Taylor Swift Ticketing Debacle in Context.

Update November 19 1:31p.m. PST: Ticketmaster has released a statement regarding this situation. The link to that statement is now included in this blog.

By now, I’m sure most people are aware of the situation regarding Taylor Swift’s Eras Tour presale that went up on Tuesday, November 15. Sluggish websites that eventually ended up crashing, non-working presale codes, waiting in virtual queues for hours and the general frustration that comes with not being able to score tickets to a show that you really wanted to go to. The coup de gras was the cancelling of the general public onsale that was scheduled for Friday, November 18 due to “insufficient inventory”.

I’ve seen a lot of hot takes on the Internet regarding this mess and I wanted to provide some added perspective that I’ve gained from almost 20 years in the ticketing and live event business. I’m not advocating for one party or another, I’m merely pulling back the curtain a little bit to hopefully give the average person a little more clarity and context.

"This is all Live Nation’s or Ticketmaster’s fault. Break Up the Company”

Taylor Swift is an AEG artist (specifically The Messina Touring Group in Austin, TX). The Eras Tour does not take place in any Live Nation owned or operated venues and Ticketmaster (a Live Nation Company) is not ticketing 100% of the tour. Now, there is a discussion to be had about the Live Nation/Ticketmaster merger and whether or not it should have been allowed and whether or not the Justice Department is going to require the two companies to separate. That said, the notion that Live Nation controls “everything” does not apply in this particular situation.

"The prices are too high! Ticketmaster is gouging customers! Dynamic pricing is a scam!"

Ticketing platforms do not set ticket prices. Any and all decisions regarding the price of tickets, the amount and location of tickets available for specific presales or onsales are made by the tour promoter or artist. They also can change prices, decide whether or not to utilize dynamic pricing, request or deny ticket transferability, partner with third party platforms (certain restrictions may apply), require preregistrations and the like.

"But what about the fees? Clearly, it’s Ticketmaster trying to hose the consumer."

Service fees started, in part, as a way for ticketing platforms to recoup the costs associated with operating phone centers/outlets, printing and mailing tickets and providing hardware to venue box offices. This was in the 1970s and 80s. As we moved into the 1990s, concert prices began to creep up with The Eagles famously being the first artist to charge $100 for a ticket. As we moved into the new millennium, revenue from physical media dropped considerably as streaming took over. As such, artists began to take a hard look at how they could maximize their touring revenue. They began to demand higher guarantees from the promoters, who began to squeeze the venues for every dollar generated via ticket sales. The venues responded by partnering with ticketing platforms on service fee rebates and/or adding other fee categories such as a “facility fee” or a “parking fee”. Local governments also got in on the action by implementing an “admission tax” or “entertainment tax” on the sale of tickets. Fee revenue is spread out amongst many different entities, not just the ticketing platform, and the fee amounts have ballooned as a result of the domino effect of artists/promoters increasing ticket prices and trying to claw back as much of the ticket gross as possible from the venues. Service fees are also contracted in the exclusive license agreements with venues and each venue can have a different service fee structure.

"How come the onsale was cancelled?"

I imagine that the onsale being called off has more to do with the fact that there are so many upset people who pre-registered for the presale and were given codes that were unable to buy tickets. (A lot of these “upset” people are undoubtedly ticket brokers and not necessarily Taylor Swift fans.) The inventory that was allotted for the general public onsale is being used to fulfill orders for those folks. Once the dust settles, we may see a new onsale date get announced and any remaining inventory be put onsale. There is also the possibility that seats get released as the show dates get closer. These tickets would come from the contractual holdbacks for the artist, sponsors, media partners, record labels, the venue; typically used for comps or internal buys. These blocks are generally small (I’d estimate 50-100 tickets each for a stadium show). Also, once a show loads into the venue, there is always the possibility of any production seat kills to be opened up for sale.

"I saw thousands of tickets for sale on StubHub two seconds after the event went onsale."

There are multiple reasons for this.

1.) Brokers are better at getting tickets than you are. Major brokers will have multiple people/computers/credit cards working on large sales. They sign up for all the fan clubs, have all the presale passwords and may even have season tickets for the sports team that plays at the venue which may give them better access to tickets for other events. They also utilize aggregator platforms to get their tickets listed on multiple secondary ticket exchanges (e.g., StubHub) all at once.

2.) There are unscrupulous brokers out there who listed tickets on secondary ticket exchanges without being in possession of the tickets. This speculative ticketing practice is a bit of a legal gray area and something that is generally frowned upon by the industry, though not necessarily enforced or regulated. Let’s say somebody lists a ticket for $800.00 and it sells, the broker is betting on the fact they can find a comparable ticket for less money through their network or the open market. It’s short selling, but with tickets. The issue with this arises when a broker can’t fill the order for a profit, or can’t find available inventory, and ends up busting.

3.) There is always the possibility of artists bypassing the primary ticketing platform and listing some tickets directly on the secondary market. Now, this is a bit tricky because the artist would need to get buy in from the ticketing platform in order to do so because, generally speaking, there are exclusivity clauses in the licensing agreements. For example, an artist or promoter can’t just tell a venue box office to take 5,000 tickets and dump them on StubHub. This, along with speculative ticketing, is a frowned upon, though not necessarily regulated practice. Speaking specifically about the Taylor Swift situation, I have no idea one way or the other if this has or is happening.

I had to pre-register for tickets, how is it possible that Ticketmaster didn’t know there would be such high demand? Don’t they care about their customers?

According to Ticketmaster , they issued 1.5 million codes and historical data shows that 40% of those people actually show up and by an average of three tickets each. On Tuesday the 15th, they had 3.5 billion system requests and 14 million people hit the site. It would appear that those without presale codes were still navigating to the site even though would not be able to enter the virtual queue. Furthermore, the amount of bot attacks was “staggering”. It should also be noted that SeatGeek, the primary ticketing provider for five performances in two different venues, also experienced the same issues. Out of curiosity, I logged into the SeatGeek queue for one of the Dallas performances and 1.5 hours later I was still in it until the site errored out on me.

As far as caring about customers is concerned, it’s important to note who the customers of ticket platforms actually are. Ticketing platforms are often bound by exclusive license agreements with venues/events so by extension they are in business with artists and promoters. These folks are the "customers" of ticketing platforms, not actual ticket buyers. In my experience, Ticketmaster takes this concept a step further by actively shielding artists/promoters/venues from bad publicity. They become the punching bag for the general public during problematic onsales, regardless of if the issues are their fault (e.g., buggy website) or not (e.g., high prices, ticket availability).

The bottom line is that major event onsales are a supply-and-demand problem, coupled with a time crunch and feelings of YOLO and FOMO. There is a finite number of dates, locations and tickets that are available and for a tour like Taylor Swift, not everyone is going to be able to go that wants to go. When demand exceeds supply, prices will remain high and there will be an opportunity ticket brokers to make good money. Whether or not the Taylor Swift performance was ticketed by Ticketmaster, SeatGeek any one of the 47 other ticketing companies out there, the prices would have been just as high, the sites would have choked during the presales, and there would be tons of tickets listed on secondary market exchanges.