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.
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