Eliminating Ticket Scalpers

Tickets for hard to get events resell at many times their face value so the pricing mechanism for tickets isn’t working. Demand exceeds supply, but the price is still the same. Ticket brokers snatch up tons of the best seats and resell them to the people who were unable to buy the tickets in the 20 minute window that any were available.

The fans end up paying an obscene amount of money, but the event organizer / performer / team doesn’t see any of that additional revenue. Perhaps (but don’t bet on it) concessions and merchandise might be cheaper if the organizer received all the ticket revenues. If nothing else, you could put an entire arbitrage industry out of business and help your favorite team / artists receive more money to reinvest in themselves.

So what’s my solution?

“Ticktion” – A Ticket Auction for Matching Supply with Demand

Auction characteristics:

Sealed bid – everyone has 24 hours (or 72, or a week) to submit the maximum they are willing to pay for 1 to 8 tickets

– Each venue will be split up into seating sections, you can bid for nose bleeds and front row at different prices, and set the order of preferences for what you’d prefer

– At the end of the auction period, the system would calculate how many bids were put on a given section, and how many seats are available

– If there are less bids than seats available, everyone pays the standard face price (based on section)

– If there are more bids than seats available, the people who make the cut off pay what they bid, the highest bid gets best seats in the section

Benefits for the public / fans:

No longer have to log on the computer at a certain time to have a shot at tickets, have a much longer time frame

Cuts out 98% of middlemen – no more stubhub, no more ticket brokers — the people who are willing to pay the most for their tickets get them, so nobody to resell tickets to

Users can bid for multiple sections of seats at different prices

For each section, just enter # of seats and price you’ll pay for seat

Enter credit card info once

Ability to increase or decrease bid until auction time expires

Benefits for Artists / Venues:

Ability to divide seating areas by assigning what the “best” seats are

Ability to set standard prices for tickets and if supply does not exceed demand, then everyone pays face value

Set amount of time the auction goes for (i.e. 1 to 7 days)

Automated calculation

Full integration with existing site (ticketmaster, fan club, etc)

Option to only auction off the best seats and have face value on the rest

Ticktion can be used with:

Concerts at large venues

Concerts at small venues

Sporting events

Season tickets

Opera / Broadway

Any other event that has more demand than supply that wants to maximize its revenue and minimize the profit made by scalpers

How someone can make money on this:

Per auction fee

Per ticket sale fee

Consulting service advising on how best to price tickets to maximize sales / profits

Most glaring problems / issues:

Ticketmaster.com can make a similar site 100 times better and quicker if it so chooses

Stubhub.com and ticket brokers would have every incentive to crush this (possible lobbying, etc)

Ease of use for end users – if the public doesn’t understand how these auctions work, the idea will fail quickly

Trust – must avoid people thinking / accusing that the system goes to an auction (thereby going down the price curve) even if demand has not exceeded supply

Convincing artists / venues to bypass the current system

o Broadway shows (individual theatres) give the most opportunity to start (but may be difficult because very few shows are consistent hits

o Smaller artists / smaller venues might be more likely to try something new first

o Getting one major sports team or musician on board would make this go mainstream very quickly

There are laws about you can only sell tickets x% higher than face value, may need to make sure tickets do not have a face value price / use some other term

There is no guarantee you’ll get a ticket, this can anger the users:

Jay: but here is my one issue, what if I want to make SURE I get a seat. I want to pay as little as possible but I want to know I can have the seat 100%. Then F your service. I’m set on taking my girl to this concert, you guys are F’ing me, because I can’t gamble this, but I don’t want to bid $1000 to be sure.

Ben: You’d hate this service then

Jay: In that case I would yes

Ben: Because you’d literally bid the maximum you’re willing to pay, but the artists would love this service

Jay: I suppose but if the people don’t like it (like me in the last example it could be trouble

Questions to address:

Should we display the price cutoff before the auction ends to give people a chance to re-bid? Should we ever display the price cutoff?

Ticket distribution / ticket printing / should prices appear on tickets?

Should there be a maximum number of seating sections?

Should there be a maximum number of seating sections a user can bid on?

Ridiculous amounts of server bandwidth may be required

If demand exceeds supply in a section, should that section go to auction (even if the entire auction did not sell out)

How to determine the last seat if 2 people are willing to pay the same amount?

Examples:

There are 100 seats

o 20 seats are considered the best (section A) – face value = $50

o 40 seats are considered good (section B) – face value = $30

o 40 seats are nosebleeds (section F) – face value = $10

Total face value revenue = $2600

The online auction opens at 10am Friday morning and runs until 10 pm Sunday night. It does not matter when a bid is placed.

Users can bid on 1 section, 2 sections, 3 sections or “best available for price”

Example 1:

90 bids received at end of auction

-> Everyone is charged face value for their seat selection

If section A did not have 20 bids, everyone in section B and C is emailed asking if they want to go to section A for $50 (face value)

If section B did not have 40 bids, everyone in section C is emailed asking if they want to upgrade their seats

Unsold seats are available at face value until day of event

Example 2:

120 bids received at end of auction

30 bids for section A -> 10 bids at $100, 10 bids at $80, 10 bids at $60

o 10 at $100 and 10 at $80 get the seats ($1800 in revenue)

50 bids for section B -> 10 bids at $60, 30 bids at $50, 10 bids at $45

o 10 at $60 and 30 at $50 get the seats ($2100 in revenue)

50 bids for section C -> 10 bids at $20, 30 bids at $15, 10 bids at $12

o 10 at $20 and 30 at $15 get the seats ($650 in revenue)

Total revenue is $4550 (compare with $2600 for face value)

In other words:

If there are 5 seats and 10 people who want them, they should all say what they’re really willing to pay, and then the top 5 people pay what they said, and the other 5 don’t get the tickets. There’s no incentive for a broker to participate, because if he got one of the 5 tickets, he has nobody to sell it to (everyone else without a ticket is willing to pay less than he did)

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