I Will Not Be Attending The Dead at MSG
As readers of anything I have ever written will know, I am a staunch proponent of free markets and the right of bands to charge whatever prices they want for their tickets. It is entirely within their right to put any price on a ticket to see them in concert if they believe it will maximize their revenues. This belief is rooted in a confidence in the free markets and the right of any entity to maximize their profits as well as the right of consumers to refuse to pay prices they deem excessive. When I am confronted by individuals who take issue with my position, I merely tell them that if the ticket price is too high, people wont go and then the band will have to lower ticket prices to be more in line with demand. That is how it works and that is how it should work. There is no way to determine what a fair price for concert tickets is other than to let people tell you. The only reason bands sell out concerts is because they priced tickets too low and when bands do not sell out, the public has told them that tickets were too high. I have always been in favor of higher ticket prices and I will always be in favor of higher ticket prices.
That said, I will not be going to see The Dead at Madison Square Garden because I think ticket prices are too high. On the one hand, I advocate higher ticket prices and encourage bands to price their shows well above current price points, but then on the other hand, when a band does this, I say I will not be attending the show. Some might ask me how these two statements can be reconciled. At first these two positions might seem to be at odds, but the truth is they are perfectly aligned. To be clear; The Deads organization is not new at this. They have put together models that estimate the level of demand for their shows and they know the income of their fanbase. They have evaluated a series of attendance scenarios and they have determined that a top level ticket price of about $100 is appropriate given the level of attendance they expect at various shows. They have decided that given a certain level of attendance expected at a given ticket price, they will generate the most amount of revenue for the organization. They do not sit down and decide at what price will every show sell out. In fact, Im willing to bet they count on certain people not attending.
I will be one of those individuals not attending.
Its not because I dont have the money to spend. I do. And its not because Im saving up for something else. Im not. Its because I dont believe The Dead, in its current incarnation, is worth $100 to me. This is a fairly basis economic principle called utility. Essentially, I dont believe that I will receive $100 worth of satisfaction (however that is measured) from The Dead show. So I have chosen not to spend that amount of money on the good (the concert) in the belief that I will be disappointed. We can look at this from the vantage point of another economic principle; resource allocation. Essentially that principle says that ones recourses are finite and that given a finite set of resources, one will allocate them in the most efficient way possible. In this particular case, allocating $100 to The Dead is not the most appropriate way to spend $100 given a variety of other, more productive, uses of my funds. Lets say four $25 dollar concerts. This is fairly basic but still quite important.
But with that said, The Dead has every right to charge $100 for their shows and I do not fault that one bit despite the fact that I wont be attending the show, or at least paying that price. I am disappointed that I wont be at the show but I am also disappointed that I wont be buying a new Lamborghini this year. I am also disappointed that I wont be yachting in the Mediterranean and on a more reasonable level I am disappointed I wont be eating at Wolfgangs Steakhouse five nights this week.
At the same time, in the course of conversations regarding this topic, people have asked me if I was effectively saying that bands (in this case The Dead) are a monopoly and therefore they can charge whatever they want; we as consumers have to pay it if we want to see the show so we should just shut up. That position is incorrect on two fronts and I am not saying that. To begin with, in the case of the Dead, I would argue that they are NOT a monopoly. Yes, if you want to see Bob, Mickey, Bill and Phil on the same stage together, they are a monopoly in that sense. But there are tons of Dead cover bands that do an admirable job of playing the music as well as the respective side projects of each member which some would argue are more enjoyable than anything The Dead are capable of doing these days. There is, needless to say, ample competition. Secondly, even if we were to assume The Dead was a monopoly in the traditional economic sense of the word, that does not mean they can charge whatever they want. In fact, no monopoly sets or raises prices arbitrarily and I alluded to this earlier. That principle is beyond the scope of this article but lets assume that even Monopolies have a limit on what price they can sell their goods at.
The point of the story is that the free market is working right now exactly as its intended. The Dead has set the price of their goods at a level which I deem to be too high and as a result, I will not be purchasing their goods. Will someone else? Maybe, but theres nothing I can do about that. If 25,000 other people think prices are entirely appropriate, than the show will sell out and I lose. The next time The Dead play MSG, assuming they sell out this time around, they should raise prices again. Why not?
As long as you continue to pay it, then its totally fair.