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Who really benefits from paperless concert tickets?

June 8, 2009 |  6:36 pm

TM-Miley Ever noticed how many digital "innovations" in the entertainment industry narrow (or attempt to narrow) the rights of customers? That's one ramification of the decision by Ticketmaster, AEG Live and Miley Cyrus to sell "paperless" tickets to Cyrus' fall tour. The seats are being sold online (only to fan-club members at this point), but buyers won't be able to get into the show unless they flash the credit card used to make the purchase and a matching "government issued ID." As a consequence, if you buy tickets to see Cyrus, you're stuck with them -- even if your plans change or your daughter gets the flu the day of the show. (From a Ticketmaster FAQ page: "There are no refunds for this event.") Nor is there any hope for you if the show sells out before you get the chance to buy in. And forget about giving the seats as a gift. If you buy them, Mom and Dad, you're going along for the ride.

Given the restrictions, "paperless" tickets seem like a lower-value option. But don't expect a discount -- no, in Ticketmaster's view, this is a good thing for customers. Why? According to the company's website, "Paperless ticketing ensures that only fans can purchase tickets and attend the event." In other words, no scalpers or resellers will be jumping in line ahead of Cyrus' devoted followers! Granted, scalpers have become more aggressive and ruthlessly effective now that tickets are sold online. Yet they're hardly the only reason fans have been having a tough time scoring seats to hot shows. As the Journal noted in a damning story in March, some top artists and promoters (including AEG Live) create an artificial scarcity by setting aside good seats for resellers, in addition to the ones reserved for fan clubs. They do this because those artists aren't willing to price the best seats as high as the market will pay for them, yet they, their promoters and Ticketmaster deeply resent the ability of resellers and scalpers to capitalize on that demand. So they find ways to sell tickets at fat-cat prices without the stigma of appearing to cater to fat cats.

Secondary markets are important. They help overcome the inefficiencies in primary markets, while giving purchasers a safety net. If "paperless" tickets are the only option for consumers, there will be no secondary market unless Ticketmaster provides one. That's quite a power grab for a company that's awaiting the Justice Department's approval for a blockbuster merger (with Live Nation, the country's leading concert promoter). Perhaps that's why Ticketmaster is doing this round of "paperless" tickets with AEG Live, one of Live Nation's competitors....

-- Jon Healey

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