05 December 2007

Free riding

I spent far too much time yesterday trying to get my mobile phone and my trusty Psion Series 5mx talking to each other, prompted in large part by Bruce telling me he was going to buy a Psion. The one thing that disappoints me about my phone is that it won't talk to the Psion, apparently because the infrared ports are incompatible. Maybe I'll get round that one day, but for now the solution is to get out the phone that used to do the job - presumably it still does!
This morning the Today programme on Radio 4 presented me with a wonderful opportunity to comment here on something to do with IP - a necessary balance, I'm sure, to all the stuff about running that I usually post. In an item about the secondary market for tickets to events, principally concerts, the proponent of a levy to protect consumers and/or (I was a little hazy about what was being proposed, joining the debate halfway through as I set off for the station) remunerate the artists asserted that the secondary market only existed because of the artists' IP.
It's a classic example of invoking this omnipotent and undefined entity to support whatever requires support. The opponent of the levy countered that this was like raising a levy on sales of used cars in order to pass back something to Ford. The artists were paid for the show, and he could see no reason for them receiving a further payment from his profits. (He also made the point that sometimes his company made losses, too.)
Am I alone in thinking that the whole idea of a secondary market is pernicious? I thought so about parallel traders making a good living out of sourcing cars where they were cheaper and bringing them to the UK, often giving customers a bad deal and leaving dealers (as well as manufacturers and importers) to pick up the pieces. But a levy on parallel imports probably wouldn't have solved anything, and anyway the arbitrageurs were perceived by the general public as the goodies in that situation.
The problem is fundamentally one of supply and demand. If the car m manufacturers had charged a market-clearing price, there would have been no profit to be made from parallel imports. They were faced with trying to set prices within a common market of nine to fifteen countries (how do they do it now in a market of 27?) with vastly differing tax regimes and other differences. Surely spending power must be a key factor, too.
In the primary market, sales are made on the strength of the manufacturer's reputation. The secondary market exists because of this reputation and the fact that it is not being fully exploited. The same is true in the concert ticket market. The artists (or, I suppose more likely the promoters) are pitching their prices too low, letting someone else pick up the profit they have foregone. Their "IP" (in the wide sense of the expression) is involved, but the point is that they are voluntarily not getting full value from it. Given that the music market is, as we are told, moving away from recordings being the big earner to live appearances being the artist's primary source of income, the price of tickets should theoretically be raised.
The catch must be that charging something nearer £171 for an Arctic Monkeys ticket that currently costs £30 (the example cited on the radio) disenfranchises many less well-off fans. Even at say, £100 some purchasers would be really stretching themselves while others would pay several times that. Some form of discriminatory pricing is needed - premium packages, like the £164 tickets for the Stones in August that I could have had, are the way forward, but necessarily backed by a prohibition on transfers -which could be contractual, if not statutory, though the Labour government would probably welcome an opportunity to maintain its record of a new offence created, on average, every day since it came to power. (Who counted them?)
On the other hand, the secondary market serves a purpose in making available. at a price, tickets that otherwise would not be available. Perhaps returns would meet the same demand, and if there were no secondary market there would surely be more returns. And it would completely remove the possibility of forgeries, currently blighting eBay.
Another possibility, of course, would be to pay £15 to see Stackridge at the 100 Club next 1 February. However, I won't say that too loudly, lest the tickets sell out and some unscrupulous middleman makes a killing.

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