This is old news, but recently Ticketmaster announced they would sell some concert tickets via auction, thus delighting efficiency-loving economists everywhere, as the Freakonomics writers detail. I have to admit, the idea made sense to me too, when I first heard of it. Ticket prices have obviously gone up precipitously (roughly 9% a year since 1996) and some (like "rockonomist" Alan Krueger) have blamed file-sharing, though I agree with Tony Vallencourt that this is just an alibi, that prices were raised simply because the market could bear it. I'm sure in the old days, bands had an incentive in keeping prices low so they could build an audience (a.k.a. paying your dues, being a "hard-working" "blue-collar" band in the mold of April Wine or Kansas). But that is a relic of a time when local scenes were relevant, and entertainment choices were few. What bands need to build audience that way anymore, when the preferred method is Internet self-promotion? And the hallmark of Internet culture seems to be immediate viral fame that spreads quick and then extinguishes itself. And the popularity of American Idol–like shows may have undermined the notion that hard work and perseverence is required -- what is required, really, is winning a contest.
Maybe low ticket prices are loss leaders of a sort, designed to facilitate the sale of T-shirts and booze at the venue. Levitt writes, "Concert promoters like full venues. Big crowds buy more CDs and T-shirts, and maybe they also make the concert experience more enjoyable. So historically, tickets in general were priced too low to ensure a sell-out crowd, and the best seats were particularly underpriced." He theorizes that underpriced seats allow poor but rabid fans to invest the time in waiting out for hours for tickets to go on sale and there by get up front and energize the band with their fervor. With that system dismantled, shows will be underwhelming, as the front rows will be populated with the luxury-box crowd, those for whom having the power to get the ticket at all means much more than actually attending. The band, confronted with these scenesters will be too disconsolate to perform. That all seems a bit far-fetched, but I don't doubt that there are plenty who are more interested in their own prestige than any performer. (The rest of the crowd at arena shows are probably, at root, looking for an excuse to get high and get out of the house.) You see these people in the cordoned off areas of Bowery Ballroom and Irving Plaza, the backstage and press pass types who are excited by access, not by music. The Ticketmaster auctions let more people play this game of maneuvering, brokering and leveraging for position and measuring their accomplishment by the ticket (a positional good if there ever was one) and not by the experience it gives them entry to, which is sort of an afterthought.
It seems to me one may as well enjoy the competitive thrill of the ticket hunt. I already wonder if it's even possible to enjoy music at rock concerts; if I'm not annoyed by the crowd (I look around thinking, I'm one of these people? I feel like such a tourist) then I'm bothered by the bad acoustics of the venue or the impossible sight lines or the fact that the band is incapable of any improvisation and are basically replicating the record. Then I get tired of standing around and start wondering when it will end. Better to see unknowns in bars -- I can usually sit and drink even if I can't carry on a conversation, and it's typically intimate enough to allow me to pay attention, possibly be inspired to make music of my own.