#TBT: Funny How Supply and Demand Have Nothing to Do With It
Happy #TBT! Here’s an oldie-but-goodie post from Jim: Funny How Supply and Demand Have Nothing to Do With It. [This article was originally published in 2009.]
I recently read an article that, though I hesitate to be unkind, is incredibly shallow. Here’s a key tidbit:
“Who is responsible for the high prices consumers have to pay to see their favorite artists? Three culprits jump to mind.”
The author then goes on to list them. You might want to sit down for this so as to prepare for the shock: Ticketmaster, StubHub/the whole secondary market, and The Music Industry.
Ticketmaster is to blame because of high service fees. StubHub is to blame because it allows people to resell their tickets at higher prices, and “The Music Industry” is to blame because, well, they are about to “collapse.” Actually, it’s not at all clear why they’re to blame, but hey, why let that get in the way of lashing out.
For an article in a business magazine, this piece takes absolutely no account of simple supply and demand. Could it be that people simply value this stuff more now than they used to?
Because it isn’t just concerts where this is true. It’s across the spectrum of live entertainment, in areas where the secondary market is limited and where Ticketmaster has less dominance, like opera.
As I have said before, technology and society have combined to make recorded and broadcast performance less expensive because it’s cheap and easy to get, while making live performance more valuable and scarce. We still long to be together in some fundamental way, but society has pushed us further apart. It puts live entertainment in a place where it has more value to people than it did, when we all belonged to churches, bowling teams, the Fraternity of Water Buffaloes or lived on streets where everybody knew everybody. Sadly, that’s just not how it is anymore, but the instinct to gather is still strong.
Could TM and Live Nation abuse their position? Maybe, but you’re just not going to buy a ticket for more than it’s worth to you. The market really does set prices on tickets because they’re not a “need” in the same way gas, water or electricity are.
So I guess “buyers” should be added to the list of culprits, too!