Artists can be greedy, too

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Digital Media Wire’s Mark Hefflinger reported today an announcement by the managers for more than 400 artists, who’ve banded together to seek a piece of the revenue from resold concert tickets. The Resale Rights Society wants to collect licensing fees from resellers, which will allow the resellers to mark the tickets with the society’s seal of approval. Here’s an excerpt from the announcement:

This strikes me as yet another attempt by performers (and their paid help) to glom onto a revenue stream they didn’t create -- the fruits of someone else’s innovation, in which they share none of the risk. Artists on tour typically are paid guarantees equal to much or all of revenue from ticket sales. In fact, they often dictate the ticket prices on their tours. (That’s why Ticketmaster’s obnoxious add-on charges have become a fixture -- with artists capturing so much of the ticket price, surcharges have become a key revenue generator for venues, promoters and ticket sellers.)

The resale market for tickets arose in part because some fans invariably found that they couldn’t use the tickets they bought. But a more important factor, IMHO, is that some seats have always been underpriced. As scalpers and ticket agencies discovered long ago, some people are willing to pay significantly more for a good or last-minute seat than the venue originally charged. Hence the secondary market for tickets. Notably, this latter group of buyers assumes inventory risk from the venue. They buy the seats, then have to find someone else to sell them to at a price higher than the one they paid. If they can’t, it’s their loss -- not the venue’s, and definitely not the artist’s. Any profit the resellers make is the reward they get for taking on the risk of trying to sell seats at a higher price.

Artists could try to eliminate the resale market by allowing venues to auction off seats, with a portion held in reserve to create a last-minute buying window. Or they could get into the resale business themselves, helping fans unload extra tickets or buying and selling premium seats. Some bands have joined forces with resellers to do just that, only to be sued by Ticketmaster, which has its own resale ambitions. If managers want to tap into the revenue generated by the secondary ticket market, they should step up to the plate with new models that place more risk on the artists’ shoulders. And while they’re at it, they should enough margin for venues, promoters and ticket sellers to obviate those accursed convenience charges.