Here's an interesting development: CapLion links to a report that TicketMaster will start offering tickets for auction, without upper limits to the bidding.

CapLion also has some commentary on the move, and he doesn't approve. Let me throw in my two cents.

First, let me make it clear that I dislike TicketMaster. I usually buy tickets directly from a venue just to avoid the onerous service charges, whether from a scalper or otherwise (never above face value, though - many people don't realize that it is legal to sell and/or purchase tickets at or below face value at a venue).

Nonetheless, I'm not sure this auction thing is a bad idea. In fact, I've often wondered why event organizers don't already do this. Under the current system, there is more demand for many events than there is ticket availability. The tickets are distributed either to people waiting in line for hours before they go on sale, demon dialers who call during the first minutes of telephone ticket sales, through contests and promotions, or through brokers (scalpers).

Three of those four methods favor the "regular Joe", the exception being purchase from scalpers. Scalpers have led the way for TicketMaster, actually - a search on eBay yields tickets for most major events, and they are pretty much always above face value (as stated in the CBS News article). So, by TicketMaster (or any venue) offering tickets for auction, they are basically cutting out the middle man - the scalper. The attendee is going to pay a certain amount, either way - using either scalpers or TicketMaster. The difference here is that it is legal (scalping at a venue is usually illegal), and the profits go to the ticket seller instead of some scrub with a "connection".

CapLion seems to think that scalpers will now buy up all the tickets and then sell them for a higher price than they do currently. There are a couple reasons I don't think this will happen. First, not all the tickets are going up for auction, only select seats. And not all seats go through TicketMaster - venues often hold back many seats from TM. In fact, they often hold back the best seats for promotions and favors. For the limited set of tickets that do go to auction, scalper prices will be limited by the ability of the "regular Joe" to sell his tickets. That is, if I see that tickets are selling for $1000 on eBay, I may just put my $50 tickets on sale and decide to miss the show. In other words, scalpers always have potential competition if they are too successful. For truly unique seats, no one should be surprised that money is usually required to get them - that's the status quo.

Assuming that non-scalpers use the auction service - and we know they do now, because they buy them from scalpers - then who is hurt? Only scalpers. TicketMaster will make more money, that's for sure. As much as I dislike them, I dislike brokers even more - at least TM is a legitimate business. And presumably some of the extra profit from ticket sales will go to the venue and performers, not just TicketMaster.

CapLion writes "News flash, boys: Selling one $100 ticket for a grand is not better than selling fifty $100 tickets." But that's what scalpers and brokers do - they buy a certain amount, set an arbitrary price, and don't know if they'll sell them all. But if TM or a venue puts 50 tickets on auction, they'll all sell. If one sells for $1000, then that's just more money for the venue. If some sell for $25, that's still better than not selling them for even $50. The total amount of money going to the venue is going to be greater, and it is more likely that all tickets will be used. If scalpers do get in on the action, they will automatically be cutting into each others margins by bidding against one another, with that premium going straight to the venue, artists, and TM.

Maybe I'm an optimist here, but the way I see it, if venues sold tickets for what they are actually worth, they could probably make a lot more money and avoid TM (and their service charges) altogether. That would hurt only scalpers and TicketMaster - a less appealing duo can hardly be assembled. Right now, venues don't make a whole lot on tickets, as much of the income goes to the artists - the venues probably make more once you are at the event, buying drinks and food at exorbitant prices. But if venues could realize greater revenue from some portion of the seats, perhaps they would be willing to sell tickets themselves, on eBay or otherwise.

I still think it would be a mistake to sell every ticket at auction - variable-price economies (like Turkey) are very tiresome. But for some tickets, it could be a big improvement. And anything that cuts down on scalping and/or "service" charges would be a success in my view.