The intersection of supply and demand is perhaps one of the most basic elements of economic theory, and for disappointed Swifties, now likely a concept that they’ll remember all too well. When legions of fans armed with presale codes for Taylor Swift’s first concert in years descended on Ticketmaster only to find that their codes did not actually entitle them to a ticket, or in some cases even a spot in line, it’s probably safe to say that many were so mad they could cry. Signs that trouble was imminent came early as error messages popped up on screens across the country, causing some fans to see burning red. Sales were temporarily paused as Ticketmaster struggled to keep up with demand and an announcement from Ticketmaster that general public ticket sales would be cancelled altogether was swiftly met with outrage as distraught fans began to see their chances of seeing Taylor Swift live be a moment lost in time.
Ticketmaster’s statement that fans needed to calm down because demand for tickets was unprecedented and complicated by bots did little to appease unhappy Swifties unable to shake it off. In fact, the statement was perceived by some as little more than a ‘you’re on your own, kid’ message rather than an apology and a promise to do better in the future. Now, politicians have entered the fray, raising questions about Ticketmaster’s power in the market and whether there should be more competition. Ticketmaster is the ticketing arm of Live Nation Entertainment, an entity that was created when Ticketmaster merged with Live Nation, a concert promoter. During the brief time that tickets were available, more than two million were snapped up, some of which are now appearing on ticket resale sites at hugely inflated prices. With its reputation in tatters, Ticketmaster is now facing possible intervention by the Justice Department. Such a move could be a positive for future concert goers, but many Taylor Swift fans might just prefer to rewind the tape and get a chance to see her live.
Discussion Questions:
- Discuss the concept of supply and demand as it relates to Taylor Swift. In a typical situation, when demand is strong, supply increases to meet demand. Why might that premise not hold in this situation?
- Some disappointed fans are now turning to ticket resale sites where prices are many times the original ticket face value. Explain the link between supply, demand, and price.
- Does Ticketmaster have a monopoly on tickets sales for major concerts and other events? Would it have mattered in this situation if the playing field were more competitive? Should Live Nation Entertainment be broken up? What barriers to entry do potential competitors face?
Sources| ABC News: Taylor Swift tickets breakdown probed by attorneys general; Newsweek: Most Overdramatic Fan Reactions to Taylor Swift Ticket Mess: ‘My 9/11’; CNET: Taylor Swift Calls Ticketmaster Chaos ‘Excruciating’: Lessons From the Mess; CNBC: Ticketmaster’s largest shareholder blames massive demand ? including from bots ? for Taylor Swift ticket fiasco; NY Times: Senate Announces Hearing After Chaos Over Taylor Swift Ticket Sales; Unsplash: Phone with device