Hipsters v. Scalpers
How LCD Soundsystem is trying to foil professional ticket resellers.
On April 2, the punk-disco band LCD Soundsystem will play its last-ever show, a huge dance party at Madison Square Garden. At 11 a.m. on Friday, Feb. 11, Ticketmaster was scheduled to put tickets to the show on sale. At exactly 10:50 a.m. on Friday, I went to Ticketmaster's site and set up the appropriate purchase page. At 10:58, I started refreshing constantly. At 11, poised and ready, I got … nothing. The site said there were no tickets available. I reloaded the page madly, and then tried with a new browser window. No tickets. Not even in the nosebleed section.
The band is popular, to be sure, particularly in its hometown of New York. And farewell shows are always hard to get into. But LCD Soundsystem is not quite the Beatles, and Madison Square Garden is not exactly a small club. Had something gone awry? I quickly checked Twitter. Nobody—really nobody, it seemed—had gotten through. Perhaps there was a problem with the site?
No. As it turned out, the show had sold out within seconds. It is just that professional ticket resellers, otherwise known as scalpers, had scooped up the bulk of the seats. Within minutes, hundreds of them were available on StubHub and other secondary markets where sellers can charge whatever they want. Tickets with a face value of $49.50 were going for 12 times that—with some coveted spots in the general-admission dance area going for thousands of dollars.
How did they do it? With bots. Computer systems—not particularly sophisticated ones, either—submit tens of thousands of requests for tickets the very instant they go on sale, crowding regular folks out. A program beats the "captcha" box designed to make sure humans are the ones doing the purchasing. Then the professionals, tickets in hand, head to other sites to put them up for more than face value.
The economist's defense of said behavior goes like this. Ticket sales, for popular bands at least, are characterized by inefficient excess demand: Far more fans are willing to pay face value for a ticket than can purchase tickets—thereby making tickets worth more than face value. Scalpers perform a market-making function, letting ticket prices rise until the market clears. If you want to see LCD Soundsystem, an economist might say, tough luck about your failed initial efforts. But you can still get in—at the market-determined price. So, if seeing that last show is worth it to you, head to StubHub and buy away.
Of course, that theoretical defense is no consolation to the enraged fans looking to dance at LCD Soundsystem's last-ever show—and hoping to buy tickets at the price the band itself set. Indeed, the fan outrage resonates throughout the music world, where concertgoers are increasingly often shut out of the "official" market. A 2006 examination by economist Alan Krueger and others, for instance, found that scalpers sold a full 10 percent of all concert tickets, marking them up 45 percent to 60 percent, on average. The business has grown rapidly since then.
But LCD fans were not left out in the cold. The debacle attracted the wrath of the band's charismatic front man, James Murphy. On LCD Soundsystem's blog, he wrote: "this here is just to say that we were more than taken aback and surprised about the speed of ticket sales for the april 2nd MSG gig, as well as the effectiveness of scalper pieces of fucking shit at getting their hands on said tickets before fans could, and it's knocked us on our asses."
Annie Lowrey, formerly Slate’s Moneybox columnist, is economic policy reporter for the New York Times.
Photograph by Ian Gavan/Getty Images.