Louis CK's direct-sales concert: $6MM+ and running, and scalping all but extinguished

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56 Responses to “Louis CK's direct-sales concert: $6MM+ and running, and scalping all but extinguished”

  1. soylent_plaid says:

    If I were a big ticket promoter, I’d be pretty terrified right now.  Not only is this guy managing his own act, he’s end-running the event ticket racket and making a fortune doing so.  Others may follow once they catch on to the idea that maybe they don’t need ticket promoters anymore.  Or media distribution cartels.

    • bmcraec says:

      “he’s end-running the event ticket racket and making a fortune doing so” is an interesting opinion. I think being $6mm up promoting my own business is awesome, as I’m sure does Louis, but the dickwads populating the entertainment industry are crying about the huge piles of cash they think are being left on the table.

      The difference between a creator running their own business is that they are in for the long haul, whereas the shitheads who have been running the entertainment world as outsourcers and private equity dipshits it’s about PROFIT NOW, screw the customers. They seem to live in a delusion where there is always more audience, or more talent to exploit, and quarter by quarter, they lay waste to the creative landscape, clear-cutting and moving on.

    • sdmikev says:

      I think this is pretty cool, but the bigger issue is that the promoters/ticket sellers/venues saw this coming and joined forces.
      Now we have a situation where large acts can in no way play large venues without involving themselves with the man.
      Also, in a lot of cities, they are creeping into the smaller venues as well..

  2. mccrum says:

    Well, this makes no sense.  I was told by a number of web commentators that this would never work.

  3. Finnagain says:

    Old media is so doomed. Record labels, trad publishers, Hollywood.. They are all just doubling down and digging their own graves. 

  4. Tribune says:

    I still don’t understand exactly how he can combat scalpers/brokers. Do they advertise I have  row 5 seats a-d with serial numbers vb4553-vb4557 (numbers made up)? Now I can believe that Ticketmaster etc may not be as vigilant as Louis CK but is it really that easy to track them (i.e. 25% vs 1% scalping is what you get if you actually bother doing something)?

    •  mr c.k. has mentioned some way of ‘turning’ off tickets https://twitter.com/louisck/status/218102501709332481

    • Kevin Hester says:

      I too am curious about this.  I don’t see how it would work?  Does he buy some of the scalped tickets and then cancel all sales to that same credit card?  Doesn’t seem very scalable.

    • Todd Knarr says:

       I believe he sells tickets to a particular person, and ties the name/identity to the ticket number. If the ticket turns up for sale somewhere, he simply voids that ticket (and I think refunds the price to the original purchaser) and puts that seat back in the pool for sale. So if you bought off Ticketmaster, at the gate you’ll find your ticket is void, you’re out your money (the refund went to TM, not you, since TM bought the ticket) and you’ll have to argue with TM about it. Entirely legit, since one of the terms of sale of the tickets is that any attempt to resell or transfer them voids them.

      • Kevin Hester says:

        right – but if the ticket shows up for sale somewhere typically it doesn’t say “seat 32a section 4″.  I presume the seller would just say “two ticks front row of section 4″.  How does he know _which_ ticket was sold?

        • Tribune says:

          exactly what I seem to be missing, I get the mechanisms to kill the ticket – just not the ones to identify offending tickets.

        • AwesomeRobot says:

          Hey man, I see you’re selling tickets – what seats are they for specifically?

        • Todd Knarr says:

           My assumption: by identity. When selling tickets, the ticket number has to be given to the buyer. Buy one from TM, look back to the identity that bought it, cancel *all* the tickets bought by that identity and refund their money.

          • Kevin Hester says:

            yep – but presumably scalpers would use a series of identities for ticket buys?

  5. Kevin Hester says:

    That seems straightforward, but how do you identify a ticket at a scalping site.  Do they typically list exact seat numbers?

  6. Stefan Jones says:

    *sniff* What will become of the caring, always-there-for-you middlemen? Don’t they earn their convenience fees by being, uh, convenient?

    • BarBarSeven says:

      Truth be told, I hate modern scalpers, but I have incredibly fond memories of old school scalpers in the 1980s. Ones that would pay kids—mostly my high school friends—to camp out at night to score tickets. And then would provide a relatively fair markup. Like a  $20 ticket going for $35 or $40. The human aspect is what really controlled the ticket market back then.  Now scalpers run server farms that rival brokerage houses.  So how can a human compete?

  7. Aloisius says:

    It is a little premature to claim scalping is all but extinguished given how far out these shows are.

    StubHub now shows well over a 1000 tickets being scalped for the first two shows on September 1st, 2x as many as last week. No doubt the closer we get to the actual dates these shows happen, the more we’ll see scalping.

    http://www.stubhub.com/louis-ck-tickets/

  8. txhoudini says:

    While what he is doing to combat the professional scalpers is excellent I think a lot of people think he has made 6 million. He hasn’t. He has grossed 6 million. That is before all expenses (venue costs being the big one). 

    Also cutting out Ticketmaster hasn’t made the tickets cheap. Austin tickets for Louis CK are $41 and while I don’t have any comedy shows to compare, music shows at the same venue are as cheap as $39

    • Louis CK says: “Making my shows affordable has always been my goal but two things have always worked against that.  High ticket charges and ticket re-sellers marking up the prices.  Some ticketing services charge more than 40% over the ticket price and, ironically, the lower I’ve made my ticket prices, the more scalpers have bought them up, so the more fans have paid for a lot of my tickets.

      “Tickets across the board, everywhere, are 45 dollars.  That’s what you’ll actually pay.  In every case, that will be less than anyone has actually  paid to see me (after ticket charges)  in about two years and in most cases it’s about half of what you paid last year.”

    • Historybuff says:

       You don’t think $40 for a concert ticket is cheap? You don’t get out to many concerts do you?

      • txhoudini says:

        Austin is the self proclaimed “live music capitol of the world” and in recent years has become a stop for touring comedians. Maybe because of the competition between venues here our ticket prices are lower? I go to quite a few shows every month. Recently I paid $41 for Steven Wright and $48 for Dave Chappelle. Both had a $3 “service fee”. When Louis C.K. performed in Austin in 2010 tickets were $41. So $41 is in the same ballpark.

        My mistake was (and thanks to Vincenzo for pointing this out) in misreading Louis C.K.’s statement about saving money. You save money if you would have had to buy tickets through a reseller.

  9. Travis says:

    Shouldn’t Cory be angered by this? Doesn’t “Ownership” of a ticket allow you to sell it to others at a price you can agree on? Should Louis CK be allowed to retroactively turn off a ticked by use of an EULA?

    • Tribune says:

      Will the ticket be killed if it is sold at (or below) $45?

    • JProffitt71 says:

      I don’t see why Cory would be angry at this, because it isn’t equivalent. Tickets are linked to physical, scarce property, property that for the duration of the show we can say belong to the artist, Louis CK. He is enforcing rules on the exchange of that property in order to limit the artificial scarcity created by scalpers. 

      Digital files that we purchase  copies of and then host on machines that we own, all under the understanding that they are clearly ours – our files, our equipment – are not scarce. DRM enforced by third parties on these files seek to limit our ability to use our machines and modify our copies of our files, enforcing artificial scarcity.

      Besides, Louis CK’s policy can best be summed up as DBAA (Don’t Be an Asshole).

      • lambdaphage says:

        Your reply doesn’t explain why a ticket should be treated differently from any other piece of physical, scarce property (e.g. diamonds, vintage records, &c.) that, by virtue of being property, people are free to dispose of as they wish.  Why is it righteous to protest when Amazon tells me I can’t resell my e-book, but contemptible to protest when a local ordinance tells me I can’t resell a concert ticket? 

        Could you please explain what you mean by “artificial scarcity”, and how scalpers create it? 

        • rausantaella says:

          In this case is different. I think you can sell the ticket back to Louis.

        • ocker3 says:

           If scalpers buy 50% of the tickets to a show, there are now less tickets to that show, in total. Books and CDs can easily be produced in greater numbers, they’re inanimate objects, tickets to a live show have an inherently limited number. Sure, you can move the venue of a live, but that requires huge expense and only works so many times (arguably once in the majority of cases, given most event timeframes).

          I don’t really suffer if I have to read a book after my friend does so he can loan me the book (or sell it to me). Do scalpers buy books and resell them at higher prices? Sure (I think it happened with Harry Potter books), but I can just wait a week or so until the printer spits out more.

          Can a performer just schedule more shows? Maybe, but they’ve often got prior commitments in other cities that they need to keep. A performer’s time is inherently limited, a book’s numbers in the market can Very easily be increased.

          • lambdaphage says:

            We agree that the number of tickets for a given show is fixed.  How does it follow, though, that if scalpers buy 50% of the tickets to a show, there were fewer tickets than before?  To the contrary, there are exactly as many as before:  the scalpers are presumably not buying them in order to light their cigars?  What scalpers do is engage in arbitrage by buying tickets sold below the market price and reselling them at market price. Market price, by definition, is a price at which someone is willing to buy it.  They lose money if they buy a ticket without reselling it.

            If the market price for a given good–a book, say–is more than I’m willing to pay, I may indeed “suffer”* in the sense that I would have preferred to buy the good at a lower price.  But this happens all the time in markets everywhere.  What remedy do you propose for this sort of “suffering” short of preventing people from doing what they will with their property?

            A final scenario: as I’m standing in line for Louis C.K.’s show with my ticket in hand, someone approaches me and offers to buy my ticket for twice face value.  I consider that I would rather have $90 than see the show, so I accept the offer.  Who has been harmed by this transaction?

          • Antinous / Moderator says:

            A final scenario: as I’m standing in line for Louis C.K.’s show with my ticket in hand, someone approaches me and offers to buy my ticket for twice face value. I consider that I would rather have $90 than see the show, so I accept the offer. Who has been harmed by this transaction?

            That fanciful scenario has absolutely nothing to do with this discussion. We’re talking about professional bulk scalpers.

        • Landon Ascheman says:

          Actually the problem comes from the belief that the ticket is property.  The little piece of paper is actually a contract.  

          Buyer has agreed to provide Louis $xx in exchange for being able to watch his show.  There are likely many terms and conditions for such a contract.  One of which being that the contract is non-transferable.  Which is completely legally enforceable.  

          • JProffitt71 says:

            Thank you, that is actually far more accurate than my explanation. The tickets are only tied to property and themselves only confer rights that the ticket-seller grants to the ticket-buyer. As the venues grant Louis their space and seats under the understanding that he can’t turn around and sell off his reservation to another artist, Louis is well within his rights to sell his tickets to us under the understanding that we cant turn around and sell our tickers to others. That is part of the exchange, and based clearly in reason.

            This is property rights in full-force.

          • Antinous / Moderator says:

            Or….he could let the scalpers buy and resell all the tickets, then have Carrot Top show up to do the show.

          • lambdaphage says:

            Ok, so say you throw a right of first refusal into the fine print of the ticket.  Right of first refusal is a contractual right, so the venue is only entitled to recover damages.  What did the venue lose by not buying the ticket back from you in order to resell it for face value?  Exactly $0.

            The contract may be legally enforceable, but as an economic incentive it is perfectly moot.

  10. Aleknevicus says:

    There seems to be much missing from this scheme and I’m dubious that it will work in the long term. (That it’s working now may be due to the fact that the scheme is new and scalpers haven’t modified their countermeasures yet.)

    How does LCK know which ticket is which, if it’s scalped without fully identifying the ticket? (i.e., When scalping a ticket, identify the row but not the seat number.)

    If you attempt to tie a ticket to a specific person (which is double-checked upon entry), you prevent people from buying tickets for friends and family. Given that most people attend shows in a group and prefer to sit together, this would seem to be a fatal flaw.

    How does LCK guard against false positives? (i.e., I want tickets to a sold out show. I flood Craigslist with false offers of seats for sale. When those tickets get cancelled and re-sold, I hope to get lucky purchasing them.)

    I hope LCK is successful in his endeavour, but there are far too many unanswered questions to declare this a success just yet.

    • JProffitt71 says:

      Well wait, let’s think about this, how about:

      - Allow reserving of tickets for others, it’s still tied to an identity

      - Allow refunding of tickets (in event you simply can’t make it)

      - Verify tickets at show

      It is a buyer’s beware market in that people who buy scalped tickets are screwed out of their money, but if it becomes accepted as the norm then everyone will learn “DONT BUY SCALPED TICKETS” and scalpers will lose their market.

  11. Daemonworks says:

    Added bonus: not having to pay ticketmaster’s insane surchages.

  12. lambdaphage says:

    Could you please explain what you mean by “artificial scarcity”, and how scalpers create it? 

    • Antinous / Moderator says:

      You have 100 people. You have enough food to feed 100 people. One person buys it all. Now there’s no food for those people. Artificial scarcity.

      • Jim Saul says:

        See, e.g., Enron energy traders, “rolling blackouts”, “grandma millie”

        http://www.cbsnews.com/2100-18563_162-620795.html 

        • lambdaphage says:

          You have to actually make a case against scalping, not list phrases with negative connotations from a scandal in an entirely separate market.

        • lambdaphage says:

          Replying to this here, since we’ve hit the thread limit.

          You’re just asserting that the onus is on me, but why?  Reselling tickets is a voluntary transaction.  When you want to stop people from making mutually consensual arrangements, the burden of proof lies with you.  That’s not to say it’s never a good idea to intervene in voluntary arrangements, just that there’s a strong presumption in favor of letting them stand unless you have a really, really good reason.  Do you have one?

          Regardless of where the burden of proof actually lies, I’ve laid out a brief case “for” scalping, meaning that I argue that scalping never makes people worse off on the whole, and sometimes makes people better off on the whole.  You’re welcome to respond to that if you have an objection I’ve missed.

      • lambdaphage says:

        What is that person doing with the food?  If they’re reselling it to people at prices they are willing to pay, we have an analogy, and people are still eating.  If they keep it for themselves, people are not eating, but we have no analogy. 

        Scalpers do not do backstrokes in swimming pools filled tickets; they profit by arranging voluntary transactions with concert-going consumers.  A scalper who “creates scarcity” by failing to resell their tickets loses money.

        • JProffitt71 says:

          I define scarcity as availability (or rather unavailability) of something at a certain price. This is logical because the more you are willing to pay for something, the more places you are likely to find it, and as your payment approaches infinity the scarcity approaches a minimum. For instance, cheap electronics are not scarce, expensive houses are not scarce, cheap Ferraris are pretty scarce. 

          When scalpers buy up all the cheap tickets, they create an artificial scarcity of cheap tickets. There is no change in the scarcity of all tickets, but there are exceedingly fewer cheap tickets.

          I still do not understand why people defend scalping. Raising the price while decentralizing the ticket buying process does not seem to add any value, and while the exchange is still voluntary, it is not the direct exchange between the artist and the audience that both parties want. I think the artist loses some of his audience and the audience obviously loses some of their money, while the middleman produces nothing. Of course the money still exists, but I’d rather keep it simple where we know both parties are reaching the best possible exchange. And if this can be achieved by Louis exercising his right to negotiate the contract he is selling then even better.

          • lambdaphage says:

            If you buy a ticket for $45 when you are willing to pay $90, you realize $45 in consumer surplus.  If I buy a ticket for $45 and sell it to you for $90, I realize $45 in consumer surplus.  Either way, $45 worth of surplus will be realized by virtue of the fact that the tickets are being sold for less than people are willing to pay.  What special claim do you have to that surplus that I do not?  Of course you would prefer to have it, but so would the scalper.  What moral reason do we have to prioritize your claim on it?

            While you say that arbitrageurs “produce nothing”, their very existence demonstrates that they are providing a service, i.e. getting tickets to people willing to pay for them.  If tickets are sold so far below market value that getting one  essentially amounts to winning a lottery, then buyers are paying the scalper for their ability to get the tickets at all.  The ensuing transactions raise the price back towards the market-clearing value which the original seller failed to set in the first place. 

            That is the most neutral scenario: in others, scalpers can actually improve net aggregate utility, rather than just shift it around.  Suppose I take my partner to a concert.  We’re not that crazy about the show, but we wanted to get out.  Sensing our reluctance, a scalper offers us more than face value for our tickets.  Now we can go to a nice dinner, a dedicated fan can buy our tickets for market price, and the scalper is rewarded for arranging the transactions.  Do you want to prevent that sort of thing from happening?  If not, how do we tell the “good scalpers” from the “bad scalpers”?  Or is there a difference?

          • tenpou says:

             I do understand that lambda is a troll, but allow me to bite.

            Lambda, imagine that I have two fave comedians whose shows I want to visit, thus stimulating their further creativity and ability to visit my town. Tickets are $45 each. I only have $90. With your case, not only I fail to stimulate one of them,  additional $45 which could be used to buy a ticket for my partner, or the next show, or whatever merchandize, also stimulate nothing. Even if the next show didn’t have scalpels at all, and the tickets are $45, I already don’t have the money – and this is not a given that someone else has and willing to go to this particular show. Thus, half the money I spend stimulate nothing.

        • lambdaphage says:

          I’m replying to tenpou’s comment here, since the comment system doesn’t seem to like long conversations.  If I’m doing it wrong, I’d be glad for a pointer.

          First, the point about trolling.  I think it’s useful to reserve the term “troll” for people who seek controversy and emotional inflammation for their own sake.  Trolls, classically speaking, don’t really care whether what they say is true or false, so long as it is deliberately provocative.  Trolling is a real phenomenon, but it is harmful to mistake trolling for genuine disagreement.  It is specifically harmful for you: if you allow yourself to get into the habit of assuming that people who disagree with you only do so to get your goat, you have the perfect excuse to avoid ever seriously encountering objections to your views.  So, in that sense, it shouldn’t really matter whether I’m “trolling” or not: if I’m trolling and you respond seriously, you reap the benefits of a reasoned exchange nevertheless.  If, however, I’m serious and you’re not, you’re just inching down the slope to a self-contained intellectual ecosystem in which people who disagree with you are considered insincere by definition.  I trust that’s not a place we want to end up?

          Anyway, I think the objection you raise is covered in the first paragraph of my response to JProffitt here: no one denies that there is $45 worth of surplus that someone is going to get, whether it happens to be you, the venue, or someone else.  If you buy at market price from a scalper, then the surplus goes to the scalper and stimulates whatever the scalper wants to spend it on.  Either way, the surplus goes to whoever buys the ticket first, and something gets ‘stimulated’ when the surplus is spent or saved.  The view that the surplus is ‘lost’ when you buy from a scalper is false– the surplus just goes somewhere else.  Specifically, the surplus goes to the person who bought the ticket first, which is still exactly what would have happened if that person had been you. What moral reason do we have to prefer your claim on the surplus rather than the scalper’s?  That is, why should we say that you should realize the surplus no matter who buys the ticket? 

  13. ackpht says:

    Once the concept of the non-transferable concert ticket takes hold, artists can replicate scalpers’ economic benevolence by applying a time-dependent sliding scale to ticket prices, like the airlines do- the closer you get to the event, the higher the price. This ensures that everyone who wants to see the show at market price may do so- it’s just that what that market price is depends on when you buy the ticket. This minimizes the number of unsold tickets, gives people who decide to buy a ticket at the last minute some chance of actually doing so, and puts all profits in the pockets of the service providers. Anything wrong with that?

    • lambdaphage says:

      I don’t see anything wrong with the sliding scale, but I still don’t understand the insistence on non-transferability, which creates deadweight losses.  If the service providers wanted to maximize profits, they would just auction the tickets, let the buyers sort it out amongst themselves if necessary, and admit anyone holding a ticket on concert night.  Why prevent reselling once you have held the auction?

  14. ackpht says:

    Because the whole idea is to shut out scalpers, and making tickets non-transferable is how you do that.

    The sliding price scale then makes the best possible match between available tickets and the market demand at any given point in time, in order to get maximum revenue.

    Why share ticket profits with scalpers if you don’t  have to?

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