This could end the Secondary Market as we know it.

If there were a Perishable Inventory Consortium of all the industries that deal with expiring inventory (shows, restaurants, hotels, etc.), then the Airline Industry would be its leader (and there should be a conference for all these industries, by the way, sharing best practices between each other).

Why do I nominate the Airline Industry as the King of Perishable Inventory?

Because over the past several decades, it has led the way with its initiatives to sell more tickets and offer move value to its customers.  And, like us, the airlines have been up against the ropes many times (a lot of their business depends on non-required spending (i.e. vacations)) yet they’ve roared back, partly because of how good they are at coming up with new ways to maximize their profits before their planes take off.

The airlines were the first to offer last minute discounts in email blasts (anyone remember Smarter Living?).

They were the first to offer “premium seats” (first class, premium economy, etc.).

They were the first to offer variable pricing, with prices flexing depending on time of year (have you booked your Christmas travel yet?).

They were the first (and this is my favorite) to offer scarcity with their tickets (“Only 4 tickets left at this price”).

And so on.

And there’s something in their process that could end the secondary market on Broadway . . . and in sports, concerts, or any form of live entertainment.

Not that I think we should end the secondary market, mind you.  I actually believe having a secondary market is a healthy thing for most industries, including ours (they can buy a lot of tickets to shows early on).  So I shine a spotlight on this one “thing” today not to say that we should do it, but to say that it could happen (whether we like it or not) and both us, and the secondary sellers, should be ready to adapt if it does.

See, there is no secondary market with the airlines, now is there?  At Christmas time, if you don’t have a ticket to Hamilton and all the shows are sold out (which they are), but you really, really want one, you can buy one off someone who has one.  But, if you don’t have a ticket home to Albuquerque, and all the flights are sold out, you can’t buy one from someone else.

Why?

Simple.  You need a photo ID to check in.

With that very simple safeguard (for security reasons of course), no one can sell what they bought to someone else, for more money or for less.

Hotels are the same way.  They weren’t always.  20 years ago, as long as you had a credit card, they were happy to hand over the keys to the room.  Now?  “Photo ID, please,” is what I hear every time I check in.  And if you don’t have one, consider yourself on the street.

Imagine if Broadway shows required a photo ID?

Bam.  The Secondary Market goes poof.  Only people that buy the tickets could use the tickets.

Now, there are a billion downsides to this . . . you couldn’t buy tickets as a gift (although gift cards are the work around there), what about groups (although groups have to fly too and they figure it out), there’d be longer lines to get into the theater (we don’t want to require people to show up 1.5 hours before curtain), and again, secondary market sellers are big time buyers.  I think we should work together rather than drive each other apart.

So I don’t think we’ll see this happen any time soon.  That is, unless the next Hamilton (which looks to be Harry Potter and the Cursed Child) takes an aggressive stance on secondary sellers.  Or unless, and I hate to even say this, but unless “something” happens (and I think you know what I mean) that requires much tighter security in Times Square and at the theaters.  Then, whether we like it or not, we’ll be checking a lot more than bags when people enter our theaters.

 

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Comments
  • I think the downsides far outweigh the benefits with this. First of all, if I buy something, I should have the legal right to sell it to someone else. If I’m sick, or my travel plans change, I should be able to sell or give my tickets to a friend. The only way I would accept this policy is if full and complete refunds were standard…and we know that ain’t happening. Airlines have security issues, which makes them a special case, but I still think what they charge for change fees is absurd.

    This is already happening, by the way, but not in a forced manner. Ticketmaster encourages “mobile delivery” as the best way to get your tickets. But the ability to transfer these to someone can be severely limited, and they can only be re-sold on the ticketmaster market, if available for that performance.

    Additionally, I think there are plenty of lessons to be learned from the airline industry, but the obsession we have with following in their footsteps is misplaced. Airlines are competing with each other selling essentially the same product. Shows are all different and have different target audiences. Last-minute show tickets are usually a luxury “want”. Last-minute plane tickets are usually a necessity. We are selling an experience, they are generally selling utility.

  • Frank says:

    The idea of following the lead of an industry that has literally gone bankrupt multiple times makes ZERO sense. That’s like taking and applying life advice from your drunk, abusive uncle. There is clearly a need to rein in the secondary market as it applies to theater, but airline companies do not have the answer. The products are too dissimilar as mentioned by Jason.

  • Carvanpool says:

    Broadway needs to eliminate the perverted fetish it has on emulating the airlines.

    People hate to fly. The consolidation of the industry has enabled the remaining carriers to nickle and dime its customers with sickening monopolistic impunity.

    The only thing that has saved the airlines is their good luck that oil prices have tanked, not that fares gave decreased, mind you.

    The airlines are antagonistic to unions, farm out maintenance to cut corners and expenses, and only require identification because of government mandated security regulations. They are not to be emulated in any of their anti-consumer practices!

    You sound like that idiot Trump praising Saddam or Putin. The airlines do what they do because they are the bad guys, understand?

    Get real, for crying out loud.

  • Kate says:

    I think another solution is one that I’ve seen work in London. The West End and Off-West End theaters there accept returns on tickets. As a ticket buyer, if I’ve purchased a ticket and can’t use it, I can return it to the box office for anywhere from a 50% to a full refund (minus a handling fee.) What that trains buyers to do is to return unused tickets to the theater instead of putting them onto the secondary market. What it trains buyers to do, also, is not buy tickets on the secondary market because a sold out show is rarely TRULY sold out. As long as they keep checking the official website each day, they can get the returned tickets at face value. And theaters benefit because, as they say, an empty seat doesn’t do a darned thing for word of mouth. Plus they get the extra handling fee and whatever percentage they hold back. Also, my experience at West End theaters is that they all ask for ID. It’s no big deal and totally acceptable. But additionally, they make it so easy to return tickets and buy return tickets that there is absolutely no reason to purchase or sell on the secondary market.

  • Ray says:

    The Glastonbury Festival has required Photo IDs for some years now. More details here: http://www.glastonburyfestivals.co.uk/information/tickets/ticket-info/#HOWTO

  • Josh Klein says:

    Ken, interesting article but it couldn’t/shouldn’t work on Broadway for several reasons. First, every airline passenger (regardless of who the purchased the ticket) must be registered in advance, then bring ID to present at the airport. Broadway & other events do not require each patron to be pre-registered. Second, people have emergencies; the ticket holder must have the option to give/sell an otherwise unused ticket to someone else, even at the last minute. Third, “Secondary Market” does not automatically indicate a ticket is sold above face value. It really means a ticket is made available for acquisition after the original purchase. This covers tickets sold above, below or at face value or as a comp. I believe that once the original acquisition is made, the owner of the ticket can do what (s)he wants with it. Yes, there is no secondary market in the airline industry, but the secondary market will continue to be a major player in live entertainment. And with several ticketing platforms able to show face value and alternative value (I don’t want to say marked up because it may not be) within the same seating chart, the secondary market will continue to thrive.

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