Why are Taylor Swift tickets so hard to find? Finances are tough

Paul Crosby is Senior Lecturer in the Department of Economics at Macquarie University

ENTERTAINMENT: Desire, anticipation, frustration and disappointment – every time tickets for Taylor Swift’s tour go on sale there is Bad Blood.

The Australian ticket release for Swift’s Eras world tour has fared better than the United States, prompting a major overhaul of the US ticketing industry. Even so, hundreds of thousands – perhaps millions – of Australian “Swifties” will miss out, or they may end up paying hundreds or thousands of dollars extra to get a ticket.

It is a product of the concert industry, enhanced by the culture of Taylor Swift.

More than 1 million people are said to have signed up for the sale within 12 hours of the Australian concert dates being announced. After tickets went on sale Wednesday morning, more than 4 million users are said to have queued.

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But no more than 450,000 tickets are available for Taylor’s five Australian shows (three at Sydney’s Accor Stadium and two at the Melbourne Cricket Ground). The math is simple. Many ticket seekers will miss out.

The economics in this situation, however, are very difficult.

Supply and demand

Usually when demand increases, sellers – in order to increase profits – look to do one of two things: increase the supply, or increase the price.

Compared to many other markets, however, concert sellers have limited ability to respond to demand signals.

During Swift’s US tour, 17 concerts were added to the 35 originally planned.

This is why Brisbane missed Swift’s concert. Although officials at Brisbane’s Lang Park Stadium (capacity 52,500) had an opening date, the organizers felt it was unhelpful for the Australian tour to be “selected” between the Japan and Singapore dates.

Even without these problems, and the space and other equipment available, the comparison required is an exact science, and the organizers would prefer sold-out shows and avoid the risk of an empty hall.

Price tickets

When demand exceeds supply, economics says the only way to reduce demand is to achieve market equilibrium by increasing prices.

Concert organizers do this to some extent by offering tickets at different prices.

For Sydney and Melbourne tickets, there are seven prices, from A$79.90 (NZ$87) (for “back row” seats) to A$379.90 for “A Reserve” seats in front of the stage. There are also VIP packages, ranging from $349.90 (for a section ticket that costs A $159.90, including supplies) to $1250 for the “It’s Been a Long Time” package (which gets you an “A Reserve” seat plus merchandise. ).

Designers can raise all these prices and still sell (according to a US industry survey, 45% of Swift’s fans are millennials and 11% Gen Z, which is under 24 years old).

However, in most cases, artists don’t want to be seen as ripping off their fans, and their loyal and happy fans are not the ones who can afford to pay more for tickets.

Strong trees

Ticket sellers such as Ticketmaster have also been trying to increase distribution efficiency (and profits) through “dynamic pricing” – charging higher prices when demand is high. This is similar to how the price of plane tickets or Uber rides fluctuate based on demand.

But Ticketmaster says it only uses power prices if an artist agrees — and for good reason.

Rocker Bruce Springsteen allowed about 11% of tickets for his 2023 tour to be sold this way. Reports of “platinum seat” tickets cost up to $4000 for angry fans (although Ticketmaster says the average ticket price was US$262). Fanzine Backstreets has announced it will close after 43 years, citing frustration with ticket prices. Publisher Christopher Phillips said: “These are concerts we cannot afford; which many of our readers cannot afford; and that a large part of our readers have lost interest in this matter.”

Swift’s fans can be more accommodating. He has been allowing strong pricing since at least 2018. But no Australian concert tickets are being sold using premium pricing.

Enter the scalpers

Due to the high demand and the slowness of artists to charge as much as possible, a good opportunity is created to resell tickets at higher prices.

Economists refer to this as the “secondary market”, and see it as a sign that a product or service is being offered at a low or low price (or both). It is called “ticket cutting” or “ticket pulling”, and it is criticized as opportunistic and inappropriate.

After reports that tickets offered to American Express customers were being resold for up to A$3000, the Victorian government declared Swift’s two shows in Melbourne “major events” to trigger a ban on reselling at prices of more than 110%. (NSW has had a universal ticketing policy since 2018.)

But the rise of ticket bots, which can flood websites with millions of requests, and online marketplaces that allow sellers to be identified, make stopping scalpers difficult. (Ticketmaster blamed scalping bots for the crash of the US site in November).

Ticket companies’ efforts to combat scalping include limiting the number of tickets that can be purchased at one time, and requiring customers to verify their identity when purchasing a ticket and attending a show. They have also established “fan to fan” platforms for secondary sales, recognizing that there may be legitimate reasons to sell tickets.

Swifties who want to resell their Australian travel ticket will be able to do so using the platform provided by Ticketek – but not for more than 110% of the purchase price.

Rock band Rage Against the Machine has tried to combat scalping with its own form of pricing. This includes keeping 10% of show tickets, which are sold at a high price but cut off scalpers, with the extra profit going to “charities and/or human rights organizations”. The group estimates that this has reduced scalping by 85% and raised millions in charity.

US singer Maggie Rogers has gone to great lengths to skip online sales and sell tickets at the box office.

But these methods will not help to overcome the iron law of supply and demand of Taylor Swift fans. They just hope that Karma is on their side.

This article was originally published on The Conversation. Read the first article.