The economics and seedy side of sold-out concerts - here's what your kids don’t know about Justin Bieber.
If Justin Bieber was your daughter’s boyfriend, you would not have to worry about getting her great seats to his next show. However, since your daughter is most likely not his girlfriend (you’re not reading this are you Mrs. Gomez?), then you are very likely one of the millions of people who did not get tickets to hear The Biebs sing Boyfriend during his sold-out Believe tour.
Of course, in a few years from now, your tween will emphatically declare she is so over Justin Bieber and will be embarrassed any reminders of her former fandom (hint: keep those posters for blackmail purposes later). Whether or not you were able to snag tickets to the Believe tour while your daughter is still at the height of her Bieber fever may just be her first lesson in pop star economics.
Supply and demand
The Biebs has 29.5 million Twitter followers (wait…oh, 30, there it is!). In theory, if all those fans wanted to attend one of his concerts, he could sell out a 20,000 seat show, 1,475 times. In other words, he could sell out a show every single night for four years straight. Of course, he’s not crazy enough to do that. So you can see that demand clearly outstrips supply.
The first rule of economics is that the more demand exceeds supply, the higher the price rises. The few people who did manage to score tickets - and are willing to part with them - are now selling them for double, even triple, what they paid. Any parents you see on Craigslist or Kijiji looking to buy Justin Bieber tickets for their kid’s 9th birthday and “willing to pay face value” will have a better chance securing a ride on Santa’s sleigh next month.
So when your daughter claims it’s not fair that her friend’s parents were willing to shell out $800 to buy Bieber tickets and you’re not – you can remind her, that actually, it is fair – a fair market price based on what people are willing to pay.
Although that fact will be of absolutely no consolation to her, this would be your moment to coax her into improving her math and science scores so she can become a neurosurgeon and thereafford as many pop star concert tickets as she wishes for her kids one day.
The secondary market
Scalpers have come a long way from your days of scoring last-minute nosebleed seats to the INXS concert. The street corner element still exists, but most have been replaced computer savvy professional “ticket brokers”, legitimate sites such as StubHub, and casual one-off “beer money brokers” and “soccer moms”.
When tickets to a pop star concert go on sale, only a fraction of the seats are actually available for you to buy. Industry experts suggest that an average 10% of tickets are sold in advance to the pop star’s fan club. And a huge chunk gets sold to American Express card holders (that “Front of the Line” thing really works!).
Ticket brokers buy subscriptions to online services that give them inside information on ticket sale times and presale passwords. Brokers then get around ticket-buying limits using multiple accounts, computers and credit cards.
The seamy underside
But before you blame the ticket brokers for shutting your dearest daughter out of her rightful chance to see the Bieber live, you might want to consider the role the artist has to play in the whole process. That’s right, Bieber might not be quite as innocent as his baface implies.
It’s a little known fact that many pop stars allow a portion of their tickets to be sold directly to the secondary market, sometimes making deals with major brokers who then sell those tickets for a juiced-up price. The extra profits filter back to all parties concerned. According to a U.S. News story, there is no evidence that Bieber does this, though Katy Perry reserved the right to hold back tickets from each concert to sell directly on StubHub or other re-selling agencies.
According to ticket brokers-in-the-know, it’s not unusual for up to 90% of a concert’s tickets to be pre-sold, leaving only 10% for you to try and desperately snap up on the first day of official ticket sales. In 2009, a news team investigated a Taylor Swift concert in Nashville, Tennessee. They reported that out of 13,330 seats, roughly 11,720 were reserved in pre-sales. Allegedly, 5,000 tickets went to American Express cardholders, 2,500 went to the fan club, and the remainder went to sponsors, producers, marketers and other hangers-on. That left just 1,610 for the first day of ticket sales. No wonder every concert is a sell-out!
Lessons learned
One lesson to take away from all this is that it does pay to be part of a pop star’s fan club or an Amex cardholder. The other lesson is a tougher one: pop stars are running multi-million dollar businesses. Not only are they in it to become “rich and famous”, but the time they do achieve that level of fandom, they are responsible for a whole lot of people’s jobs, salaries and livelihoods.
Although your kids might think their favourite pop stars are worthy of sainthood, they are, make no mistake, in it for the money. Otherwise, why would they bother to charge a ticket price beyond covering their costs? Why would they limit ticket sales to boost their own revenue and guarantee the optics of a sold-out show? Once they become multi-millionaires, why wouldn’t they donate their ticket revenue to charity and offer more free concerts for their fans?
We’re not saying pop stars should become altruists or that the Biebs is a fraudulent guy (we’re actually quite fond of him, and yes, the kid does a lot for charity). We just want to remind those longing tweens of yours that when Justin Bieber sings about wanting to be your boyfriend, he may just be trying to convince you to buy a ticket to his sold-out show.