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Ticket brokers, robots, and the free market

Ticketmaster has sued RMG, a company that provides software that allegedly helps ticket brokers snap up seats for popular shows. But the fact that most of these tickets sell suggest that concerts are actually underpriced.

Both the New York Times and Wall Street Journal posted stories this weekend about ticket brokers.

Ticketmaster has sued a Pittsburgh-based company, RMG Technologies, for providing software that allegedly enables brokers to bypass Ticketmaster's online security provisions and snap up all the good tickets minutes after they go on sale. Brokers then turn around and sell these tickets for a hefty profit on sites like StubHub or Craigslist. Both stories quote Chris Kovach, a former broker who was originally named in Ticketmaster's suit, but settled with the company. He claims that he used RMG's software to buy hundreds of sets of tickets at a time.

This has been going on for years, and the Ticketmaster suit was filed back in April, but the press didn't get really angry until the brokers snapped up tickets for tween sensation Hannah Montana. ("I know I promised we'd go to the show, but daddy didn't expect to pay $1,000 for four tickets.")

I get annoyed at these guys as well, but that's the free market at work. Example: I have a friend who goes to maybe one concert a year. He doesn't go to club shows and hasn't bought a CD in 20 years, but once in a while an old band he likes comes through town, and he refuses to settle for anything less than floor seats. If they're marked up one or two hundred dollars, so be it--he'd rather blow his entire music budget on a once-in-a-lifetime concert experience. He won't pay even $30 to sit at the back of the arena.

As long as there's demand for $200, $300, or $1,000 tickets, then the real problem seems to be underpricing by artists and promoters. Ticketmaster certainly thinks so: the company has its own auction site, TicketExchange, and I suspect its suit against the brokers is driven by competitive concerns more than a desire to help the consumer.

If you object--don't buy. You can always hope that they release more tickets the day of the show, or that the brokers misjudged and that there'll be plenty of scalpers with cheap seats outside on the night of the show. (Happens to me all the time: most recently on Saturday at the "sold out" Widespread Panic show in Seattle.)

Or here's an idea: if you really like music and live in a decent-sized city, I can guarantee you there's at least one act playing tonight who you'd thoroughly enjoy, who'd be happy to have you in the audience, and and who won't charge you more than $30 (probably much less) for the privilege. OK, you might not have heard them before, but go with an open mind, bring a date, have a cocktail, and remember what the experience of live music's about--it's not about seeing your middle-aged heroes on a 100-foot television screen and listening to your neighbors scream "down in front."