Get out your wallet — or, better yet, don’t: The music subsidiary industries of live venue ticket sales and satellite radio are here to give you a lesson in economics. It was news recently when ticket agent monolith Ticketmaster shuttled consumers seeking Bruce Springsteen tour tickets immediately to a “secondary arm,” which in this case means aftermarket, or, to be more blunt, scalping. The turnaround from viable public sale to resale was an estimated 15 seconds, an impossible speed for the average concertgoer to have broken through to obtain tickets. The whiff of stink indicates that Ticketmaster concocted this scam to get the tickets immediately to the secondary market, where they could charge whatever the market would bear. 100 percent markup? 500 percent markup?

Springsteen wasn’t at all happy about it and made his displeasure public. Afterward, a whole raft of complaints came in, not just for the Springsteen incident but for Britney Spears tickets, summer festival tickets, and a whole host of gouged events. Wouldn’t any other company out there compete head-to-head with Ticketmaster to bring tickets back down to the common strata? Well, maybe LiveNation would be our savior! Well, sure, until it was announced that LiveNation was seeking to merge with Ticketmaster, forming what could only be described as a monopoly on the ticket agency market. Pre-merger, we have seen even modest summer events ticketed at a starting rate of $100 for nosebleed seating. What the post-merger business holds in store is just about unthinkable, and in a poor economy where such entertainment distractions would be welcomed, this seems like a suicidal business practice.

Well, if we can’t rely on businesses to be responsible, or at the very least realistic, we can expect the US government to intercede and not allow such shifty unions to take place, if only for the sake of the public trust, right? Think back to the days when our governance said things like, “We cannot allow XM Satellite Radio to merge with Sirius. They’re the only game in town. To wed them is to subject their customers to all manner of pricing abuses.” Not long thereafter, the two joined forces anyway because, in matters such as these, the merger almost always goes through. And now it looks like XM/Sirius is on the brink of bankruptcy. Are these events related?

Back in the infancy of satellite radio, there was a cry of disdain — how can you expect the public to buy into paying for radio after having free access for years? Signal quality is a selling point and, undeniably, digital radio sounds a lot better than standard airwave broadcasting. Censorship is another point, in that because you pay for the usage, you assume the liability of offense, so the codes of “morality and decency” are waived, much like cable television. This was a big plus for Howard Stern, one of the first truly big stars to gravitate to satellite. He famously berated the fans who refused to follow him over, calling them all manner of slurs now that the station he was on (being his very own) would never muzzle him. (more…)