Kid Rock’s $20 Concert Ticket Plan: Good for Fans, Bad for Scalpers

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At first glance, Kid Rock’s “$20 Best Night Ever” tour seems ripe for exploitation by scalpers. It’s not hard to imagine entrepreneurs scooping up loads of tickets for $20 apiece, and then selling them for triple or quadruple face value—at which point, they’d still be cheaper than the average concert ticket.

This spring, Kid Rock announced a summer concert series with a very unorthodox—and very fan-friendly—ticket pricing structure. Like the name indicates, the “$20 Best Night Ever” tour prices the vast majority of tickets at $20. “Someone has to go out there and fight these high prices and change things up, and I’m lucky enough that I can afford to take a pay cut. $20. Best night ever,” read a statement from Kid Rock when the tour was announced.

By purchasing tickets at Walmart, fans can even avoid parking and service charges. Prices for concert T-shirts, beer, and food at the shows are also being kept low—$20 shirts, $4 draft beers—with the hope that fans will purchase more because they won’t feel ripped off. (A similar strategy is being employed by a few Major League Baseball teams this year, including the Cleveland Indians, which dropped the price of beer to $4 for home games.) Venues will give out free coffee at the end of shows, perhaps to balance out the abundance of $4 beers. Instead of getting a large upfront fee for each show, Kid Rock is receiving a piece of ticket and concession sales—which is both unusual and risky in the concert business.

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In addition to the $20 tickets, 1,000 “platinum” tickets will also be sold for each show, with prices ranging from $60 to $350. Essentially, Kid Rock is scalping these tickets in order to make up for the cheaper prices paid by the rest of the concert goers. That’s how he explained it to the Associated Press:

“I’m in the scalping business, but you know what? We told everyone. A lot of artists have been doing this for years behind fans’ backs, taking all these backdoor deals,” he said. “We look at StubHub and other places and see what they’re selling them for and we just undercut them.”

And what about the real scalpers? Won’t the $20 ticket price make it super easy for entrepreneurial types to scoop up loads of seats and sell them for far over face value? Well, paperless tickets are being sold whenever possible, and that should cut down on scalping because an ID that matches the ticket is needed for admission.

But in many cases traditional printed tickets are being sold, and there’s little to prevent them from being resold for whatever price the market will bear. In an interview with the Wall Street Journal, Kid Rock was asked about how he could stop scalpers from jacking up the price of tickets far beyond their $20 face value. “I’m not sure we can,” he answered. “I’ve made it as difficult as I can for them.”

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So how is this actually playing out in the secondary market for ticket sales? Chris Matcovich, vice president of data and communication at TiqIQ.com, an aggregator of secondary ticket sales sites, says that a low initial price point often keeps prices lower in the resale scene, and that prices for Kid Rock tickets on the secondary market are among the lowest of all major tours—with an average of “just” $131.43. In many cases, the typical asking price is far less than average, with tickets going for $20 to $40. The average is pushed up sharply, however, by outliers listing tickets at extraordinary markups: For example, one seller is asking over $1,600 per ticket for seats in the orchestra pit for a show outside Houston.

To a certain extent, the fact that Kid Rock is playing mostly outdoor venues with ample general-admission and lawn seating limits how much profit scalpers can make. “Prices tend to stay low on resale market because there is usually sufficient quantity available both on secondary/primary,” Matcovich explained via e-mail. “This leads to healthy price competition, compared to situations that occur in arenas when floor seating sells out and the resale market is then the only source of inventory.”

Glenn Lehrman, of the ticket resale site StubHub, agrees that it comes down to simple supply and demand. “A $20 ticket for the Stones might sell for $500 because that’s what demand is, while a $20 ticket for Kid Rock may only sell for $40,” he said. (Interestingly, both resale site representatives made cracks about Kid Rock’s drawing power, or lack thereof. Matcovich categorized the $20 ticketing as “more of a publicity move for an artist who isnt as popular as he used to be.” Lehrman noted that “outside Detroit there is very little demand to see him, and “my gut is the $20 price point is more reflective of demand (or lack thereof) than of Kid Rock’s benevolence.”)

A recent New York Times magazine piece offered many examples of how (relatively) low initial prices and limited inventory for concert tickets can result in big money for scalpers: For example, $450 for a pair of Tom Petty tickets that retailed for about half that.

When a show has plenty of tickets available, however, secondary market pricing is severely limited, and sometimes tickets are offered below face value. StubHub lists tickets to a Kid Rock show on July 5 at the Darien Center in New York state starting for as little as $8, which somehow turns into roughly $33 once fees and delivery are factored in. Via Ticketmaster, a ticket in the same section was available for a total of $29, including a $5 service fee and $4 for parking.

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It’s in Kid Rock’s interest for fans to get in the door for the cheapest price possible. That way, he’ll look like the good guy, the crowds will show up in large numbers—and they’ll be more likely to have money left over to spend on T-shirts and beer. “How will people react to a $20 ticket with $4 beers?” he said in the WSJ interview. “They might go nuts and spend threefold the money and we’ll end up doing $15 tickets next year.”

1 comments
cjh2nd
cjh2nd

the main downside of this? having to sit through a kid rock concert