The market for concert tickets has always fascinated me as a microcosm of the supply and demand economy. Plus, as an avid music and sports fan, I wanted to understand how this economy worked, in order to optimize the opportunity to get the best seats possible without paying too high a premium. Given all the hand wringing over the E+I tour tickets, I thought I would share a few misc. ramblings on the topic here...
For many decades, many top artists undervalued tickets to their own shows. Whether you think the price set is "fair" or not, in the abstract, doesn't change the fact that that artists were leaving money on the table. If they sold a $30 seat, and it got resold for $150, then the true value of that ticket was paid to someone other than the artist. Someone else profited off their "art." Whenever there was an disparity in the "face" ticket value and its true value, a market would spring up to profit of off the difference. Back in the old days, when was young, "scalpers" used to pay people to drive to different, out of the way Ticketmaster locations far from the venue where the show was to be played, and buy as many tickets as they could.
Now, there is two ways to look at this. Some artists make a conscious decision to leave value on the table because they believe many of their core fans can't afford to pay the "true value," or shouldn't have to stretch and pay the "true value" from a scalper. This is the Pearl Jam approach. Verified fan club members pick up their tickets on site at the venue, and there is no resale on the best seats, which go to the fan club members. Just as important, the band handles tours itself, rather than signing with an outside vendor like Live Nation.
The other way to look at it, is to funnel the actual "true value" of the ticket to the artist. The basic principle is to beat the "scalpers" at their own game. In other words, price the tickets from the outset at their "true value." This is essentially what Live Nation (I specifically say "Live Nation" and not the band. Discussed below further...) has attempted to do here. The tour management companies for other big acts, like the Rolling Stones, have done this unapologetically for years. The risk in such an approach is attempting to guess what the actual "true value" is, before the tickets have actually gone on sale. In the free market, with "scalped" tickets freely available, that equilibrium occurs naturally. But here Live Nation had to guess. It ultimately decided that the ticket prices we have all seen for the E+I tour represent what the market will readily bear. I think it is learning that their estimation may have been... a tad off....
Take a quick look at tickets in various markets, and especially in markets where a second show was added. I'll take Chicago, since that is one I bought tickets for. Make sure you eliminate the "certified resale" tickets, and limit it to "regular" tickets. Plenty of good seats still available for night one. I'm almost embarrassed for the band on night two. It looks like half the venue is still for sale, and NOT through the second hand market. Something has got to give there, and I doubt it will be a cancelled show. I predict it will be reduced tickets to increase attendance. To save face, Ticketmaster may switch them over to the "verified resale" section so it looks like someone else already paid face value and took the loss, but one way or another, U2 can't afford to play to a half full venue. If you are going to Chicago 2, there is no incentive to buy a ticket right now. Wait until they go down, and snag it later. It won't sell out either way.
My next point relates to how little control the band likely has over ticket prices. I'm going to make some assumptions here, because I obviously don't have the Live Nation/U2 contract available to me, but I think I am right... My understanding is that before U2 360 the band signed a 10+ year contract with Live Nation. My belief is that Live Nation guarantees a set amount of money to the band per show. In exchange, Live Nation handles logistics, booking venues, and setting ticket prices. Any profit above the guaranteed amount plus expenses goes to Live Nation. And as you all know, putting on a U2 show isn't cheap. One thing I've always admired about the band is that it tries to reach the top row in the back of the arena just as much as the front row. (I wrote a review here of the U2 360 show titled "No One Else Tries This Hard.") But of course, U2's set pieces cost an exorbitant amount of money. And the contract requires the band to perform a certain number of shows over the lifetime of the contract, be it in arenas or stadiums. (I'm convinced contractual obligations had at least something to do with the Joshua Tree tour, as Songs of Experience was delayed so long, but that is another topic for another day.) There obviously is pressure for the band to deliver on Live Nation's behalf. I believe that has translated into certain songs (i.e. "hits") in the U2 catalog never leaving the setlist, but again, that is a topic for another time and place... But the point is, I don't believe the band has any control over ticket prices.
Here are a few things to consider about the secondary market... First, I hear people complain all the time about "tickets being on sale on 'X' web site before even the pre-sales." Here is the truth: they don't actually have those tickets yet. There are people that essentially sell ticket "futures." Once the get an order for a ticket, they then attempt to go on the secondary market themselves and buy a comparable ticket to the one they sold to fulfill the order. They make money off the difference. I bet there are some here you have bought tickets on such sites only to get the "we cannot fulfill your order" email.
Another thing to keep in mind is that because a ticket is advertised on a secondary market for a set price, does not mean in any way that it will sell for that amount. There also needs to be a distinction between a professional resale site, and the guy who puts $2,500 worth of tickets on his credit card and thinks he is going to get rich. When the credit card bill comes due 30 days later, and he can't pay the bill, dumping the tickets fast becomes a bigger incentive than paying 18% interest on a credit card. (Check Craigslist about 30 days after the general on sale date. Deals to be had...) Professional resale sites, on the other hand, make money by dealing in volume. And to sights such as Stub Hub, the actual price that the ticket changes hand for is somewhat irrelevant to them. The reason is that they make money off the transaction itself. Much of the transaction fees are the same regardless of the ticket price.
I hope that helps put into perspective what I think we are witnessing: U2 fans being used as guinea pigs in Live Nation's experiment to try to beat the scalpers at their own game and sell, from the start, tickets at their full market value. But music is like sports; much emotion and feeling, less practical sense. Spending $300 or $1000 on concert or sporting event is a decision made with the heart, not the head or wallet. But ultimately, music is art, is it not? And I would argue that taking the Pearl Jam approach and leaving money on the table, handling their own tours, and hitting the road with a low key set, which allows keeping the focus on the music and varying wildly the set lists, has created a fiercely loyal fan base that has compensated the band very very well. Further, that fan base will continue to do so for many years to come. I hope U2's deal with LIve Nation hasn't damaged its relationship with its own base... At some point, the market will only bear what it will bear...
All the best.