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Ticketmaster and Scalpers; Economics of Artist Auctions

Ticketmaster and Scalpers; Economics of Artist Auctions
By Hipsternomics  • Issue #38 • View online

Trying to beat the resellers to that Beyonce ticket!!
Trying to beat the resellers to that Beyonce ticket!!
According to CBC News/Toronto Star investigation, Ticketmaster has been recruiting professional scalpers to expand its resale business, while it controls the supply and demand of tickets and squeeze more money out of fans. CBC and Toronto Star sent a pair of reporters undercover to Ticket Summit 2018, in Las Vegas, posing as scalpers where they were pitched on Ticketmaster’s professional reseller program. At the event, Ticketmaster touted its developed and launched TradeDesk, a web-based inventory management system for scalpers.
“TradeDesk allows scalpers to upload large quantities of tickets purchased from Ticketmaster’s site and quickly list them again for resale, scalpers can hike or drop prices on reams of tickets on Ticketmaster’s site based on their assessment of fan demand.” According to the report, resale tickets are particularly lucrative for Ticketmaster because the company charges fees twice on the same ticket. For example, if Ticketmaster collects $25.75 on a $209.50 ticket on the initial sale, when the owner posts it for resale for $400 on the site, the company stands to collect an additional $76 on the same ticket. #DoubleTaxation
The Shady Economics of Artists' Rise to Fame
Chart of the week
Interesting Quick Hits
  • McDonald’s gets warning about its chicken practice New York State Common Retirement Fund, which is third-largest public pension fund in the U.S. and holds more than $300 million in McDonald’s stock, expressed its concerns over the “potential financial and reputational risks associated with McDonald’s chicken welfare practices.” Along with the Humane Society, they all urge McDonald’s to make “modest reforms” to its chicken welfare policies, including transition to more humane breeds and slaughter practices.
  • Airbnb wants to give hosts stocks in the company as its CEO seeks SEC permission to grant pre-IPO stocks to hosts. Airbnb wants to “align the interests of sharing-economy participants with those of the company” and motivate its hosts to rent out their homes.
  • 🎥 Sinemia debuts $30 unlimited movie subscription plan just as MoviePass fails. Sinemia, which already offers an unlimited plan in Europe, expanded its offering to the US, allows moviegoers to see a movie per day at any theater.
  • Los Angeles moves to ban the sale of fur clothing and accessories, as the City Council voted unanimously for the ban and to formulate a policy that would render fur sales illegal. The ban will take effect two years from the day the policy is signed into law. LA joins Gucci, Versace, Burberry, Norway, the Netherlands, São Paulo, to go fur-free.
  • Wells Fargo to cut up to 26,000 jobs over 3 years as result of Americans’ adoption of digital banking, according to CEO. The nation’s third largest bank by assets, seems to be struggling due to the shady business practices and various scandals in the past few years. In Q2 2018, Wells Fargo was the only major U.S. bank to report lower year-over-year revenue, and had the worst efficiency ratio at 66.7 percent.
  • The Anxiety Economy led by fidget spinners, gravity blankets, meditation apps, adult coloring books, and many more, are all shaping this new arms-race of tools to help us cope better with anxiety. What started as modest kickstarter campaigns, the Fidget Cube, ended up reeling in nearly $6.5 million, while the Gravity Blanket, raised $4.7 million with the promise of a better night’s sleep, as anxiety has become the most common mental health disorder in the US, affecting 18.1 percent of Americans each year and nearly one-third of Americans over their lifetimes, according to the National Institute of Mental Health.
Companies YTD: Wells Fargo -9%, Live Nation (Ticketmaster) +25%, McDonald’s -4%.
Stay strong through this last week of September my friends :-)
Stay strong through this last week of September my friends :-)
Resources of the Week
  • List: Quartz Africa Innovators of 2018 - This annual series identifying 30 of the most ambitious and imaginative minds across Africa. Featuring innovators in science, technology, arts, agriculture, writing and more. #WakandaForever 🙅🏾‍♀️
  • Video: David Rubinstein interviews Jeff Bezos. The richest man ever discusses his mentality, work ethic, mistakes, and how he always think 3 years into the future and expects to make only 3 key business decisions per day.
  • Art exhibit: Harlem Postcards at The Studio Museum an ongoing project that invites contemporary artists to reflect on Harlem while representing an intimate and dynamic perspectives of Harlem. Each photograph has been reproduced as a limited edition postcard available free.
  • Podcast: Masters of Scale, episode on how Spotify founder Daniel Elk scaled the company very fast while building trust with the music industry and subscribers.
  • Book: I just started reading Homegoing by Yaa Gyasi, a book set in Ghana about  two half sisters are born into different villages. While one marries an Englishman and leads a life of comfort in the Cape Coast Castle. The other gets captured in a raid on her village, imprisoned in the very same castle, and sold into slavery. 
  • Random: How Highsnobiety built an empire and grew to become a notable name in the streetwear fashion and music industry.
This weekend’s brief was written at Everyman Espresso in the East Village, Manhattan, while vibing out to JMSN’s new project “Velvet” (Spotify link) a real smooth chill R&B vibes. This dude got vocals! Hope you enjoy!
Thank you for reading through this weekend’s brief! Drop a note to share what articles you found most interesting this week.
Valentine
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