Want to see Jay-Z on his 4:44 tour? It shouldn’t be difficult — presale tickets have been trading below face value all week on sites like StubHub with the price expected to drop further as the tour begins.
It’s not just Jay-Z that’s seeing low resale prices. Tickets for top-tiered acts like Katy Perry, Metallica and Justin Bieber are all trading at or below face value, despite relatively high demand from consumers, positive album reviews and strong sales.
“There’s certainly a saturation in the market with a ton of festivals and concerts and a lot of Beyonce and Jay-Z shows in the last few years,” explained Jesse Lawrence with TicketIQ, a marketplace and pricing app for resale. “Pricing is much more efficient than it’s been in the past and music is becoming a harder business to make money on,” with many brokers shifting into sports, which is generally a more predictable market, he said.
Others point to changes in how brokers are procuring tickets, using automated secondary ticket purchasing and pricing software, which encourages brokers to hold longer and compete for price floors. Automated software is not necessarily the same as using outlawed bots, which illegally try to circumvent Ticketmaster safeguards. Automated purchasing just automates the buying process.
“The Jay-Z presale started Monday and tickets started popping up on the secondaries in low volume, trading below face value,” explained Patrick Ryan with ticket pricing and distribution company Eventellect. He said he believed that the low resale prices “were not a reflection of demand, but a reflection that brokers don’t want to hold inventory very long.”
Ryan explained that many brokers are using algorithmic pricing software that’s trying to move tickets before the general on-sale (which takes place today). Couple that with a ton of concert traffic this summer and a move by firms like Ticketmaster to use Verified Fan to thwart scalping, and the result is downward pressure on pricing and low margins for resellers.
“A lot of guys buy these tickets to make $5 to $10 and collect the credit card points,” Ryan tells Amplify. “People are assuming brokers are making money, that’s just not the case.”
Most brokers agree that automation is probably driving down the price of tickets, although a few have interesting theories on Jay-Z. Twitter user @Don_Shano, a broker who uses an anonymous handle, tells Amplify that prices were low because most brokers were attending the National Ticket Brokers Association and TicketSummit conferences and forgot to make adjustments to their algorithms.
“Basically no one knew about the Jay Z presales this week because everyone is in Vegas,” he told us in a Twitter message. “The bots were on it and instead of snapping them up and pricing high until at least tomorrow when there is traffic during the regular sale, they all set their pricing tools to battle each other to the floor, in this case, nearly face value in most cities.”
Don’t expect prices to go back up, Lawrence said, who added that after today’s on-sale, resale prices will dip again.
“I think it could go down another 20 percent,” he said. “Like most tours, the price of his tickets will drop as we get further away from the on-sale.”