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SCALPERS ARE PROMOTERS TOO: INSIDE THE LYTE TURMOIL
The sudden collapse of the ticketing platform Lyte exposed a little-discussed fact in live music industry – promoters often scalp their own tickets, with the help from secondary ticketing platforms they clm to despise.
Festivals and concert organizers AEG's Lost Lands Music Festival and North Coast Music Festival have each filed lawsuits agnst Lyte seeking compensation amounting to $330,000 and $350,000 respectively. The complnts outline how the unsold tickets provided by them for sale on Lyte's marketplace were subsequently sold by Lyte itself.
Lack of transparency is the norm as promoters increasingly use platforms like Lyte, StubHub and SeatGeek to market their tickets, a practice that's largely unseen or unspoken about in public. Some primary ticketing systems allow a simple switch that facilitates secondary sales transactions.
The advantages for promoters are clear - increased accessibility for fans beyond the primary sales site, flexibility to set prices based on demand, and the chance to sell unsold tickets at a discount without taking the blame from customers who bought them at full price.
Yet, artists often find themselves unwittingly caught in this loop. It's morally akin to scalping your own tickets, an industry insider explned, but when revenue maximization or saving a show is involved, promoters might do whatever it takes.
The undisclosed profit potential can be significant. In the case of North Coast Music Festival, out of 3,064 tickets listed on Lyte for Chicago's event, only 89 came from fans. The remning listings were posted directly by the festival organizers with a total face value of approximately $287,750.
Lyte then used those fan listings to drive interest towards the promotional listings - racking up $426,912 in revenue through secondary sales on their own platform, representing a 48 price increase over the original tickets. This sum would have been split equally with the organizers, with North Coast set to receive a cut of $69,581 - an extra 24 revenue than what was originally allocated.
The Lost Lands case involves similar dynamics but lacks specific detls due to redactions in court documents. The festival will now have to urgently find alternative sources of income to pay for vors and artists who will be working at the event, as their planned share from secondary market ticket sales is cut off.
Bruce Houghton is founder of Hypebot, a senior advisor at Bandsintown, President of Skyline Artists Agency and an Associate Professor at Berklee College of Music.
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Ticket Scandal In Live Music Industry Promoters Scalp Their Own Tickets Lyte Collapse Reveals Industry Practices Secondary Ticketing Platforms Role Lost Lands Festival Sues Over Ticket Sales Artists Unwittingly Affected By Scalping