Concert ticket flap uncovers oddity of rocknomics
By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Rock stars normally hand out lessons about sex, drugs and trashing hotel rooms. But a battle between dance-rock outfit LCD Soundsystem and ticketing agents over the band’s “last” show offers a strange insight into the laws of supply and demand. On top of that, the kerfuffle also reveals the distortions underlying the U.S. music business.
LCD, fronted by James Murphy, recently decided to call it quits. After three moderately successful records and extensive touring, Murphy said he wanted to go out on a high note and avoid looking like a geriatric rocker. So the band decided to stage its last show at New York’s Madison Square Garden on April 2.
Murphy says promoters were skeptical LCD on its own could sell even a limited run of 13,000 tickets. The band took its chances, and within minutes on Friday all the tickets on offer were snapped up online. The same $50 tickets shortly thereafter appeared for thousands of dollars apiece on reseller websites.
In theory, the quick sellout proves that demand for the tickets far outpaced supply. Higher resale prices corroborate this. On this level, the band simply misjudged interest and the price people — at least as represented by the resellers — would be willing to pay.
But in fact, few fans appear to have got their hands on tickets. According to Murphy, the majority went to the electronic ticket-purchasing systems of the resellers including eBay’s StubHub and TicketsNow — a unit of Live Nation’s Ticketmaster, which officially handled the sale for LCD and is now offering floor seats for as much as $2,588 each.
Setting aside the oddity that one arm of a near-monopoly company can scalp tickets that another arm is responsible for selling at face value, the scalpers made a bet on scarcity. But the apoplectic Murphy is fighting back. He’s increasing supply: the band has said it will play four concerts at a smaller New York venue in the days leading up to the “last” Garden show.
When tickets for the extra four dates hit the market on Friday (presumably through some channel that bypasses the difficulties of the Garden fiasco), fans may have their chance to dance their checkbooks clean, to paraphrase LCD’s lyrics. And even if they don’t, students of economics will gain a livelier than usual case study.