LCD Soundsystem's campaign against ticket scalpers.

Commentary about business and finance.
Feb. 15 2011 5:37 PM

Hipsters v. Scalpers

How LCD Soundsystem is trying to foil professional ticket resellers.

(Continued from Page 1)

The market had failed in his mind. He told fans not to pay thousands of dollars to get into the Madison Square Garden show: "I will try to figure a way out to fuck these fuckers. NO MATTER WHAT WE DO, IT IS NOT WORTH THAT KIND OF MONEY TO SEE US!" Soon enough, he realized he had an ace up his sleeve. He flooded the market, adding shows, upping ticket supply, and hopefully pushing prices down. (Those shows will go on sale this Friday.)

Thankfully, in the future, other bands need not resort to such measures—there are more effective ways to make sure tickets end up directly in fans' hands. Perhaps the most promising is a method popularized on Miley Cyrus' 2008 "Best of Both Worlds" tour. "Paperless tickets"—which are, alas, illegal in New York— work a bit like airplane tickets: Fans need to bring their credit card when arriving for the show, effectively killing off much of the scalpers' market.

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Still, paperless ticketing is not a panacea for fans, says music industry expert Bob Lefsetz. In the case of LCD Soundsystem, ticket supply might have been part of the problem. "There are usually multiple presale events before a show goes on sale to the public," he explains. "There's a sale to the fan club. There's an American Express presale. There might be a venue presale. Then, there are holdbacks—the artist, the venue, the promoter all hold back tickets." That means, despite the fact that the Garden holds 13,000 people, the band could have released as few as 1,000 tickets to the general public last Friday—one way or another, there might have been a lot of disappointed fans.

And looking forward, he notes that some bands actually might not want to do paperless ticketing. "There are a million other shenanigans" that acts use both to retain profits and to make sure shows sell out—shenanigans unavailable if bands choose to sell with paperless tickets. "Many bands actually scalp their own tickets," Lefsetz notes.

Ticketmaster, for its part, supports the move toward paperless ticketing, as do a number of popular groups. Then again, Ticketmaster has hedged its bets on the future of the industry: It bought its own secondary reseller a few years ago.

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