Bob Lefsetz: Hannah Montana Ain’t That Big

Authored by Scott Goldberg on October 8, 2007 - 11:17am.

Hannah Montana is Currently Playing a Sold Out 54-Show Tour

In a post from The Lefsetz Letter today, Bob discusses the artificial hype surrounding Hannah Montana and the Miley Cyrus 54-show concert tour. He argues that the ticket brokers have changed the game, now creating a fake shortage of tickets that raises the value of available seats on broker sites. Remember, online brokers like StubHub make money on the price of the sale, so the more a ticket goes for, the more they get paid; and hence, it would make sense for them to create artificially inflated prices.

Take the poll: Is Hannah Montana all hype and no substance?

Here’s an excerpt from Bob’s post:

“I believe the reason you can't get a ticket to Hannah Montana is because of the sophistication of ticket brokers. Along with the very few tickets available for each gig.

“Did you check the stats?

“According to The New York Times, in Kansas City, and this is the TicketMaster lawyer speaking, they only had 4,200 of the 11,000 seats available! Oh, the arena holds 11,000, but only 8,400 tickets were for sale. Where the hell did 2,600 seats GO? They're not holdbacks for staging, they're insider tickets, held back by the venue, the act, the... The other 4,200 went to the fan club... And, it seems the ticket brokers scarfed up ALL of the available seats.

“There's an artificial shortage here. With incredibly sophisticated software, the brokers with the bots can buy up ALL the seats. They figure it's gonna sell out anyway, based on the HYPE!

“Demand doesn't justify these prices. It's just that the audience, and in this case it's the parents, they're paying, not the kids, haven't gone to a concert in recent memory, or, if they have, have paid though the roof to see the stars of THEIR youth, and they think these prices are real. They're not real. Hannah Montana ain't THAT big.

“This is the brokers' business. The spread. They're not amateurs, buying an extra ticket to finance their seats, they're trying to make a living! They figured this was like shooting fish in a barrel. If they got ALL the tickets, fans would have to come to THEM!

“Some parents are going to be stupid enough to pay these inflated prices. But if they can only wait until the time of the gig, prices are going to come WAY down. Ever been to an arena? How many good seats are there? 750? Certainly no more than a couple thousand. The rest give you the privilege of BEING THERE! Inside the building. So you can tell your buddies. Front row seats always go for a premium. But the nosebleeds?

“There will be seats available. And the real loser won't be the ticket brokers, but the concert business itself. The brokers will just take less of the anticipated spread. The industry will have to fight off the law. Yes, attorneys general want to know HOW DID THIS HAPPEN? How did the concert industry get so out of control?”

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Comments

Hannah Montana is real

Submitted by anonymous (not verified) on October 9, 2007 - 8:56am.

Hannah Montana is not all hype. It is actually the biggest concert series from a broker perspective in probably five years. Demand is far outweighing supply for these shows in just about every single market---whether it be in a market with a lot of money (NYC), or a traditionally slow concert market (like Minnesota ). This concert series is booming. It is true that 7 times out of 10, the price of an event will go down as the day approaches. But for the other 30%, the prices can skyrocket and you will be left without a ticket. Why is it OK for all secondary markets to use the laws of supply and demand, including real estate, the stock market, etc.? Why is the ticket industry any different? Bots and other ticket software programs are questionable unethical behaivors and the consumer needs to be protected- I agree. But the basic premise of supply and demand still needs to apply.