How does usage of technology benefit ticket brokering and impact the ticket economy?
Technology has greatly changed the way we live our lives. The modern generation is living an “app-centric” life, where simple day-to-day functions have been replaced by streamlined and efficient mobile applications. One such example is that of purchasing tickets. Buying tickets online has become the convention, and that is undoubtedly a trend that many companies and ticket promoters have followed with improved encryption and network security associated with the digital age. In addition, the act of ticket scalping, in which tickets are resold for more expensive prices, has seemingly evolved into ticket brokering because of a technological boom in the ticket industry.
However, how exactly does the internet and technology enable and impact this form of passive income? In the past, tickets were bought directly from ticket offices of promotional centers. Now, Stubhub is the largest service that provides ticket purchases. It was introduced in the early 2000s as a marketplace for tickets and paved the way for many of its competitors, including Razorgator, Ticket Master, Ticket Liquidator, and, recently, the ticket search engine app Seatgeek.
There are multiple reasons for the success of these markets. One of the contributing factors is speed. 79% of Americans shop online, with 87% shopping because of the efficiency and convenience. They have reason to believe so as it only takes less than 2 seconds for a transaction to confirm and 24 hours to process without ever having to leave the house. Additionally, providing an option to buy online can improve sales by 25%, meaning businesses could be incentivized to transition towards online purchasing as well. While the economy for retailers and airlines remains constant since the internet became a platform for purchase, the economy for tickets has changed greatly with the shift to the internet. Unlike the economy for merchandise, the economy for tickets can be extremely elastic depending on the value of the event to customers and the overall demand of the event, itself. According to Eventbrite, 45+ year-olds are more likely to buy tickets three months in advance than younger people, in which only 23% are likely to make early purchases for tickets. This mostly occurs with events that target younger online audiences to capitalize on last-minute purchases. People change their minds just as easily as their schedules change, meaning there is ample opportunity to profit on consumer indecisiveness by charging higher prices whilst also increasing the allocative efficiency of the market. Buying tickets early rewards people who have made up their mind. This trade-off between time and money is, for the most part, eliminated because of the speed of buying tickets.
Another advantage is the ability to purchase in bulk. This affects brokers more than consumers. In the past, buying tickets in bulk would be inefficient because of how inflexible the systems were. However, online platforms now pressure prices to move upwards as the quantity of available tickets decreases over time. Disregarding other factors, buying in bulk turns ticket scalping from an opportunistic cash grab to a full-time occupation brokers can now directly contact the ticket promoters to purchase tickets and maintain a network with those promoters for future events while promoters benefit from having a guaranteed buyer purchase their inventory.
Finally, there is the advantage of safety. Online tickets have different cancellation and refund policy than physical tickets, encouraging riskier purchases. In some cases, the ticket brokering service, like Vivid Seats, guarantees customer safety by pledging to provide “valid and authentic” tickets. Brokers must be screened and anonymous to protect sellers. Because scalping and scamming sellers has become more difficult, the skill of predicting undervalued and undersold tickets has become so much more valuable along with research and understanding the event market. An app like Ticket Liquidator allows for buyers and sellers to directly connect and negotiate, which allows freedom to alter prices not directly tied to market values. Additionally, presenting e-tickets is safer given the barcode system compared to physical tickets that can be lost easily.
Despite the many advantages that online ticketing has provided to the economy and brokering, there are some downsides. For one, some brokers capitalize on clueless consumers and overcharge prices for seats. Some services are starting to address this issue by giving indicators for ticket value or photos of vantage points. Another disadvantage is due to the opposite reason—technology allows for more well-informed consumers, which allows them to purchase from official sources rather than from brokers and resellers due to a perceived safety that buying from the official event website provides. This can harm business for sellers who may not be affiliated with secure ticket reselling platforms and create a barrier to entry for prospective brokers. A final problem is the issue of economies of scale for ticket brokering. As the supply of a broker increases, the communication and networking becomes much more difficult for one person to handle. This limits how many events one person can handle at a time as reselling tickets is ultimately labor-driven.
With prospects in artificial intelligence and blockchain, there is certainly going to be many more breakthroughs. It is expected that as technology grows, so will ticket brokering. Where there is demand, there will be a supply and, thus, an opportunity to capitalize on for many looking to generate passive income in their spare time. It is safe to say that technology has greatly increased the scale of production and ease of safety in this industry.
References
https://www.mhlnews.com/transportation-distribution/delivery-time-top-priority-online-shoppers
https://www.investopedia.com/articles/company-insights/090816/stubhubs-top-4-competitors.asp
http://theconversation.com/the-economics-of-ticket-scalping-83434
https://www.wired.com/story/wired-guide-to-online-shopping/
https://www.eventbrite.co.uk/blog/when-do-people-buy-event-tickets-ds00/
