How could the system for live event ticketing be improved?

Buying tickets for big music events like the Oasis reunion or Taylor Swift’s Eras tour is a hassle. That’s because fixed supply and fixed price are incompatible. Improvements to the system could be made – perhaps by using a ballot or flexible pricing, as airlines do – but nothing is perfect.

‘I was in the online queue for five hours, and then it turned out the tickets had tripled in price from the original price on the site – I had to make a decision within seconds as to whether to buy.’

This is a typical enraged Oasis fan’s response to the recent ticketing row involving the Gallaghers’ 2025 reunion concerts. But it is only the latest such event to attract fan anger: Taylor Swift’s Eras tour was another recent example.

Why is it that ticket buying is such a hassle? Especially when you might think that ticket sellers would want to make the process quick and painless, like making a purchase with an online retailer such as Amazon.

Understanding something about the economics of the music industry (and to some extent sporting events too) suggests a number of reasons. At the same time, this understanding also leads to a realisation that perfecting the system is no easy matter.

Imagine for the moment that you are an event promoter. You have won the right to promote the event – possibly in the face of competing promoters’ bids – by earmarking venues, agreeing to their charges and the substantial fees of the artist(s), and having contracts with ticketing agencies, among others.

You face substantial risk having made all these agreements and signed contracts. Indeed, the level of risk may depend on the artist – perhaps limited with Taylor Swift; but maybe more with Oasis if there is sudden friction between the brothers; and possibly enormous if one of the Rolling Stones is medically advised not to tour.

Other lower-level risks come from being unable to sell out the venues booked. That might happen, for example, if a once-popular boy band is unknown to today’s teenagers and previous fans now have substantial household responsibilities.

So, the promoter will want to create hype. They will want to bring in money as quickly as possible, in order to defray their expenses as they organise the tour. Hence, they will announce the event long before it is actually scheduled to take place.

Just as when you get a party invitation, you want to have a good time and you want other people to be there, the promoter will want – and need in financial terms – to have a crowded venue and a successful sell-out tour.

The artist(s) will also want a lively atmosphere, to fill the venue with happy fans screaming for more (particularly if the artist is on a downward spiral and wants an ego boost).

But the first key economic feature is that risk lies almost entirely with the promoter.

All the ingredients are there for big problems to arise. Fans are warned that demand will be heavy, the event is likely to sell out, tickets go on sale at 9am on a particular Thursday, etc. At 8:59am, thousands of people have their fingers poised over laptops, tablets and phones, credit cards at their side.

Of course there is a delay, they wait in a queue, despite the efficiency of ticket company systems. If they get through, they will need to make a very swift decision to buy.

Some of the people in the queue will be experienced buyers; some will have little experience and will be buying for a teenager; some, frankly, will be bad actors (people or bots) buying in the hope of selling on via the secondary market at an inflated price.

The secondary market will start up immediately, and the less experienced may be drawn to secondary sites through a Google search. Some will be unlucky; some will experience regret at paying a high price perhaps on a secondary site; and a few will fall victim to scams.

It is important to recognise that it is a minority of events where this occurs. Many tickets are easily available and remain available until much nearer to the event. I personally attended two concerts in an outdoor venue of a few thousand people in July 2024 by well-known but not really high-end artists, one set of concert tickets bought several months in advance, the other bought much nearer to time.

A tell-tale sign of weak demand is that advertisements for the event continue appearing many times over the preceding weeks. Another sign is that prices on secondary sites fall below the original price – this does happen.

But back to the top, it’s time for some more economics. A set of dates and venues has been announced, so supply is, or appears to be, fixed. A price or set of prices has been set.

As every economist, and many others, know you cannot fix both supply and price and hope to get it just right, in this or any other market. Either there is excess demand or too little demand compared with the fixed availability.

If there is too little demand, the promoter makes a loss, and tickets may well appear on secondary markets at a discount. Extreme measures might be taken, like curtaining off part of the venue so it appears fuller than it is.

You might ask, why doesn’t this happen with buying an airline ticket? The planes are always nearly full, but there are usually seats available much nearer the time of the flight. The answer is that airlines have enormous quantities of data. They know that what happened in the past is likely to happen in the future, barring unusual one-off events such as the Covid-19 pandemic.

Individual randomness can lead to persistent statistical patterns in a population, as in Brownian motion, where random movement of small particles in a fluid can be described mathematically and so, as a whole, become predictable. Some days and some flights will be more popular than others. Airlines also know that demand elasticities – the extent to which people will change their behaviour and choices in response to price changes – vary in fairly predictable ways.

As a result, they create buckets of seats at different price points. For more popular times, there will be very few cheap seats. Similarly, the cheapest night to stay at a hotel is a Sunday because this is when there is least demand, and proprietors want to attract custom. Again, they have considerable banks of data and demand is much less fickle than for particular musical artists.

I’ve spent a long time outlining the problem, but what is the solution? In fact, economics suggests three solutions.

First, make supply more flexible. Actually, this is often the plan, although seldom announced in advance. If it looks like there is substantial excess demand given the announced schedule, additional dates are added – we saw this with Oasis. The promoter will have booked options at the venues, gaps in the programme and agreements with the artist(s).

Second, apply flexible pricing, as airlines do. This will choke off demand – some people will not be willing to pay £400, whereas they would have been willing to pay £135.

Third, hold a ballot – set a price and make it clear that if there is 50% excess demand say, only two out of every three applications will get tickets. This approach is often used for big sporting events, like the Olympics. This also artificially chokes off demand.

To be clear, none of these solutions is problem-free. A fully-developed but possibly unannounced venue plan risks substantially underfilling the event space as a whole, leading to losses for the promoter and possibly others.

On the other hand, taking out options on space potentially leads to some upside for the promoter but perhaps chagrin for the fan who bought an expensive ticket only to see lower-priced ones on sale later.

Flexible pricing appeals to artists, promoters and ticket sellers. But fans may see it as unfair. This approach also has the potential of reducing the role of ticket touts, particularly if tickets are related in some way to ID and if this is checked at the venue. Often a weak point is security at the venue in the face of thronging crowds wanting to get in quickly, if only to sample the gassy lager and greasy food on offer.

The important thing is that ticket purchasers should be made fully aware at the start that prices are flexible, rather than being faced with the news only at the last moment. Indeed, this is something that the Competition and Markets Authority (CMA) is currently investigating.

The ballot is good for consumers who are successful. But if it is to work, it must be clear that the odds of getting a ticket depend on how many people sign up relative to the number of places available. In other words, the odds of getting a ticket are fixed only when all applications have been made.

But a ballot provides no benefit to the artist or promoter. It also has the potential to increase the role of the secondary market, whereby those who are successful, maybe getting four tickets when they only actually wanted two, sell the other two on through a secondary platform.

More seriously, ticket touts may create a false demand, putting in a large number of applications using a variety of identities, in order to secure tickets to sell. Of course, money going to the secondary market potentially would be captured by the primary market if flexible pricing is used.

It is often asked: can’t the secondary market be eliminated by disallowing sales at more than a small percentage above face value? There are two problems here.

First what constitutes face value, given the industry’s tendency to use a range of rather opaque fees to inflate the ticket price? And second, despite the law, many buyers flout it, ignoring the various regulations around secondary pricing. If they turn out to be based in Russia, say, or if it is actually unclear where they are based, prosecution is naturally difficult.

Indeed, the nature of the industry means that completely unscrupulous individuals may sell what purport to be tickets that turn out to be useless. This often does not become apparent until some months after the tickets are sold, when the purchaser attempts to access the event.

Also, there is a legitimate purpose to a well-organised and ethical secondary seller, facilitating transfers between purchasers who, for one reason or another, now cannot attend the event and people who would like to attend but were unsuccessful initially.

So, the system can be improved, by one means or another, but no possible improvement is perfect. The fundamental problem is the iron law of fixed supply and fixed price being incompatible.

Go and see someone a little less famous or less currently fashionable, and you will get a much better ticketing experience. Most acts don’t sell out.