Secondary Ticket Market

The Internet has become a major playing field for buyers and sellers of tickets. One industry that's arisen as a result of this is the secondary ticket market worth an estimated dollar10-dollar12 billion. This is the part of the market that includes tickets bought by professional brokers as well as extras that season ticket holders can't use. A huge market with tons of small players ranging from global to the local, everybody's getting into the act.

The practice of reselling tickets was once done by street-corner hawkers and fly-by-night ticket brokers. Street vendors, who took positions outside stadiums and concert halls, often dealt in counterfeits.

Of course, buying and selling or reselling tickets isn't new. The only difference is that now many primary ticket companies, music venues, and even professional sports teams are either jumping into the business or partnering with one of the top secondary companies; the demand for Chicago Cubs tickets is so high that the team set up their own secondary event ticket market with a team-owned ticket broker.

There was and to some extent still is a strong criticism on the existence of the secondary ticket market. In the past many laws have been passed against ticket reselling. The justification for all those laws has been the desire to prevent fans from paying exorbitant amounts for tickets.

To better understand how things work, we shall first identify the key players of a secondary market, and examine their part in the whole scenario.

One of the key players of a secondary market is the producer who authorizes the tickets to a given event, assigns its face value (as opposed to the actual market value), controls the number of tickets released to the public, and may make restrictions on how many tickets one person can purchase.

Equally or rather more active are the ticket brokers who use several different means to secure premium and previously sold-out ticket inventories (often in large quantities) for events such as concerts or sporting events. The broker buys the tickets at face value with the intention of reselling them at a higher price.

It has been argued that individuals who genuinely wish to attend a popular event will find themselves unable to get tickets, as they have already been bought by ticket brokers. Whereas, these brokers believe that people who were too late to buy a ticket at let’s say dollar50, some of them will be willing to pay dollar100 for a ticket near the opening of a hit show. If they are right, they claim a dollar50 profit on each ticket.

One would think that all this can be prevented if only the producer would assign the ticket a higher face value. The problem is that in order to make a reasonable profit, the producer wants to make sure that all of the tickets are sold. So keeping in mind the law of demand and supply and forgetting or ignoring the fact that a large amount of revenue is generated through discounts and souvenir sales, he makes the face value of tickets lower than the market value. This creates an opportunity for brokers to buy the tickets at face value and resell them for profit.

The reason that ticket brokers are still quite a sought after entity, is because they get people hard-to-find and previously sold-out tickets that are no longer available through the official box office. Often these brokers are sought out by fans who had not planned in advance for a show hoping for a last minute deals, though at a higher price.
However, it is argued by some fans that brokering has clouded the already fine line between the individuals who genuinely wish to attend a popular event and those who just want to make a hefty profit out of it all.

Clearly, a secondary market will remain in existence and will keep on thriving because the demand for tickets at face value is far greater than the supply of those tickets. On the other hand, people who buy tickets with the intention of reselling them create an open market where the value of the tickets is more closely determined by the demand for them. So there is no point in criticizing it.

For true fans the ideal situation would be where they have a choice of either standing in lines to get some tickets from producers at face value early or/and get some tickets from brokers above face value closer to the show. This way everybody would be happy!