The resale of tickets has been around for as long as humans have charged entry to events. Evidence of ticket 'touting' goes all the way back to Ancient Rome.
In the 21st century though, it's becoming an increasingly controversial practice.
Companies like Viagogo, Seatwave and Stubhub now offer tickets to otherwise hard-to-reach events - but, often, at a hefty price.
Today on our podcast, IEA News Editor Kate Andrews interviews Dr Steve Davies, the IEA's Head of Education and author of new report 'Digital Resellers: The case for Secondary Ticket Markets'.
Steve believes that ticket resale is simply one aspect of the 'Sharing Economy' which enables voluntary transactions to take place between willing buyers and sellers. Those who aim to resell tickets for a profit, Steve argues, are themselves taking on considerable risk.
We examine the economics, and the morality, of ticket resale, and take a look at the way artists like Ed Sheeran, Taylor Swift and Madonna use market mechanisms to sell their products.
The discussion by Steve Davies is based on a new paper he has written for the IEA entitled Digital Resellers: The Case for Secondary Ticket Markets. A summary of the report is:
- The reselling of tickets for events has a long history, dating back at least to Roman times.
- Such secondary markets in tickets are no different from other kinds of secondary market, and serve the same purpose: to correct flaws in the initial primary market.
- In recent years, new technology has led to the appearance of many new players in this market. Most of these are facilitating platforms rather than being directly involved as buyers or sellers of tickets.
- This market is fragmented with no firm having more than a very small part of the total secondary ticket market. That market itself is still small compared to the general market for tickets but is growing rapidly.
- This has led to many calls for limitations on ticket resale and, in particular, for what are effectively price caps.
- These arguments are wrongheaded and would disrupt an effective market. The more fundamental or underlying objections to secondary ticket markets are simply rejections of the principles of trade and a refusal to accept the reality of scarcity.
- It is the primary market for tickets that is dysfunctional. The secondary market is correcting its defects, so that tickets get into the hands of those who value them most. We are probably moving towards a new kind of market in tickets.