How Taylor Swift Solved Her Ticket Problem

Last week Taylor Swift kicked off her “Reputation” concert tour. As of now, its North American leg is not a sellout. But even if they don’t sell those seats, their revenue is more than three years ago.

This is the story and the power of the market.

The Scalpers’ Haircut

Like me, you’ve probably tried for tickets to a popular show or concert. At precisely 9 a.m. or whatever the start time you dial Ticketmaster and get a busy signal. So you try again and again and again and again.  Every once in awhile you get through but not usually.

Analog or digital, the problem is scalper bots.

Rapidly swamping the phone lines (and websites), countless bots are buying all of the tickets. Venues like Stubhub then resell them online for two or three times (or more) the original price. As a result, the reseller gets a massive slice of the concert revenue pie.

Verified Fan

To prevent resellers from swooping up the tickets, a procedure called Verified Fan was recently created. The name tells it all. Before buying a ticket you have to confirm that you’re a person. Then, having been pre-approved, you can access tickets when they go on sale.

Still though, the demand for superstar concerts is huge. Because fans are willing and able to buy many more tickets than they can get, the message is clear. Those tickets are underpriced.

Taylor Swift

That takes us back to Taylor Swift’s “Reputation” tour. Her concert planners decided to allocate half the tickets to Verified Fan and to increase the prices of those that remained. Instead of the $225-$40 price range from her 2015 tour, 2018 tickets are $1500-$50. You can imagine what a reseller’s bot would say about a $1500 ticket (No thank you).

So yes, it appears to be working. Taylor Swift no longer has an instantaneous sellout. She could have some empty seats in her 53 concerts at 36 stadiums. But her gross revenue is up.

Our Bottom Line: The Power of the Market

Just a process through which supply and demand determine price and quantity, the market has considerable power. For concert tickets, it signaled that prices were too low by creating a secondary market for resellers.

Then, because we had a secondary ticket market, the timing of our purchases was affected:

So, if stars like Taylor Swift diminish the size of the secondary market for their tickets, surely our behavior will change. But how?

My sources and more: Thanks to WSJ for reminding me that it was time to return to ticket scalping. For the next step, RollingStone and theconversation had the issues. But if you just want some solid analysis. I recommend this paper.

Please note that this post was slightly edited after publication.