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Taylor Swift wants her money back
The superstar tightens the way her concert tickets are sold—and scalpers aren’t happy.
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This file photo taken on October 21, 2016 shows singer-songwriter Taylor Swift performs her only full concert of 2016 during the Formula 1 United States Grand Prix at Circuit of The Americas in Austin, Texas. (AFP/Suzanne Cordeiro)
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aylor Swift’s most recent tour was a success by every measure. Named after the best-selling album of her career, 1989, it grossed more than $250 million worldwide, the top tour of 2015. Critics raved about the production, with one going so far as to say it was “engineered to be the best night of your life.” Yet Swift felt something was missing—about $85 million in revenue that went to scalpers.
Some 30 percent to 40 percent of tickets to the world’s top concerts are resold on secondary websites such as StubHub and SeatGeek. Many of those sales are by scalpers who believe people are willing to pay far more than the initial price to see stars of Swift’s magnitude; they double and sometimes triple the ticket price. Thousands of Swift’s die-hard fans, Swifties, spent huge sums the singer never saw. That didn’t sit well with Swift, who is as much an entrepreneur as she is an artist.
As she prepared to hit the road to support her latest album, Reputation, Swift and Ticketmaster Entertainment Inc. concocted a strategy to neuter the scalpers. They used Ticketmaster’s Verified Fanprogram, which utilizes in-house technology to identify actual fans and determine which of them should have access to fan-only presale tickets, based on their devotion to Swift as measured by their willingness to buy albums, sign up for a newsletter, and watch her music videos. While prices in the presale were fairly low for most people, Swift and promoter AEG Presents raised the cost of all the tickets in the later general sale to make them less attractive to scalpers.
The success of this latest attempt to combat scalping remains uncertain. Most major tours, including Swift’s most recent, sell out in minutes. But her upcoming Reputation tour hasn’t sold out a single date in the past month and a half, prompting the New York Post to dub it a disaster. Yet Ticketmaster says Swift will get the last laugh. Most tours sell out right away because prices are too low, and scalpers buy up all the inventory. Instead, Ticketmaster expects Swift’s tour will sell out closer to when she takes the stage on May 8 in Glendale, Ariz., the first of more than 40 dates scheduled through October. It also expects the artist and promoters to collect more of the cash—and provide the music industry with a new model to boost North American concert ticket sales, which collectively hit $8 billion last year.
Read also: Taylor Swift to launch own social media app ‘The Swift Life’
“It’s so easy for people to take shots at Taylor,” says David Marcus, head of music at Ticketmaster. But, he says, “we were successful beyond my expectations and were able to drive the biggest registration we’ve ever seen for Verified Fan.”
Ticketmaster has used the Verified Fan program to block scalpers from concerts, festivals, and Broadway shows such as Springsteen on Broadway and the upcoming Harry Potter and the Cursed Child. The company requires fans seeking tickets to register online in advance and identify the show they want to attend, hoping to weed out bots. It then uses artificial intelligence to determine which fans are most likely to attend and verifies a certain number for a presale.
Swift’s use of Verified Fan added tweaks not tried before, Marcus says. Fans who wanted access to the first tickets on sale took part in a program called Taylor Swift Tix where they earned boosts in the virtual line by buying her album and merchandise, watching music videos, or spreading the word to friends. Javier Benavente, a 25-year-old Swiftie who’s seen the pop star more than a dozen times, bought three albums and scored floor seats for $180 a pop. The new regular-price tickets can run as much as 10 times that.
What’s more, Benavente says he loved being able to take his time deciding on his seat, because of the Swift tour’s unusual assigned purchase windows—spread across a week and giving purchasers several minutes to view different available seats before making a decision. “She somehow found this weird happy medium where you benefit both the fans and their pockets,” he says.
Some critics have called Swift greedy, panning her system as giving the best presale slots to fans who spend the most on her other goods. Ticketmaster says most of the fans who participated in the presale spent no money apart from the ticket purchase and noted those early sales started at $49.50—cheap for a star of Swift’s stature. While tickets in the general sale can climb to near $2,000 for some shows, the prices aren’t so different from those of male acts such as Justin Timberlake or U2. If some higher prices are what’s needed to combat scalping, the Swift camp is unapologetic. Says Marcus: “Taylor is trying to take control of her tour.”
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BOTTOM LINE - For Taylor Swift’s upcoming concerts, she’s trying a fan-centered pricing scheme to capture some of the $85 million lost to scalpers in 2015.
