Face Value – The original price of a ticket. This price is usually printed on the ticket.
Market Value – The highest estimated price that a buyer would pay and a seller would accept for a ticket in an open and competitive marketplace.
Primary Market – The first and original distributor of tickets for a team or event, which would include the box office, or a primary seller like Ticketmaster.com and Tickets.com.
Secondary Market – The aftermarket for event tickets. The secondary ticket market is created naturally after the primary ticket sale. Tickets sell for market value instead of face value. www.ticketsofcanada.com
Ticket Broker - A licensed individual or company who resells tickets to events on a professional level (ie. for a career).
Ticket Scalper - A derogatory term for an unlicensed entity who resells tickets to events under non-professional circumstances, often illegally or without certification.
Piggy Back Seats - Tickets that are right behind each other; usually to create a 4 pack or other grouping.
E-Ticket (or TicketFast®) - Tickets that you can print out at home on your computer, and which function just like regular tickets. There are currently some industry concerns about them being much easier to replicate and/or more likely to induced credit card fraud, so be sure to purchase these tickets direct from TicketMaster or from a reputable broker (ie. a member of the CTBA or the NATB).
Ticket brokers engage in ticket speculation, whereby they buy tickets (inventory) from a variety of sources for a given event in the hopes that they can be resold in the future for profit.Usually this occurs for sold out events, or for tickets with premium seating locations that are in high demand.
Like any other speculative product, the resultant prices depend largely on economic forces or the market; specifically supply and demand.For example, if there are fewer tickets on the resale market than people demanding such tickets, then the price will tend to rise.This example is easily understood when we think of commodities, like grain or pork, but tickets can be a bit tricky, because other factors, like location, are important.The fluctuating prices in the secondary ticket market, thanks to economic forces, are more akin to the cost of airplane tickets or hotel rooms.
To understand the additional metrics presented in a ticketing example; please take a look at the concert chart below:
Considering the location of the stage, would you rather sit in Section 118 or Section 301?How about in CFLR, right up from there near the stage?By understanding that seating locale is an important factor in the event experience, we begin to see why different seating locations have different price points, both on the primary market (ie. directly from TicketMaster) and also on the secondary market (ie. when obtained from a ticket broker).
Having virtually unlimited potential price points (see Face… The Facts for more info), dependent upon seating location, is a vastly different paradigm from most other pricing models that are subject to market forces.On the primary market they normally limit the price points to a handful of choices, and these limitations or gaps in pricing can be useful for demonstrating how pricing works in the secondary market.For example, looking at the seating chart below, we can see colour coding used for a particular sports franchise to delineate seating categories, which generally correlates to prices, which are reflected on the face value of the tickets.
The tickets in the PURPLE section have approximately ½ the face value of the tickets in the GREEN section.But as an avid hockey fan, would you rather sit in the last row in the GREEN section in one of the corners, i.e. Sec 301, or in the very first row of PURPLES in section 321, or 309, right at centre ice?
For something like a sporting event, the price in the secondary market can also depend on a variety of other factors, such as the opponent, or even the day of the week. If for example a local rival is in town (ie. the Montreal Canadiens), on a Saturday night, then prices tend to escalate substantially.However, if a less popular team is in town on a Monday night, we may tend to see a marked decrease in demand.
In certain markets, for example with the Toronto Maple Leafs, the tickets are virtually pre-sold-out to season ticket holders, meaning that tickets are never really available for purchase on the primary market, at least for those who are not season ticket holders.Accordingly, if you want to catch a Leafs game, then the chances are you have to go through a ticket broker.
Ticket brokering in some form or another has been around for hundreds of years, however the industry has changed dramatically over the past 10 or 15 years.Virtually gone are the days of hawking tickets in front of stadiums or arenas for cash, with the majority of reputable individuals opting to open legitimate offices where they now employ staff, accept credit cards and other more normative forms of payment, pay their taxes, and even give back to charities and local community efforts.
A good ticket brokerage is really just a service organization that provides access to hart-to-get event tickets, which are important to fans, and businesses looking to entertain clients and other stakeholders.People unfamiliar with the industry often stigmatize ticket brokers, and categorize them with ticket touters (often referred to as scalpers), who subvert normative business regulations, and offer little to no recourse in the case of problems arising; such as last minute cancellations or tickets that prove to be fake.
One question that clients often have is in regards to the difference in the face value printed on the ticket, and the amount charged by a broker in the secondary market.To a broker, the face value is very nearly irrelevant.Consider the example used previously, whereby most fans would rather sit near centre ice in the very first row of PURPLE seating, vs. the last row in the end or corner of GREEN seating, and yet the face value on the PURPLE tickets is slightly less than ½ of those in the GREEN section!In other cases, brokers will have tickets in their inventory that have a face value of $0.00, or $1.00, and yet in all likelihood these were purchased for hundreds or even thousands of dollars, possibly, for instance, through a sponsorship or other marketing affiliation.
While a ticket broker is often aware of the face value, a greater concern in our business is the amount paid for the ticket, which in the vast majority of cases is NOT the face value of the ticket.In some cases blocks of tickets for multiple shows are purchased knowing that some tickets will be very valuable on the secondary market, while others have very little value, so even the per ticket price becomes obscured.One thing however does remain constant; which is that tickets on the secondary market are always sold at the going market rate.On occasion this can mean less than the face value (ie. Leafs pre-season games, occasional last minute deals where inventory is over capacity).
When dealing with a ticket broker, it’s important to deal with a reputable firm.Look for a company that is a member of the Canadian Ticket Brokers Association (CTBA www.ctba.ca) or the National Association of Ticket Brokers (NATB www.natb.org) so that you’re assured of certain ethical standards.Better yet, go one step further and deal with a broker like Tickets of Canada, a proud founding member of the CTBA and a company that takes pride in its ability to service clients like no other, while dedicating a substantial amount of their resources to community and charitable efforts.
A good ticket broker works for you, helping create great event experiences and indelible memories.
Having worked in the ticket resale industry for 5 years now, I have become almost completely desensitized to the discrepancy found between the face value printed on a given event ticket, and the market value for that very same ticket, when it is resold on the secondary market.
That said, the frequency of queries our office fields about "the face value" from customers is a constant reminder that people are very much concerned about the mark-up brokers charge on their tickets. Generally there is a correlation between the face value of a ticket and the market value when it is resold, but there are many instances where the face value is obviously irrelevant, and in the remainder of cases it is at least practically irrelevant. The market value is the price the market will bear; how much the customer is willing to pay, and if that's ten-times the face value or one-tenth the face value, it really makes no difference. Where it does make a difference is within the psyche of the consumer. Nobody wants to feel ripped off, and we all (or most of us) enjoy getting a deal. If we score a coveted pair of Toronto Maple Leafs tickets at below face value, well - we're likely to brag to our friends about it. Conversely, if we pay 5 times the face value, then we're liable to harbour bitter feelings towards those "damn scalpers", possibly suffer from buyer's remorse, and generally feel like we got ripped off.
You'd be hard pressed to find another retail business where the consumer concerns themselves so much with the cost of the product being sold, as we find in the realm of ticketing. I like to use the example of buying a pair of underwear at Sears, or The Bay, where you're likely to spend $20 or more on a decent pair of brief's that cost what, $3, maybe as much as $5? The mark-up or gross margin in most retail operations is much higher than what you'll find at your standard ticket resale operation, but the fact that the product cost is unknown elsewhere and very obvious with tickets, creates this hyper-awareness of consumers on our alleged profits. The reality of course is very different, as we will delve into later in this dissertation.
People too are very emotional about their tickets, and our industry, while a multi-billion dollar one, is still a grey market at best in many people's minds. Even while primary ticket sellers like Ticketmaster now own ticketing resale businesses (ie. TicketsNow), and primary market franchises have affiliations with other secondary market ticketing businesses, such as Major League Baseball's affiliation with StubHub. Most legitimate ticket brokers have evolved from their days of hawking tickets on the street, into sophisticated operations employing university grads, and paying their taxes. We take credit cards, provide invoices, and contribute in meaningful ways in our communities, and yet we still can't shake the stigma of being a "ticket scalper".
There are some good concrete examples of where the face value is obviously irrelevant, and one of these is when tickets have a face value of $0.00 or $xx.xx. In my experience, these tickets are often premium of VIP type tickets, and their cost is anything but $0! They often come with expensive club memberships (ie. Chairman's Suite tickets at the ACC), or costly subscriptions (ie. VIP membership at Molson Amphitheatre), or from big dollar marketing affiliations (ie. you buy a Super Bowl ad for $2,000,000 and you get a couple of free tickets to the game). In all of these cases a broker has paid an infinite amount over the "face value" and the consumer is also paying an infinite amount over face value, but their infinite amount will likely have a bit of profit built in for the reseller!
There are also cases where the exact same tickets for the exact same event have different face values. Consider buying Toronto Maple Leafs tickets from TicketMaster, where the price of a "Purple category" ticket (something in row 12 or higher in the upper level) will come in at nearly $80/ticket, while the face value that is printed on a season ticket holder's ticket will be closer to $50. Using the same example with the Toronto Maple Leafs, the matter is further complicated because the season ticket holder's invoice cost, or actual price, is normally less than the amount printed on their tickets. This discrepancy between the face value printed on a season seat holder's ticket and one bought from the box office is even more pronounced for certain events, like MLB baseball, where the discount given for buying a full season (80+ games) is very hefty in certain markets. So the box office window price could be double that of the exact same seating locale of a season ticket holder's seat. So what is the "face value" really?
One of the rational reasons that ticket brokers exist is thanks to gaps between price pints from primary sellers. If you consider the Air Canada Centre seating chart below (Exhibit 1.), you can tell that certain sections are in a more preferential location to the stage than others. For example you would probably prefer to sit in Sec 109, than Sec 107. And if you were sitting in Sec 109, you would mostly likely want to sit lower down in that section, say in the first 10 rows or so. The market value of an event ticket is very much depenedent on these seeminly miniscule variations in seating quality, and it's just not possible for a primary seller, whom is very "volume oriented", to have hundreds of price variations for a given event. So they may price seats in Sec 107-109 and 118 - 120 at a premium price point, and then seats in 101-106 and 121 & 122 at a different price point, with seats behind the stage 110-117 at a 3rd price point, and then maybe the upper level has 2 or 3 of its own price points. If we consider the sections noted above, and you have a ticket in Sec 106, Row 1, and it is on the aisle of Sec 107, would you prefer to sit there for $200, or in Sec 107 Row 28 on the aisle of 106 for $200? Most people would pick the seat in row 1, and yet that ticket might have a face value of 1/2 that of the seats in Sec 107 Row 28.
Exhibit 1.
For a few more examples, using the Toronto Maple Leafs and their ticket pricing metrics, please see my ariticle entitled, Secondary Ticket Market 101.
On the secondary market, it is estimated that 40% of tickets are sold below face value (G. Adler, NATB) and any broker who has been stuck with very high priced inventory that they cannot sell at even 1/2 of face value knows how frustrating it is to hear only complaints from very high demand events. If you consider that the face value on Montreal Canadiens vs. Toronto Maple Leafs tickets on a coveted Saturday night, is the exact same for a pre-season match up vs. a lackluster opponent on a Tuesday, you can see how the face value seems pretty irrelevant; most of the time - to us. To me, it is the most perfect real life example I have seen of "the market" in action: its perfection is a function of many variables, the opponent, the day of the week, the seating location, the limited supply, and the expiring nature of the product. It works for the broker when events "go big" and it knocks the wind out of the sales when an event "tanks".
Just about time for a Timmy's - I wonder what that cup of coffee costs? Ahhhh... it doesn't matter, I'm willing to pay my $1.35, and just Face... The Facts.
