In the United States, AU$6.5 billion a year is going into the pocket of scalpers, rather than artists, producers and sportspeople.
According to American economist Art Carden, this shows that tickets to events around the world are underpriced. He argues that the scalpers are simply raising the price of tickets to their real market value.
‘Ticketed events do tend to be underpriced, relative to what the market is willing to bear,’ Carden says.
In the case of Hamilton, The New York Times estimates scalpers were making AU$80 million a year reselling tickets. In order to combat this,Hamilton increased their ticket price substantially.
The best seats in the house are now AU$1121, which up until June was the average price for a ticket to Hamilton on the reselling website StubHub.
Another hot ticket at the moment is Harry Potter and the Cursed Child, which has just opened on London’s West End. The producers have implemented an advanced ticketing system that requires potential buyers to wait in a long queue online, and provide identification when entering the theatre.
This not only stops scalpers reselling tickets, but also stops people from reselling tickets when they unexpectedly can’t attend. Only the person whose name is on the ticket can get into the auditorium.
Carden says this allows the producers to control the price of the tickets, and keep them affordable for their target younger demographic.
'If what they want to do is maintain a lifelong relationship with customers, then maybe it is in their best interests in the long run to get those tickets into the hands of people who don’t have a lot of cash right now, but are going to have a whole lot of cash later,’ Carden says.
Another incentive to keep ticket prices affordable is to keep the performers happy—which may be detrimental to Hamilton’s strategy.
In the process of cutting out the scalpers, Hamilton may become unaffordable to anyone but Manhattan fat cats and Wall Street suits with money to burn, meaning the enthusiasm of the audience may suffer.
'For Hamilton, producers want to get the top performers, and they will want to perform in front of people who are really passionate about what they’re doing, rather than just people with money lying around and nothing to do on a Friday night,’ Carden says.
'In this case, the problem is not the pricing, but the fact that there is a big difference in the resources available to the executive in Manhattan and the 17-year-old musical theatre fan.’
Carden says government regulation is a bad idea, as it would incentivise people to spend large amounts of time trying to get around price controls.
If ticket scalping is the free market at work and inequality between rich and poor is increasing, it may be left up to performers and producers looking for long-term loyalty from customers to keep popular sporting and artistic events affordable.