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StubHub, CEO hit with ‘deceptive practices’ class action over mass scalping

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Re: StubHub, CEO hit with ‘deceptive practices’ class action over mass scalping

#61

Post by pixl97 »

gruez wrote: post #35
pixl97 wrote: post #28

Earlier quoted context omitted.

Onion futures act. This is the reason that businesses don't try to monopolize the food industry. It's not competition as we just saw from the egg industry. The government gets pushed back from the masses pretty quickly on food related issues.

>This is the reason that businesses don't try to monopolize the food industry. It's not competition as we just saw from the egg industry. The government gets pushed back from the masses pretty quickly on food related issues. But you provided your own counterexample with eggs?

Note they didn't monopolize it, so I guess that was correct. They did form a cartel that did cause a lot of political issues, and if we had a functioning government would have been a very risky bet.

Re: StubHub, CEO hit with ‘deceptive practices’ class action over mass scalping

#62

Post by ipaddr »

brookst wrote: post #56
mathattack wrote: post #52

Earlier quoted context omitted.

The price tickets sell for will be higher if scalping exists. Demand increases for 2 reasons: 1 - I’m more likely to buy a ticket or pay a higher price if there’s a chance of turning a profit if I can’t go. 2 - Speculators are more likely to buy unused inventory if they can turn a profit. This increases total tickets sold. (Scalpers get paid for taking risk) I’m not defending this. I’ve given up on concerts for my fa…

All of your points apply to performers who may not sell out, so scalpers take risk, you may buy more, speculators may soak up what would go unused. But consider Ms. Swift. All of her shows sell out, period. Face value tickets are maybe $400 max, and resell for $2000+. I don’t think she sees any benefit from scalpers. Ditto any performer that is in very high demand and certain to sell out and have unmet demand.

They get a cut of the tickets live nation puts on the resellers site.

Re: StubHub, CEO hit with ‘deceptive practices’ class action over mass scalping

#63

Post by AlotOfReading »

rtpg wrote: post #51
vjvjvjvjghv wrote: post #7

I don’t really understand the outrage over scalpers. Isn’t this just normal market behavior? Is a retailer that buys things and sells them with a markup a scalper? People seem to be willing to pay crazy prices for events.

If reselling is allowed a market is created, pushing up prices. But that extra money doesn't go towards anyone involved in the creation of the product! It goes towards scalpers. Though there's a bit of price discovery value.... Without reselling scalpers have no reason to scoop up the tickets. So if you prevent reselling... then concertgoers just have to do a lottery or something for the scarce resource and people wh…

I suspect we'd see management companies trying out auctions and upgrade bidding not long after a resale prohibition passed. Or they'd reinvent the fare class system airlines use.

Re: StubHub, CEO hit with ‘deceptive practices’ class action over mass scalping

#64

Post by TZubiri »

dataflow wrote: post #59
TZubiri wrote: post #40

Earlier quoted context omitted.

Not a lawyer but here's how it works: Illegal usually means there's a law forbidding it. Tickets are usually governed by the Terms and Conditions (Contract) between original purchase. It's already possible for the terms to forbid resale. So as it stands it's possible to sell untransferable tickets. And those who sell such tickets are in breach of contract, but are not breaking a law. What would 'making reselling tick…

IANAL, but if you enter a contract with the intent to violate it, is that legal? My understanding is that it's technically illegal (only civil perhaps, but still illegal), the impracticality of enforcement notwithstanding. Also, I have no idea if the contract for a ticket "sale" is really considered a contract for the purposes of such laws.

>but if you enter a contract with the intent to violate it, is that legal? My understanding is that it's technically illegal (only civil perhaps, but still illegal), the impracticality of enforcement notwithstanding.

On the first matter, I'm not sure, it might be fraud, which can be civil or criminal if there's a specific law that defines criminal penalties.

Again I guess the proposal could be that a law specifies that the resale of tickets is a so and so crime (misdemeanor?) and carries a penalty of X. We are steelmanning the argument here, and it still sounds quite untenable.

On the civil front, I can see how the intent to breach a term might be relevant, but I can also see how it might be irrelevant, in the sense that the breaching party would be forced to remedy the damages of the breach, no more no less. How would the intent to breach a term increase or reduce the damage caused by the breach if so?

>Also, I have no idea if the contract for a ticket "sale" is really considered a contract for the purposes of such laws.

On the second matter, it really is. The layman perception of a contract is usually a formal document that needs to be signed, whereas in no legal systems that I know of are these actual elements of a contract. In most legal systems a contract is a much broader concept: a private agreement between two parties, with the main defining elements being offer, acceptance and consideration. Most if not all trade transactions are contracts, they include the main elements.

Re: StubHub, CEO hit with ‘deceptive practices’ class action over mass scalping

#65

Post by dataflow »

TZubiri wrote: post #64
dataflow wrote: post #59

Earlier quoted context omitted.

IANAL, but if you enter a contract with the intent to violate it, is that legal? My understanding is that it's technically illegal (only civil perhaps, but still illegal), the impracticality of enforcement notwithstanding. Also, I have no idea if the contract for a ticket "sale" is really considered a contract for the purposes of such laws.

>but if you enter a contract with the intent to violate it, is that legal? My understanding is that it's technically illegal (only civil perhaps, but still illegal), the impracticality of enforcement notwithstanding. On the first matter, I'm not sure, it might be fraud, which can be civil or criminal if there's a specific law that defines criminal penalties. Again I guess the proposal could be that a law specifies th…

> On the second matter, it really is. The layman perception of a contract is usually a formal document that needs to be signed, whereas in no legal systems that I know of are these actual elements of a contract. In most legal systems a contract is a much broader concept: a private agreement between two parties, with the main defining elements being offer, acceptance and consideration. Most if not all trade transactions are contracts, they include the main elements.

Note the layman perception wasn't why I was doubting this; I'm aware not all contracts are that formal. The reason was I don't know if this is considered a sale or not, and whether other principles apply in that case (like first sale doctrine) and if they might somehow override this.

Re: StubHub, CEO hit with ‘deceptive practices’ class action over mass scalping

#66

Post by mathattack »

brookst wrote: post #56
mathattack wrote: post #52

Earlier quoted context omitted.

The price tickets sell for will be higher if scalping exists. Demand increases for 2 reasons: 1 - I’m more likely to buy a ticket or pay a higher price if there’s a chance of turning a profit if I can’t go. 2 - Speculators are more likely to buy unused inventory if they can turn a profit. This increases total tickets sold. (Scalpers get paid for taking risk) I’m not defending this. I’ve given up on concerts for my fa…

All of your points apply to performers who may not sell out, so scalpers take risk, you may buy more, speculators may soak up what would go unused. But consider Ms. Swift. All of her shows sell out, period. Face value tickets are maybe $400 max, and resell for $2000+. I don’t think she sees any benefit from scalpers. Ditto any performer that is in very high demand and certain to sell out and have unmet demand.

In addition to what others say, the potential for profiting later increases the initial price.

Think of it this way… let’s say two identical companies are going to IPO. Company one you can sell the shares for a profit later if you like. Company two you can only sell for the price you bought.

Which will have the higher IPO price?

Re: StubHub, CEO hit with ‘deceptive practices’ class action over mass scalping

#67

Post by meatmanek »

eightysixfour wrote: post #14
gruez wrote: post #10

Earlier quoted context omitted.

You're not entirely wrong, but the root issue is artists not charging the market clearing price for tickets. If you're selling something worth $1000 for $200, you shouldn't be surprised arbitrageurs pop up to take advantage.

> You're not entirely wrong, but the root issue is artists not charging the market clearing price for tickets. Because there is value for the artist in maintaining the perception of accessibility.

My (probably mis-)understanding of StubHub/Ticketmaster is that they're serving as sin eaters / reputation shields for the artists:

Phase 1:

   - Artist lists tickets as "$20"
   - SH/TM charges $20 + $15 convenience fee
   - SH/TM pays the artist $30 and keeps $5
   - Artist gets to look like they're kind/generous for pricing so affordably while making some of SH/TM's cut
Phase 2:

   - SH/TM hold back some percentage of tickets (possibly most or all of them) to sell on the "resale" market
   - Those "resale" tickets sell near the market-clearing price, either earning higher margins than if they had sold at list price, or ensuring that most of the seats in the venue are filled.
   - SH/TM kick back some percentage of revenue from resale tickets to the artist.

Re: StubHub, CEO hit with ‘deceptive practices’ class action over mass scalping

#68

Post by pibaker »

brookst wrote: post #44
janalsncm wrote: post #41

Earlier quoted context omitted.

You are describing rent-seeking behavior: middle men who add no economic value yet inject themselves into transactions. Yes, this is “normal” in the sense that it is common. It is “normal” in the same way that cancer is “normal”. No, this is not “normal” in the sense of being behavior the government should just tolerate. It is in the same category of market failures as monopolies and externalities.

So is all demand-based pricing rent-seeking? Like selling gold or a house or any other scarce good for more than you paid?

You are mixing things up. Just pricing your product based on demand does not necessarily make you a scalper. It's the fact that you are not the producer of the good itself that makes you one.

To use the real estate example, there is a difference between a developer selling a house it built, and an investor selling a house that he bought when it was cheaper.

Re: StubHub, CEO hit with ‘deceptive practices’ class action over mass scalping

#69

Post by bawolff »

pixl97 wrote: post #28
bawolff wrote: post #25

Earlier quoted context omitted.

There is a reason this doesn't work in general though. If you bought up all the food, farmers would raise prices until either you couldn't afford to do that anymore or eventually there is a splurge of new farmers taking advantage of all your free money until you run out of money. It could maybe work in times of famine where the government introduces price controls or rationing; it does not work in normal times. For b…

Onion futures act. This is the reason that businesses don't try to monopolize the food industry. It's not competition as we just saw from the egg industry. The government gets pushed back from the masses pretty quickly on food related issues.

Yes, although i would argue that a cartel suppressing supply is a different mechanism than what is happening with scalpers.

The onion futures thing is kind of interesting, because it was essentially the opposite of a scalper - they didn't try and buy all the onions to make price go up, they did it to crash the price of onions so that their short positions would pay off. Still a fair counter example to the idea that the market would self correct by itself.

People not trying to monopolize the food industry is a bit of an american centric view, e.g. Canada had a government mandated wheat monopsony for a long time. I think australia had something similar. I'm sure there are plenty of historical food monopolies. They of course couldn't be too greedy or its off with their head.

Re: StubHub, CEO hit with ‘deceptive practices’ class action over mass scalping

#70

Post by bawolff »

ozgrakkurt wrote: post #54
bawolff wrote: post #25

Earlier quoted context omitted.

There is a reason this doesn't work in general though. If you bought up all the food, farmers would raise prices until either you couldn't afford to do that anymore or eventually there is a splurge of new farmers taking advantage of all your free money until you run out of money. It could maybe work in times of famine where the government introduces price controls or rationing; it does not work in normal times. For b…

I really doubt you can’t buy the whole harvest of a farmer if you pay for the whole thing. You can probably buy it for less than normal

But how much less then normal.

Like the logic here is the scalper company buys all the crops and then resells at an exorbitant mark up because everyone needs to eat, but then the market price becomes what the scalper is selling for. Would the farmer really leave that much on the table? They may be willing to give some discount to sell all at once, but there comes a point where it is no longer worth it to them to do so. The whole scalping thing only works if you can buy low sell high, but if you sell high the people you are buying from will start to notice that they too can sell higher to other people.

Concerts are different because there are brand reasons to keep prices low. Farmers aren't a charity, they aren't going to sell significantly below market price just for the good vibes.

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