company already paid out millions to Jackson, they funded all concert preparations and the massive 02 Arena, which they operate, now has fifty empty dates.

Promoters are usually required to have insurance to cover costs in case of a cancellation and AEG is no exception. According to sources, they had taken out several insurance policies with several different companies.

Each of one these policies includes extremely specific payouts for every type of cancellation imaginable. This not only includes the death of the artist, but the manner in which the artist died.

For instance, if Jackson died of natural causes, AEG could receive a large settlement. If Jackson died of a drug overdose, the insurance companies’ payout could be greatly reduced.

This means the Los Angeles County coroner’s report on the cause of Jackson’s death is going to be worth millions. The report is due out in about six weeks.

Regardless of how the LA coroner rules, the battle over who is going to pay for the cancelled Jackson concerts will eventually be decided by years and years of litigation.

According to an article on Idolator.com, Bruce Springsteen may have to apologize to Ticketmaster regarding a very public flub-up over concert ticket sales. The controversy centered on the fact that the best seats in the house for an East Rutherford, NJ Springsteen concert  were selling on ticket broker Web sites before becoming available to the general public.

Springsteen posted a blog about the incident at the time, demanding that Ticketmaster apologize to fans for the ticketing fiasco. However, according to Idolator, in a recent investigation, the Newark Star-Ledger looked into the incident further and found that the tickets in question had been dispensed to family, friends and associates by the promoters of the show and the Boss’ record company and the star himself. The Star-Ledger found that there were 1,126 seats in the sections sitting closest to the stage. However, just over 100 of them ever went on sale to the public.

The article states that in total, a staggering 2,262 seats were allotted for the band, the record company, agent, and the New Jersey Sports and Exposition Authority; this is about 12 percent of the total tickets available for the concert.

And according to some legislators, this violates state law. “They are allowed to hold back 5 percent for family, fan clubs, friends, sponsors, for the band, for the producer, for everyone involved,” said Assemblyman Peter Biondi (R-Somerset), who questioned Attorney General Anne Milgram on the issue when she appeared before lawmakers earlier this month.

For the May 21 Springsteen concert, the promoter retained a little over 800 tickets for the media and its own purposes; the record company, agent, the band and Springsteen got another 1,450. When the dust settled on this particular concert, roughly 60% of the ten best sections in the arena were held from public availability. What further contributed to the outrage was the fact that none of the seats in the upper level of the arena – considered to be the worst in the house — were retained for the artist and the promoter.

To try and smooth things over, Springsteen’s manager, Jon Landau told the Wall Street Journal: “It is true that we hold a significant number of tickets for our friends and family, as does virtually every artist during concert appearances,” he said. “The location of those tickets are blended into the seating chart, so that there’s always a mix between the ability of fans to buy tickets and tickets being held for the stated purpose. No tickets held by the artist in our case are ever authorized for resale. And to the best of our knowledge, this practice is common to all artists who have to deal with close friends, business associates who work year-round for them, their parents, their wives, their nieces, and so forth.”

Fans and industry insiders say that while this may be the case, more transparency is needed in the process to ensure that public is educated about common music industry practices, such as this one, and to ensure that ticket companies, like Ticketmaster, don’t take the fall in situations like this again.

In a recently published article on Bigmoney.com, author Mark Gimein adroitly examines the economic factors behind ticket scalping.

In “Is Ticket Scalping All That Bad,” Gimein analyzes the complex issue without the sentimentality of the ardent fan. The same fan who assumes that because they own every album and operate a fan-site they’re entitled to the best seats in the venue. He tackles the issue without the duplicity of the artist. The same artist who wants to publicly appear as one of the people while secretly taking as much of their money as possible.

Instead, Gimein intelligently and cogently explains ticket scalping while drawing from his years writing for such publications as Fortune, New York Magazine, Slate.com, and the New York Times. Whether you’re for or against ticket scalping his piece is both thoughtful and thought provoking.

Ultimately though, Gimein has no use for ticket scalpers. He believes the ticket industry can fill venues, maintain fan satisfaction, and allow the market to determine ticket prices without their services.

To begin his argument, Gimein uses an antidote from the Beijing Olympics. A sports writer wants to buy a ticket to a sold out boxing match from a scalper but he doesn’t want to pay more than face value price. The scalper responds to the writer’s request by saying, “I’d rather tear the tickets up.”

According to Gimein, this desire to destroy tickets rather than sell them at face value price is a problem because it keeps venues empty. Concert promoters and theater producers want seats full of eager fans, even if all the tickets have been sold. Packed houses create buzz while empty venues do not.

In addition, scalpers, in order to make a profit, must make tickets scarce or at least create the perception that tickets are scarce. That’s why the Beijing scalper was more than willing to tear up his tickets. However, a dearth of tickets makes fans very unhappy.

Gimein asked readers to imagine a wealthy person desperate to see a Broadway show. All of the show’s 1,000 tickets, each of which sold for $100, have been purchased by a scalper. The wealthy person buys one ticket from the scalper for $150,000. The curtain rises on a show with a sold out theater of one. Outside, the scalper cheerfully pockets a profit of $50,000.

While this is an extreme and simple example it does demonstrate another major problem with the primary ticket market. That problem is the “price at which every seat is filled and the profit-maximizing price are not the same.” In other words, tickets are underpriced.

Underpriced tickets mean someone is willing to pay more. It is these people who put the scalper in business. It is these people who allow the scalper to dictate market prices.

The traditional reason for underpriced tickets is the desire for promoters and producers to fill seats. Gimein also postulates, with help of economist Eric Crampton and Nine Inch Nails’ front man Trent Reznor, that tickets are underpriced due to a conspiracy by venue operators in cahoots with scalpers.

Reznor’s argument is if venues wanted scalping to end they would print the name of the purchaser on the ticket (or use some sort of electronic ticketing). Since they don’t currently do this, they therefore must wish for scalping to continue and therefore have no incentive to correctly value their tickets.

To solve the problems created by scalping, Gimein suggests the industry adopt two measures. First, venues begin using electronic ticketing similar to what Miley Cyrus is using for her latest tour. Reznor goes so far as to suggest this alone will end scalping.

Gimein also recommends that certain tickets be sold at higher than normal prices. Basically, artists should scalp their own tickets. Artists are reluctant to charge hundreds of dollars for premium seats because it casts them in a bad light (music and greed don’t mix).

Still, dynamic ticket pricing is a quality the current over-simplified ticket industry is lacking. For an example of this type of ticket pricing we can once again look at Cyrus’ tour. Premium seats for her concerts are selling for $295.

Gimein believes these two provisions are the best ways to combat ticket scalping. As long as the ticket scalper would rather tear up tickets than sell them, the ticket industry will be unable to keep fans happy, fill seats and allow the market to dictate ticket prices. Only when the scalper is gone will the primary ticket market be transparent and efficient enough for fans.

While Gimein’s article is solid, he fails to address a few issues. It’s illogical to expect a ticket scalper to sell a ticket at or near face value price. The scalper is in business to make money.

When you buy a ticket from a scalper you’re not only gaining entrance into the event but you’re paying the person who actually spent the time to acquire the ticket in the first place.

Blaming the scalper for empty paid seats is like blaming the public for not buying tickets in the first place. Does anyone really feel sorry for concert promoters and theater producers who’ve sold every ticket but have empty seats? After all, they are in business to make money too. If they were in the business of enriching lives and enlightening souls then seats would be free.

While this is not so much Gimein’s fault but Reznor’s, it’s illogical to assume that just because venues don’t print names on tickets they are somehow involved with scalping. There could be several reasons why venues don’t use electronic ticketing. For instance it’s takes a long time to usher fans into an event.

Finally, Gimein seems to put too much of a premium on fan happiness or rather indicates a large majority of fans are currently extremely unhappy with ticket scalpers. Fans are still flocking to concerts by the thousands and Broadway is coming off its best year ever. Furthermore, all this success is coming during a down economy.

The fan’s happiness will only become a factor if 1,000 people show up to a U2 concert at Giants Stadium or 500 people attend a Brittney Spears show at Staples Center. If that ever happens, the industry, including scalpers, will quickly make the proper adjustments and correct itself.

Scalpers only seem to be a problem to the unhappy few who believe the breadth of one’s passion should be the sole determinate for ticket accessibility. Unfortunately for them, enthusiasm isn’t currency.

The secondary ticket market is one area of the entertainment industry that has continued to grow and thrive, even as it continues to evolve to meet the needs of the consumer. As a result, a new ticket outlet is hoping to take that evolution in a new direction with the launch of Tickets-for-Charity. According to Pollstar, this new organization sells premium tickets to some of today’s hottest shows at face value, adding an extra donation for non-profits participating in this new venture. This gives a new sense of purpose to the secondary ticket market, providing charities of all types an extra opportunity to benefit from the massive amounts of revenue being generated in the entertainment industry.

Tickets-for-Charity CEO Jord Poster told Pollstar:  “The beauty of our platform is that it raises millions of dollars for charity without asking anyone to ‘give’ to charity. At Tickets-for-Charity, donations are captured from the ticket premiums that consumers are currently paying ticket brokers and scalpers, but given the option would much rather direct to charity.” The organization does not focus solely on music entertainment, but also boasts tickets to games of various sports, including baseball and golf and the theatre. Theatre options include Broadway productions as well as high-profile comedian gigs, such as Dane Cook’s current show. This kind of versatility in offerings adds to the success of the Tickets-for-Charity venture.

Pollstar reports that Tickets-for-Charity has already raised more than $3 million in donations for at least 30 different charities.  In fact, a recent James Taylor concert raised more than $300,000 alone, with proceeds going to the National Resources Defense Council.

In fact, Taylor is such an avid supporter of the organization that he has enlisted the help of behind-the-scenes Hollywood heavyweights, attorney Joel Katz and Creative Artist Agency agent Rob Light, to sit on the board of directors for the organization. He released a statement through Tickets-for-Charity stating that the organization gives artists from all genres the opportunity to  ”join forces with this visionary organization with minimal effort to make a real difference.”

Artists participating in this new venture include Carlos Santana, Coldplay, Diana Krall, Kenny Chesney, Elton John, Billy Joel and others. Fans have reacted positively to this new installment within the secondary ticket market realm thus far, purchasing seats to Tickets-for-Charity shows in large numbers. As the number of people supporting this venture continues to grow, it is increasingly likely that the list of artists involve will continue to grow as well.

Ever since last year’s “Hannah Montana Best of Both Worlds Tour,” parents have been clamoring for convenient and fair access to Miley Cyrus concert tickets.  Aware of the complaints, Cyrus has taken steps to make tickets for her upcoming tour as accessible as possible.

For parents believing all their prayers have finally been answered might want to remember the old saying, “be careful what you wish for.”

In 2008, Cyrus was sued over claims that paid membership to her Hannah Montana fan club would increase their chances of securing concert tickets.  Apparently, parents of these fans mistakenly believed “increased chances” was actually a “guarantee.”

Perhaps their gullibility was a product of their desperation.  Parents were looking for any advantage they could find when it came to buying Hannah Montana tickets.  Not only were her shows selling out in minutes but tickets were quickly finding their way onto the secondary ticket market.  Some of these tickets were reselling for as high as 10 times their face value price.

Parents, furious over having to choose between their child’s happiness and paying their mortgage, began to accuse Ticketmaster of being in cahoots with scalpers.  The alacrity in which Hannah Montana tickets were selling made these frustrated parents certain that scalpers had some kind of an inside track.

This acrimony prompted a Ticketmaster official to famously utter, “hell hath no fury like the parent of a child throwing a tantrum.”  The tour’s promoter, AEG Live, stressed they were doing everything in their power to make the distribution of tickets fair but added that no one had seen this level of demand since the days of the Beatles and Elvis.

For her upcoming 2009 North American Tour, which begins September 14 in Portland, Oregon, Cyrus is hoping to avoid any and all problems with ticket availability by going paperless.  This procedure reportedly ensures that fans have fair access to tickets at their original face value price.

Here’s how paperless tickets work: on the day of the show the person who bought the tickets (i.e. mom or dad) needs to bring the credit card used in the transaction and their driver license to the venue.  All members of the ticket purchaser’s party must be present when entering (if you bought tickets for friends, they can’t meet you inside later you all have to enter together).  Instead of scanning a ticket, the usher will swipe the credit card.  Then everyone is given a “seat locator” which is just a fancy name for a ticket stub.

It sounds like a fool-proof process that will be executed one-hundred percent of the time with flawless precision.

However there is one problem with paperless tickets.  Miley Cyrus can no longer withhold tickets from the general public and sell them on the secondary market at huge mark-ups.

To compensate for the loss of a lucrative revenue stream, Cyrus will scalp her own tickets.  Fan club members will be able to purchase VIP “ticket packages.”  These “packages” sell for $295 and includes a seat in the first 25 rows, access to a pre-show party (Cyrus won’t be present), a gift bag, a souvenir, and parking.

“This appears to be nothing more than a bait and switch by Miley Cyrus,” notes industry expert Don Vaccaro, president and CEO of TicketNetwork, to TicketNews.com. “[H]er camp doesn’t disclose to her teenage fans that she is withholding her best tickets to scalp them at almost $300 each, leaving her true fans without access to some of the best tickets.”

The Wall Street Journal concurs.  In a recent article the paper wrote, “Ticketmaster… plans to offer prime seats as part of special premium packages that include other perks. That will allow Ms. Cyrus and the company to capture some of the added revenue that normally flows to scalpers.”

Cyrus is doing the exact same thing that her fans (or at least her fans’ parents) accused Ticketmaster of doing in 2008.

These “ticket packages” are being sold on ILoveAllAccess.com which is owned Front Line Management, the company that manages Cyrus.  That company is owned by Ticketmaster.

Regular tickets for her tour cost (before fees) between $39.50 and $79.50.

As the proposed merger between Ticketmaster and Live Nation undergoes intense scrutiny from congress, consumers are learning more and more about the inner workings of the ticket industry.

One of the latest revelations is the apparent industry-wide practice of artists withholding tickets from the general public in order to sell them at inflated prices on the secondary market.  Another subject that has recently received attention involves Ticketmaster and the companies they perceive as competitors.

Just weeks after Live Nation began selling tickets to their own venues, Ticketmaster announced plans to merge with the company.  The timing obviously raises the question that if Live Nation can’t compete with Ticketmaster who can?  After all, even without merging, Ticketmaster still tickets 80 percent of the venues in America.

According to Ticketmaster Entertainment CEO Irving Azoff there is plenty of competition in the primary ticket market.  In testimony before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, Azoff mentioned several of his company’s rivals including Tickets.com, Veritix, New Era Tickets and Ticket Horse.

Azoff’s then argued that technology itself is one of Ticketmaster’s main competitors.  Any venue can enter the ticket game and break away from Ticketmaster’s auspices by utilizing the latest ticketing software.

One such ticketing program is made by Paciolan Technologies.  It’s used by New Era Tickets as well as several other Ticketmaster competitors.  This software enables venues to sidestep Ticketmaster and ticket events on their own.

Ticketmaster realized the advantages of Paciolan’s software and bought the company in 2007.  With Paciolan Technologies in the Ticketmaster family, the company now controls the licensing fees and maintenance cost of in-house ticketing software used by their so-called competitors.

This puts Ticketmaster in a position to manipulate, coerce, or at the very at least, under service venues who use Paciolan software but are independent of Ticketmaster.

However, two of Paciolan’s biggest clients seem to contradict this fear.  New Era Tickets and UNLVtickets.com have both publicly expressed their happiness with Paciolan’s products and services.

In the same hearings, consumers also learned that promoters, record labels, artists and sponsors are withholding concert tickets from the general public to sell on the secondary market.  Azoff and Live Nation CEO Michael Rapino both confirmed this practice.

Senator Brad Sherman expressed concerns that up to 15-20 percent of the available tickets for an event are withheld.  However, in an email Live Nation Senior Vice President John Vlautin confirmed that the number is significantly low when compared to the capacity of the venue.

The practice of the artist holding back tickets came to light during the recent sale of Bruce Springsteen tickets.  This incident raised questions over the relationship between the primary and the secondary ticket market.

The secondary ticket market is supposed to be a place where customers and brokers can resell tickets, usually for more than face value.  It’s not a market for the artist to sell tickets that is after all the function of the primary market.

These congressional hearings have revealed what many critics and pundits have suspected all along, that Ticketmaster gobbles up their competition and artists sell tickets on the secondary market.

What’s uncertain is whether or not these revelations will prevent the proposed Ticketmaster-Live Nation merger.  However, as the investigation into the merger continues to unfold and more information about the ticket market is made public, it’s clear that Ticketmaster isn’t the only entity making huge profits off the sale of tickets.

This blog post is indebted to TicketNews.com.

In an obvious tribute to rock legend Bruce Springsteen, whose nickname is The Boss and whose tickets sales have been at the center of several controversies lately, U.S. Representative Bill Pacrell, Jr., a Democrat from New Jersey, is introducing legislation called the BOSS ACT that will add a “basic level of transparency” to ticket sales.

BOSS ACT is an acronym that stands for Better Oversight of Secondary Sales and Accountability in Concert Ticketing (and yes, it’s technically the BOSS ACT act).  It’s a piece of legislation that will even the playing fields of both the primary and secondary ticket markets.

“The BOSS ACT is designed to give regular fans a fair chance to purchase reasonably priced tickets for their favorite performances and events,” Rep. Pascrell said in a statement.

Pacrell’s clever acronym is an obvious allusion to infamous ticket selling problem surrounding the February sale of Springsteen concert tickets.  Fans trying to purchase tickets from Ticketmaster.com were redirected to their subsidiary, a secondary ticket site called TicketsNow, where tickets were being sold for well over face value.

In another case involving The Boss, five secondary ticket sellers have been accused of selling tickets to Springsteen concerts at Giants Stadium before the tickets were publicly available.  A practice that New Jersey Attorney General, Anne Milgram, calls fraud.

The five companies named in her lawsuit are TicketNetwork, Orbitz’s Cheaptickets.com, Select-A-Ticket, Ticket Town, Inc. (also known as NortheastTickets.com) and Almost Backstage Inc.  The last two companies have just been recently added.

The practice of selling tickets one does not own is known in secondary ticket market as speculative ticket sales, or “spec selling.”  Milgram will argue that “spec selling” is fraudulent.

It should be noted that none of the incidences singled out by Milgram were “busted” or orders gone unfilled (basically, all the customers got the tickets they ordered).  Also, the three companies originally named in the lawsuit have declined any wrongdoing.

Returning to the BOSS ACT, Pacrell’s legislation would augment the practice of “spec selling” by forcing the resellers to acknowledge whether or not they actually have the ticket in their possession.

The act would also force ticket resellers to register and leave contact information with the Federal Trade Commission (FTC).  In return, the reseller will be given an identification number.

The act also requires secondary ticket resellers to disclose several bits of information that all designed to save the consumer from themselves.  The ticket reseller will have to provide the face value of the ticket (including additional charges), how they obtained the ticket, the seat location, the broker’s FTC identification number, and as previously mentioned, whether or not they actually own the ticket.

The act also forces resellers to clearly indicate on their websites that tickets are being offered for resale.  And lastly, brokers are prohibited from buying tickets during the first 48 hours of the ticket’s primary sale.

As for the primary market, they too are saddled with several provisions.  The most interesting of which is the requirement to publicly announce the number of tickets available for public purchase and the number of tickets withheld from the general sale.

The BOSS ACT also requires primary ticket sellers to print both the face value price and the ancillary chargers on each ticket.  They also must print the method of distribution, as well as the date and time of the ticket sale.

Hopefully, tickets will be big enough to hold all the information the BOSS ACT requires.

Finally, when a concert is canceled, the primary ticket seller must refund the entire purchase price of the ticket, including ancillary chargers.

Perhaps the Act’s most welcomed provisions is the one prohibiting “primary ticketing companies, artists, promoters and their employees from reselling tickets to any event that their employer is involved in hosting, promoting, performing in, or ticketing for more than face value, or reselling tickets to parties with actual knowledge that they have the intention of reselling for higher than face value.”

Basically, this prevents the artist from withholding premium tickets and then selling them on the secondary market at huge markups.  Recently, during congressional hearings concerning the proposed merger of Ticketmaster and Live Nation, executives have revealed that this is a common practice among major artists and a way for them to make millions throughout the course of tour.

The BOSS ACT is similar to legislation that in April, U.S. Senator Charles Schumer, a democrat from New York, announced he was going to introduce.  However, his legislation is still being drafted.

Since the proposed merger of Ticketmaster/Live Nation, questions continue to be raised regarding the effect of the merger on concertgoers. The controversy surrounding the merger is centered on the fact that Ticketmaster has such a large stake in the ticketing business, according to the Ticket News Web site.

Those opposing the merger say that the two ticketing giants clearly violate antitrust violations that stipulate one company cannot control every aspects of the live entertainment business says Ticket News. These laws are in place to prevent one company from controlling both tickets and representation aspects of the entertainment industry, which could result in high prices for customers.

Complications from the merger have already been cited in light of the ticketing fiasco for a recent Bruce Springsteen show. Fans interested in purchasing tickets were redirected from the official Ticketmaster site to a secondary ticket purchasing site, TicketsNow, which had inflated prices for fans looking to attend the show. This blunder was explained by Irving Azoff, CEO of Ticketmaster, as a simple software glitch.

According to Ticket News, there are some voices that feel that the Ticketmaster/Live Nation merger is in fact beneficial to the music industry as the current method of providing live entertainment is seen as outdated and unrealistic. Consumers are paying more money and artists are making less per show. The merger would instead provide added balance to both aspects.

In fact, Peter Luuko, COO and President of Comcast-Spectacor in Philadelphia, PA is one such proponent of Ticketmaster/Live Nation. Luuko, whose company owns the Wachovia Center in Philadelphia, the Flyers and the 76ers, New Era Tickets and Ovations Food Services, testified to the House Judiciary Subcommittee on Courts and Competition Policy the merger has spurred some much needed competition in the industry.

In fact, Ticket News reports that Luuko’s company is exactly what Ticketmaster/Live Nation is aspiring to be — in terms of its full service capabilities

“Even though we compete with Ticketmaster we’re not against the merger,” Luukko said to TicketNews. “I think the more opportunity they have to be involved in the process, from the band’s rights through the ticketing experience and all the merchandising capabilities, it gives them the opportunity to control more revenue streams which will give them the ability to do more tours and take more risks. I believe it [the merger] will have the ability to create more content and more touring acts.”

However, it is important to note that one aspect of the controversy surrounds the purchase of Paciolan, a ticketing software program that gives venues the opportunity to directly control the process of ticketing, by Ticketmaster in 2007. According to antitrust practitioner Robert Doyle, the purchase of Paciolan by Ticketmaster is an example of just how far Ticketmaster’s reach extends in the live entertainment industry.

“How fully competitive could Paciolan be against Ticketmaster,” he said to Ticket News, “if it is in fact the technology that Ticketmaster leases to third parties?”

Despite myriad unanswered questions regarding the influence of Ticket Master/Live Nation and the presentation of facts and opinions to the House committee, the company continues to forge ahead creating a ripple effect — seen as both positive and negative — on the music industry.

Supply and demand is a fundamental principle that our society thrives upon.  It is how people attain goods, make money; it is the basics of any successful consumer-driven capitalist nation.  But what happens when the demand exceeds the supply, or worse, when the demand is for something of which there is no supply at all?

Bruce Springsteen fans, oddly enough, are dealing with this conundrum first hand.  According to an article by Alfred Branch, Jr., as posted on www.ticketnews.com, on May 26, two secondary ticket companies (TicketNetwork and Select-A-Ticket) sold tickets to Springsteen’s upcoming concert—even though tickets did not officially go on sale until June 1.

Not only were these ticket companies selling tickets that they did not yet possess, the article goes on to say, they were selling some tickets that did not even exist in the venue.

New Jersey Attorney General Anne Milgram is putting her foot down on fraudulent situations like these.  “Selling tickets before they are made available for initial purchase by the public is an outrageous practice.  It is fraud to offer to sell a product that one does not possess, and may never possess.”

Given Springsteen’s popularity in his home state it is not surprising that the demand for tickets has grown so high; the demand is much higher than any supply could accommodate.  Unfortunately, this creates an ideal situation for those trying to cash in on this supremely high demand.

According to a statement released by Donald Vaccaro, founder and CEO of TicketNetwork, Vaccaro hopes, “to work closely with the Attorney General’s office to ensure [that promoters and producers] supply adequate information about the availability of tickets to entertainment events.”

While, in certain situations, a fixed supply cannot satiate a large volume of demand, hopefully more stringent regulations will keep those with a lot of honest demand safe from those with no real supply.

Last week, I was fortunate enough to attend a Boston Red Sox game.  As I made my way through the crowds to Fenway Park, I heard multiple voices shouting out “Who needs tickets?” and “Tickets here!”  Thinking nothing of these calls—I had my SRO tickets already!—I walked on.  I then overheard one girl telling her friend how she secured her baseball tickets from a secondary ticket website, much like I had.  I wondered how many people at the game were there as a result of scalping.

The secondary ticket market is a booming industry.  The Economics of Ticket Scalping and Its Effect on Modern American Culture, posted on Tha Good Life Reviews, analyzes this market in relation to the economy.  We live in a Capitalist society where supply and demand is a fundamental principle.  If a person wants something, he/she will pay for it.  If a person will pay for something, somebody else will sell it to him/her.  And if somebody is going to sell something, he/she will try to make a profit off of it.  Few would argue with these ideas.  But then why do so many people view scalping negatively?

Ticket Scalping and Its Effects goes on to discuss rising ticket prices—face value has increased about 82% from 1996 to 2003 and while ticket sales are down by volume, concert revenue has increased—and its causes.  Some credit it to concerts’ increased production costs while others claim this is because more people illegally download music and, without spending money on CDs and recordings, fans have more money to put towards tickets causing vendors to charge more.

But, as the article says, the market only exists because buyers are willing to pay.  Nobody is forcing people to buy a ticket to a show but shows and events are a luxury and luxuries cost money.  Secondary ticket markets offer more than just a ticket to a show; they offer ease.  Other people are getting up early to wait in line at a ticket booth or online on a website.  They are providing you with a service and have a right to collect on it.

I have definitely paid more than face value for Jason Mraz tickets, my favorite musician of the past eight years.  I’d prefer to spend a little extra money on easily getting great seats for a Mraz show (or even a Paul McCartney concert) than on a fancy dinner, a great pair of shoes, or any other luxury out there.  To me, it’s worth it.  You can’t put a price on passion.