Tickets Are More Valuable When People Have Options
Imagine that you were considering buying a car for $25,000. It’s a car you like, and the payment fits your budget. You’re about to sign the paperwork when you notice a little provision at the bottom that says, “I hereby agree that I may not sell this car to a third party at any time.”
In other words, you own this car ’til the wheels come off or blue smoke starts rising from the engine while you’re going down the 405 at rush hour. What do you do? Just sign it and drive away happily? Maybe.
But most people would start to feel like they’d been cheated, at least a little. If this provision couldn’t be eliminated, your next thought would probably be that the car isn’t worth as much as you thought. You don’t want to pay $25k anymore because one “feature” of the car — your chance to sell it for something later — is now gone.
People who sell tickets in the primary market have mixed feelings about the secondary ticket market, and that’s pretty understandable. It can be a “grey” market at times, and some secondary market people take an adversarial posture toward the primary market sellers whose tickets they’re selling.
As a primary seller myself, I don’t exactly have a dog in this fight, but I do want people to understand this: When a ticket buyer feels that he or she has more options — including the option to sell his or her ticket if for whatever reason they end up not being able to use it — that makes the ticket more valuable.
Most of the performing arts and theater world struggles with this issue and struggles to get more revenue from the marketplace, but it’s worth noting that there’s virtually no trade in the secondary market for tickets in these genres. This is a drag on the price that these venues and producers can get from the market. Even in the sports world, where secondary market sales are very common, there’s a real range of views and policies on the subject.
But it’s not just about reselling, either. Even policies can impact this, and a very firm “no refunds, ever, and we’re offended if you ask” reduces the value of a ticket because it takes away an option. Options have value, and when you remove one, you remove value.
There’s enough friction in the marketplace for live entertainment that it’s really, really important not to make it worse. There’s no one right answer for how to think about the secondary market issue, but whatever you do, you’ve got to know what your trade-offs are. The trade-off for making a ticket purchase absolutely and totally final is that the value of that ticket, all other things being equal, goes down.
Homepage Photo Credit: “tickets here,” © 2009 EvelynGiggles , used under a Creative Commons Attribution license.