Planet Money
3:19 pm
Thu June 27, 2013

Kid Rock Takes On The Scalpers

Originally published on Thu June 27, 2013 4:46 pm

Kid Rock is tired of scalpers taking tickets away from his biggest fans.

One way to stop that: Raise ticket prices. If Kid Rock charged more for his tickets, scalpers wouldn't be able to sell them at such a big markup.

But Kid Rock doesn't want to raise prices.

"I don't want to break you by coming to see me, " he says. "I want to make as much money as I can, but I don't need to drive around in a tinted down Rolls-Royce or Maybach and hide from people because I felt like I ripped them off."

Kid Rock wants his tickets to be affordable, and he's lowered his prices. On his latest tour, you can get a ticket for $20 (plus $9.25 in fees). It sounds great — but he knows a fan-friendly ticket price is appealing to scalpers too.

"My tickets are cheap. That's right. That's why the secondary market would work," he says.

So Kid Rock's got a couple tricks up his sleeve to keep tickets out of the hands of scalpers:

1) More shows. For scalpers to make money, there needs to be more demand than supply. Kid Rock's upping the supply by doing more shows. He is doing eight nights in Detroit alone.

2) Beat the scalpers at their own game. Scalpers want the best seats in the house. Kid Rock's raised the prices on these, and he and the folks at Ticketmaster are constantly adjusting prices based on what they see happening in the secondary market.

3) Go paperless. To sit in these really good seats, the pricey platinum seats, you have to show ID and the credit card you bought them with at the venue.

4) Don't sell the first two rows. Kid Rock and his team are reserving the first two rows for die-hard fans only. No matter how much money you've got, you can't buy your way into them.

"They are not for sale, " Kid Rock says. "I'm tired of seeing the old rich guy in the front row with the hot girlfriend. And the hot girlfriend, you know, with her boobs hanging out,with her beer in the air, just screaming the whole time. The old rich guy is standing there like he could[n't] care less. It's a very common theme at Kid Rock concerts."

Being able to keep tickets cheap isn't just a good deal for the fans. It's a good deal for Kid Rock, too. On his current tour, he gets a cut of all the beer and merchandise sold inside the venue. Cheaper ticket prices mean fans will have more money to spend on this other stuff.

"If you give people a fair price, I think they'll feel better about spending their money," Kid Rock says. "They might spend just as much because they don't feel like someone is trying to get one over on them."

So is it working? Jared Smith of Ticketmaster North America says there's an unusual way to tell. In this case, a show that isn't totally sold out is actually a good sign.

"If you underprice all your inventory at the time the tickets go on sale, there is a huge incentive for other people, who are buying with the intention to resell, to gobble up as many as they can as quickly as they can, " says Smith. "If you get closer to market-based pricing, it slows down that incentive... I think the fact there are still a few tickets out there in some premium places is indicative ... that we are closer to market-based pricing."

For more, listen to our latest podcast: Episode 468: Kid Rock Vs. The Scalpers.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

JOEL ROSE, BYLINE: Throughout the business world, people are obsessed with making sure the price is right, that supply matches demand. But there is an entire industry that routinely gets it wrong, sometimes on purpose: The concert industry.

Caitlin Kenney, of our Planet Money team, reports on ticket scalping and one expert's campaign to curtail it.

CAITLIN KENNEY, BYLINE: I will let the ticketing expert introduce himself.

(SOUNDBITE OF SONG, "BAWITDABA")

KID ROCK: (Singing) My name is Kiiiiiiiid...

KENNEY: Well, that's how he used to introduce himself. These days, it's more like this.

ROCK: You can call me Kid Rock, Bobby, whatever you want.

KENNEY: Robert James Ritchie, better known as Kid Rock, he got famous back in the late 1990s for combining rock and rap. These days, his music has more of a country sound. And it's always bugged him that scalpers were out there reselling his tickets for more money.

ROCK: They're taking the best tickets from the biggest fans. That's what's happening.

KENNEY: It's not just Kid Rock and his fans' problem, you see it everywhere in the concert industry. For example, take Sandra Hamm(ph) - a huge Taylor Swift fan. Sandra wanted to see Taylor Swift in Texas last month. Her husband tried to get her the tickets as a present.

SANDRA HAMM: They went on sale and he told me he was waiting at his computer but he said as soon as he clicked on it, they were gone. He couldn't do anything.

KENNEY: Some luckier fans had gotten tickets but scalpers had gobbled up the rest. Sandra and her husband ended up paying a scalper online $500 for two tickets, more than twice their face value. But Sandra says she was fine with that.

HAMM: I didn't even think about the cost because it was so much fun. In fact, I would probably spend that same amount, if not a little bit more, again.

KENNEY: What this means is that Taylor Swift underpriced her tickets. One of her fans would have paid her twice as much to come to her concert. And Taylor, she just left that money on the table for somebody else to scoop it up.

The problem is good intentions. A lot of artists worry about making tickets affordable for their fans. Kid Rock is one of them. You can get a ticket to his current tour for $20.

ROCK: I don't want to break you by coming to see me. I want to make as much money as I can. But I don't need to drive around in a tinted down Rolls Royce or Maybach and hide from people, because I felt like I ripped them off.

(LAUGHTER)

ROCK: Madonna, Rolling Stones - I mean, come on.

KENNEY: Does it worry you though that the reason scalpers...

ROCK: Because my tickets are cheap, right. That's why the secondary market would work.

KENNEY: So that's the conundrum. Artists want to keep tickets cheap for fans but the cheaper you make them, the more likely it is some scalper will just come along and buy low and sell high. Fans are still playing a lot of money just not to the artist. One obvious solution is just give in - price the tickets at the market rate, at the rate you're fans are paying the scalpers.

But there's a danger associated with that. It has to do with the complicated psychology of fans and their relationship to musicians. Remember Sandra Hamm, who paid 250 each for Taylor Swift tickets? She says if Taylor herself had wanted to charge her that much...

HAMM: If I saw it on her website for 250, I don't think - I would think-that was crazy. It just seems like so much money to go to a concert. And it's - I mean, I know she's so popular, but it's just Taylor Swift.

(LAUGHTER)

KENNEY: But you paid it, so it's probably worth it.

HAMM: I know.

(LAUGHTER)

HAMM: It was worth it but I think it was the concept that you buy a scalped ticket for more than it's worth.

KENNEY: When a scalper does it, it feels like business. When Taylor Swift does it, it feels like a betrayal.

So if you're that artist, how do you keep your tickets cheap and keep them out of the hands of the scalpers? Kid Rock, it turns out, thinks a lot about this and he's come up with a couple of solutions. First of all, for scalpers to make money there needs to be more demand than supply. So Kid Rock is upping the supply - doing more shows, eight shows in Detroit alone.

Another solution, for the best seats he's raising the price, making them Ticketmaster platinum seats, but he's making them paperless, so they're harder to scalp. You've got to show an ID and the credit card you bought them to get in. And if you really want to sit close to the stage, you have to be a true fan. Kid Rock's people are searching out the most diehard fans and giving them the front row seats. No longer can you pay your way to the front of the stage just to impress your date.

ROCK: The first two rows you can't buy a ticket to at all. They're not for sale, because I'm tired of seeing the old, rich guy in the front row with the hot girlfriend. And the hot girlfriend, you know, with her boobs hanging out, with her beer in the air, just screaming the whole time. And the old, rich guy standing there like he could care less.

(LAUGHTER)

ROCK: It's a very common theme at Kid Rock concerts - probably most people's concerts.

(LAUGHTER)

KENNEY: Keeping tickets cheap isn't just for the fans. There's something in this for Kid Rock, as well. He gets a cut of all the merchandise and all the beer that's sold his concerts.

ROCK: If you give people a fair price, I think they'll feel a little better about spending their money. And they might, you know, they might drink some more beer, or they might buy two T-shirts, they might spend as much just because they don't feel like someone is trying to get one over on them. And I'm going to make money off it and I'm screaming as this other artists - I'm going to make money.

You know what I mean? And I'm happy to discuss it with any of you at any time.

KENNEY: Mick Jagger, Kid Rock says to call him.

Caitlin Kenney, NPR News. Transcript provided by NPR, Copyright NPR.

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