E-Commerce Or Corruption? Ticketmaster Scalps Tickets To Its Own Customers

I'm sure it seemed like a good idea when they thought up the scheme, but there were a few eyebrows raised by Ticketmaster when, as soon as Monday's release of tickets for Bruce Springsteen's upcoming Izod Center shows sold out, it redirected potential ticket buyers to its TicketsNow broker subsidiary. TicketsNow is a web-based aggregator for ticket brokers that offer the tickets they acquire at a substantial markup.

Looks like one pair of those raised eyebrows were owned by a state legislator. Funny, that.

Let's look at the way that the ticket industry seems to work:

- Ticketmaster has certain well-known channels it sells tickets through.

- Ticket brokers have routinely gamed the system Ticketmaster has set up so that they could be sure to acquire a large inventory of popular show tickets.

- Now, if I were Ticketmaster (and had no scruples) I'd look the other way when these sorts of shenanigans happen. Why? Because Ticketmaster's job is to sell tickets, and absent any ethical concerns, that's what it's doing. I'm sure the brokers' practices have always resulted in more sales for Ticketmaster (who, at the same time have shifted the risk involved in selling the tickets to the brokers.)

- The arrangement has also guaranteed windfall profits for brokers, who might eat the outlay if the tickets turn out to be not so popular, but in general make money hand-over-fist.

- Ticketmaster then creates TicketsNow, a way for brokers to increase the visibility of the tickets they've gamed the system to acquire. The logic here probably went something like this: "We'll put 'em right in front of the people who are actively demanding them - and collect an additional fee from the brokers for listing the tickets! What could be better? We're finally getting a piece of the after-sale markup for these tickets!"

- Potential concertgoers start to wonder how all these tickets became available at a substantial markup on the day of sale.

- Some of these people, shut out of the ticket-buying opportunity for a mature artist like Springsteen, are state lawmakers.

- Oops.

"It has always worked this way" will be the claim from Ticketmaster, "we just streamlined the process."

"Then it has always been this corrupt" will be the response from lawmakers...at least ones worth electing again.

We'll see.