9:57am.

The laptop’s open, the iPad is balancing on one knee and your iPhone moistened with the anticipation of buying tickets to your favorite event is clutched in your hand, watching the clock strike 10:00am. Ok, it’s on.

SOLD OUT! You try again, but there’s nothing. And again and again and again. Ziltch! Not a single ticket. How can a 20,000+ capacity venue sell out in second? Or is there a more sinister plot below the surface?

You’re probably clenching your fist at a fictitious caricature of a greasy ponytailed scalper with the obligatory over-sized Hawaiian shirt who weaseled the system with automated bots, making it impossible for the average fan to pick up a measly pair.

While a small portion of brokers do engage in the malpractice to game the system, anyone familiar with the dance knows that only a small portion of face value tickets are carved out for public consumption during the on sale. But where do they go?

A leaked manifest from a Taylor Swift concert in Nashville showed only 1,600 of the available 13,300 tickets actually went on sale to the public. And it’s no coincidence that Live Nation is facing consumer fraud class action lawsuits that allege they illegally withheld tickets to five Bruce Springsteen concerts in New Jersey in 2012.

In fact, One Direction’s Where We Are Tour went on sale almost 10 months ago, sold out almost every ticket in every stadium, yet weeks before their tour kicked off this summer there were randomly entire sections of new inventory available on Ticketmaster.com. There was more inventory available the week of the shows then went on sale to the public last Christmas.

(blue dots are available seats)

OneDirectionDrops

The industry jargon for a once sold-out show that suddenly has prime inventory available is called a “drop”. And it happens more often than you think.

On the surface, what’s the problem with releasing tickets for face value? Only until you understand where this mystery inventory comes from, can you understand the true crime.

Primary ticket companies like Ticketmaster are in bed with the teams, artists, venues and promoters, and make it a priority to carve out the prime seat locations from the pool of inventory released for a specific event. That means you never had a chance of getting those tickets, even if you were customer #1 in line the second they went on sale. Instead, they’re manufacturing artificial demand by limiting the supply to only the scraps they’re desperate to get rid of, creating false urgency and the increased likelihood of a “sell-out.” Those prime seats are then sold through blurred primary / secondary channels as VIP Packages, Official Platinum Seats, Ticketsnow, TM+, or other marketplaces at what they speculate as the highest market value. Simply put, your favorite teams artists and venues are scalping you their best tickets.

Fun fact: Justin Bieber is rumored to have brought in an additional $10M on his Believe Tour by carving out a direct-to-consumer premium ticket channel. Wanted to sit up close for this summer’s Beyonce & Jay-Z’s “On The Run” tour? The power couple was selling tickets in the first five rows for $3K. Bruno Mars, Miley Cyrus, Justin Timberlake, One Direction, Linkin Park, Elton John, Arcade Fire, Billy Joel, Eminem and Rihanna, the list of Summer 2014 touring that scalped tickets is endless.

And if they can’t fetch the big bucks for the prime real estate, or demand just isn’t there, they have a back up plan. Simply release the unsold tickets back to the public just before the show, leveraging the frantic last minute buyers or box office walk up demand. “Drops.”

So is a show really ever really sold out? Depends who you ask. At least you know why you’re not pulling great seats at the onsale.

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