Less Dumb Investing

I’m watching a live festival performance of Eucalyptus by The National, and I noticed something interesting. Side note—it’s an amazing song. Many of the audience members are going absolutely wild as the tempo and volume build. They’re screaming the lyrics back to Matt Berninger, the band’s frontman. But at the same time, other members of the crowd don’t really know the song at all.

That’s totally normal, especially at a music festival. The superfans lined up early to get close, and the more casual fans are just there to enjoy the show. Nothing wrong with that.

But as I’m watching, I have a revelation. I love the superfans. I think they deserve those front-row spots—and more importantly, they’re willing to save and pay for them. Taylor Swift is probably the perfect example of an artist who inspires legions of superfans willing to pay top dollar for top access. But those superfans, along with the regular fans, face a serious issue: scalpers and ticket pricing.

It’s a well-known issue: scalpers use bots to buy up tickets the moment they go on sale, then flip them on the secondary market for massively inflated prices. A ticket that originally costs $400 can easily resell for several thousand dollars. So who benefits from this price spike?

Not the band. Not the fans.

The answer? Ticketmaster—and the scalpers.

I’m not going to go into detail on how scalpers benefit—that part is obvious. But how does Ticketmaster benefit? They collect fees on both the initial sale and the resale of tickets. If a ticket is flipped, Ticketmaster (and its parent company, Live Nation) collect broker fees by matching buyers and sellers. It’s a great business model—if you don’t mind being hated.

So how do we fix it?

Start with these rules:

• All tickets are released at the same time—at elevated prices—and available to the general public.
• Ticket prices drop on a fixed schedule, say $100 every 15 minutes.
• Each ticket has a “retail” value, which is the amount the performer sets as the fair price per seat.
• If the original buyer holds the ticket and doesn’t resell it, they receive a rebate equal to the difference between what they paid and the retail price.
• If the ticket is resold, the rebate goes to Ticketmaster.
• Secondary buyers get no rebate

Let’s walk through a scenario based on these rules.

Say we have a front-row concert ticket with a retail price of $350. When tickets go live, they’re initially listed at $1,800, with a rebate value of $1,450. Every 15 minutes, the price drops by $100. So, one hour after release, the tickets would be priced at $1,400, with a rebate value of $1,050.

If you’re a superfan—someone who really wants to be there—you’ll buy at the $1,800 mark, knowing you’ll get a $1,450 rebate if you attend the show. But if you’re a scalper, that ticket’s a bad bet. To make money, you’d have to resell it for more than $1,800, because you forfeit the rebate. That risk kills most of the incentive to flip it.

This model also shifts the economics for Ticketmaster. I’m not saying they will, but they could stop charging outrageous fees just for selling a ticket. Their income could be tied to the value of rebates on resold tickets, effectively monetizing their ability to outsmart scalpers.

This solves a lot of problems:

And most importantly, only people who genuinely want to attend are incentivized to buy.

Performers still receive the full retail value they expect. Real fans get a path to fair pricing through rebates. The secondary market loses its grip on ticket pricing.