When Coldplay decided to play two shows in Mumbai early next year, they vastly underestimated how many Indians desperately wanted to see them live. BookMyShow, their ‘exclusive’ ticketing platform, was immediately overwhelmed by the response. The website crashed before sales even began. Eventually, BookMyShow had to throw up massive online ‘queues’ to accommodate the tens of lakhs of people seeking a ticket. Most walked away empty-handed. 

But that wasn’t even the worst bit. Many people who got tickets didn’t even want to see the show! They wanted to sell them onwards and make a quick buck. Almost immediately, tickets appeared for re-sale on websites like Viagogo, for up to ₹9 lakh a pop.

I guess we’re all supposed to get angry at this whole episode, or at least that’s what Twitter tells me. And while Twitter could get mad at a newborn puppy cuddling with a child, in this case, I see why. It feels unfair. It’s just not how things should be done.

What I’m a little confused about, though, is who it’s unfair to. 

Theory #1: It’s unfair to Coldplay

You could argue something like: “Coldplay built a legacy over three extremely difficult decades. They wrote music, performed night after night, and ground patiently through the politics of the music industry, until people recognised their name on every corner of this planet. And now, when lakhs of Indian fans try to see them, these wretched ticket scalpers make money at their expense?!”

Horrible! That money belongs to Coldplay — not some rando who got lucky with ticketing queues!

But also … so what? 

Coldplay and its management were probably front-and-centre in planning their Indian shows. They came with a vague sense of what India could afford and how much it cared for international music — and they planned accordingly. Happily, they underestimated themselves.

At some point in the last many months, Coldplay sat down with its management, did some math and decided: hey, maybe some of those billion-plus people would like to see an ancient British band whose best songs came in the early 2000s! If we sell X tickets for Y bucks each, we’ll probably earn enough to spend a whole week in India! And then, they went and sold exactly as many tickets for exactly those rates. They knew the most they could earn from these shows well in advance. They hit that number in minutes. Even if there were no reselling, they wouldn’t have made a single extra paisa.

In fact, this mania showed Coldplay that people weren’t done with them. It was a signal; there was enough demand in India for them to sell out a whole third show. So they promptly planned one, and sold it out. The long queues, the social media sobbing and the ticket scalping allowed Coldplay to push their revenues up by 50%.

So maybe the ticket scalpers used Coldplay’s name to make money. But how did they leave Coldplay any worse off? If anything, they had a better idea of how crazy Indians were for Coldplay than Coldplay themselves, and this difference in perceptions was how they made money. And, I don’t know, that doesn’t really seem unfair to me?

Theory #2: It’s unfair to BookMyShow

I have a lot less sympathy for this one, because BookMyShow’s platform IS ABSOLUTELY FU-… (I should keep that one for my personal blog).

But anyway, here’s the case: “BookMyShow was the exclusive platform to sell Coldplay tickets. It probably took them many rounds of negotiation and some big concessions to bag the contract. They put in all that effort for a reason: for it, they’d get service fees, data and lakhs of eyeballs. But at the very last moment, Viagogo swooped in from nowhere and rubbished their exclusive rights! They scraped all those benefits, and a lot of free publicity besides, with none of the hard work!” 

My God. So sad. 

But, of course… this isn’t unfair?

Just like Coldplay, BookMyShow knew exactly what it stood to gain if both shows were sold out. It got there in minutes. From what I can tell, on the day of booking, it got 1.3 crore people on its platform. That’s two-and-a-half New Zealands put together. Trust me when I say this, because I work for a tech company: that’s mad traffic. Server crashes aside, this might well be one of the best days the company ever saw. 

In all, BookMyShow had some expectations from the Coldplay tour, and those expectations were, well, met. Does ticket scalping take anything away from it? Maybe it still wants exclusivity on principle, and maybe all the reselling goes against the terms on which they sold tickets. But that’s for their lawyers to sort out. Those aren’t principled questions, they’re arcane matters of contract law.

Principally, Viagogo (or those reselling tickets) didn’t take anything away from BookMyShow. They benefitted in addition to it. Of course BookMyShow doesn’t like that. But their complaint isn’t that people resold tickets — it’s that they resold tickets on another platform. If people did the same thing using BookMyShow’s own services, they’d be perfectly happy.

How do I know that? Because arch-rival Zomato Live is actually trying out its own in-house reselling platform. 

Theory #3: It’s unfair to the fans!

Now for the most convincing complaint — the one from fans:

“I did everything they asked me too! I tracked the concert from the moment it was announced; I logged in as soon as I could, and refreshed the page fifteen times before it would work — and what do I find? These a-holes had already bought all the tickets, in bulk! Using BOTS! They didn’t even want them — they’re just selling them for lakhs! There’s no way I can afford that! I hate this!”

Hey, I get it.

If you were one of the first 0.5% that logged in, and still couldn’t land a ticket — it does suck to be you. If BookMyShow didn’t maintain basic digital hygiene and forced you to race against bots, that’s worse. And if, by any chance, the conspiracy theories are true — that BookMyShow actually throttled sales so they could hand tickets over to resellers, that’s criminal. If there’s a way in which you want people to buy tickets, stick to it!

In the grand scheme of things, though, those were just a small number of tickets. There’s a larger problem here: ultimately, too many people who wanted too few tickets. Someone had to lose out. And whoever lost out would feel cheated. 

In an ideal world, those limited tickets would go to India’s biggest Coldplay fans. Some bands are trying that. Oasis, for instance, wants people to answer a quiz before they can buy a ticket. That’s hardly practical, though? More people tried getting a Coldplay ticket than those that wrote the IIT-JEE (Mains!) this year. If even the IIT-JEE doesn’t catch all of India’s best engineers-to-be, can BookMyShow do any better?

If it can’t, you have to pick a completely arbitrary metric to decide who to give tickets to:

• You could give tickets out on a first-come-first-serve basis. This sucks in practice, though, because you’re basically putting everyone through a giant all-versus-all battle royale with millions of people. One’s only shot is to obsessively track when ticket sales will open, hit refresh a million times on the D-day, wait through long queues, and maybe, after all that effort, grab a ticket. A bit like this:

• You could sell tickets to whoever’s willing to pay the most. Those who really want to see the show can let their wallet speak. Again, the competition is brutal, so they might just have to shell out a year’s salary for a single pass. 

The choice is basically to either ask people to spend more time than anyone else, or more money, to show their commitment to the band. To me, it isn’t obvious which is better?

Yes, the second option skews the game heavily in favour of the rich. But is the first one any more fair? Most people have neither the time nor the patience to fight a brutal, national-level contest of first-on-the-buzzer. Sure, capitalism has its flaws. If we were using one’s paying capacity to decide who gets an organ transplant, or grain during a famine, that would be terrible. But if there’s one place the logic of capitalism should work at its nasty, brutish best, isn’t it when you’re distributing tickets for a foreign pop-music band? Really, is there anything more inherently capitalist than that?

From what I can see, the gig’s organisers chose to keep tickets cheap. That created a first-come-first-serve stampede. A ‘secondary market’ then swung into action, and made tickets available again. But this time, sellers were courting the highest bidder. Both were arbitrary ways of allotting tickets. But in a world with more fans than tickets, can you really avoid arbitrariness?

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Hmm. So it’s hard to see who gets short-changed by this situation. Nevertheless, the whole episode still leaves you with a bad taste in the mouth. It feels unfair. 

Should we listen to our gut on this one and stop something like this from happening anyway? Maybe. Before we whip up the lynch mobs, though, let’s understand the problem: the way things work right now, it’s hard to do something about ticket scalping. Show tickets simply don’t work like airline tickets; nobody checks (or wants to check) the personal details of who they’re selling a ticket to. Why should they? Neither organisers nor concert-goers want that extra layer of inconvenience. And so, even if you could shut a platform like Viagogo down (and it’s not clear you can), people will sell their tickets on Whatsapp / Telegram / wherever else.  

We can solve this problem. We’ll need some way to confirm the identity of whoever’s buying a ticket, and make sure that only they enter. K-Y-C, in other words. Only, this would be horribly expensive — requiring crores in investment — while making the concert-going experience more painful than it already is. Financial institutions do these things because they’d like to stop fraud and money laundering and all kinds of horrible stuff. Do we really want people to put in all that effort for equitable access to Coldplay, though?

Before we come to an answer, maybe we should see if there are any benefits to ticket resales.

Benefit #1: You can still buy tickets after, like, the first five minutes

This is the most obvious benefit. In the Coldplay debacle, you could be left high-and-dry even if you tried buying Coldplay tickets within the very first hour. It didn’t matter if you were the biggest Coldplay fan in the world; if your earliest memories were you babbling along to Yellow, or if Viva La Vida helped you survive your teenage years, or if you fell in love with your soulmate to Fix You. If you were timed out, you were timed out. Just too bad. 

Except… if you were willing to pay a hefty premium, you could get a second chance. You could still see the band of your dreams, live. 

Isn’t that a good thing? 

Benefit #2: If you can’t go, you can sell your ticket to someone who can

If you bought a ticket on September 22, you’d have to wait another four months before the day of the concert. That’s a long time. There’s a good chance your plans could fall apart by the time January rolls around. Here are just a few: 

• If you’re planning to go there with your significant other, there’s a non-zero chance you’ll break up by then, and won’t feel like going any more. 

• You could fall into a ditch, break your leg and get saddled with a wheelchair for half a year. 

• You could win a fellowship for some prestigious program in Europe, for which you need to travel on exactly those dates. 

… and so on.

If any of this were to happen, your ticket would be useless. For all the hype, there would be an empty spot at the venue when Coldplay finally performed. In fact, you might hesitate to buy a ticket at all if there were even a 20% chance that you couldn’t be in Mumbai four months later. After all, that’s a 20% chance you’d get stuck with a useless ticket and lose all your money. 

… Except, of course, if you could sell your ticket. If a bolt-from-the-blue ruins your Coldplay plans, you should be able to sell your ticket to someone who can actually see the show. After all, nobody benefits from your ticket being wasted. I don’t think people mind if someone gives their tickets away if the circumstances call for it. They only mind people who buy tickets with the specific intention of selling them. 

Benefit #3: Can scalpers de-risk concerts?

The Coldplay incident was an edge case. The way it all played out — tickets selling out immediately and then being resold at ridiculous prices — ticket scalpers looked like obvious villains. But are scalpers always bad? 

Most bands don’t immediately sell entire stadiums. Usually, concert tickets stay listed online, unsold, for months at an end. What’s more, the liquidity that early ticket sales bring are really important for a concert’s success. Often, organisers rely on the money they make from early ticket sales to hire the equipment and workers they need for a good show. Until those sales happen, they basically grit their teeth and work through a lot of financial risk. And… that’s not ideal? If you’re an Indian music aficionado, you probably want concerts to be a lot easier to host. 

The good thing about scalpers — maybe the only good thing — is that they could take this financial risk off the hands of organisers. They’d get money in-hand, which simply lets them work on arranging the best possible show for you.  

The associated headaches — do people know about the concert, is their pricing right, are enough people buying tickets — shift to scalpers instead. If they take smart bets and there’s enough demand for the concert, they pocket a tidy pay-off. If they take a bad bet, though, and tickets aren’t selling, it’s for them to figure out how to move them anyway. If they have to sell them at a loss, well, who cares? It’s fair, isn’t it? To profit off a band’s reputation, you need to put your own butt on the line. 

Now, this does mean high prices whenever a superstar band like Coldplay comes to India. If the demand for tickets goes wild, prices will follow. For the vast majority of concerts, though, they could simply take a lot of the load off organisers’ backs.  

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A ridiculous proposal

With all this in mind, here’s an idea for a better way to sell Coldplay tickets. Stick with me — things will get very weird, very soon. 

The way I see it, the worst enemy of a scalper is, well, another scalper. The only reason anyone was able to sell a ₹9 lakh ticket is that they were alone in selling such a ticket. Now, imagine: if there were dozens of tickets being resold, they wouldn’t have this pricing power. If you overcharge and there are plenty of other tickets available, people simply buy from someone else. If anything, these ridiculous prices are a consequence of ticket scalping being a distasteful, legally grey activity that most wouldn’t do openly. The rarer tickets are, the more scalpers can charge. 

What if you went in the other direction? What if you let people resell their tickets with no barriers at all, on an open, transparent platform? Well, you’d create a market. And there are two incredible things about markets: liquidity and price discovery. 

Imagine an active market for Coldplay tickets, where people constantly traded in tickets, purely to make profits. Here, a lot of people would scalp; they’d only buy tickets to sell them later. But there would be a benefit to their scalping. These people would actually ‘make’ the market. They’d buy tickets if they seemed cheap, and sell them when the markets were willing to offer a good price. 

In doing so, they’d perform a valuable service for genuine buyers and sellers. If you bought a ticket but your plans fizzled out, they’d give you a place to sell your ticket. If you wanted a ticket but weren’t able to get your hands on one, they’d sell them to you. 

Meanwhile, they would also ‘discover’ the right price for tickets. 

It’s almost impossible for any one person to guess the right price for anything. There are simply too many ways of getting it wrong. If something’s too expensive, many will decide it’s outside their budget and hold back from buying it. If something’s too cheap, you’ll get a whole lot of buyers — but without enough of a profit, nobody will be motivated to supply it. The ‘right’ price for something must strike a perfect balance, keeping both buyers and sellers interested. Unfortunately, unless you have God-like intelligence (and knowledge), you’re unlikely to know where that balance lies. 

The magic of markets is that they do this job automatically — by bringing hundreds of people to put their heads to a task. Markets nudge both sellers and buyers to test the waters constantly and find the best deals they can. In doing so, they balance each other out. There’s no guess-work involved. If there’s a price at which a whole lot of buyers and sellers are able to strike deals, that is the right price. 

Beyond the mania and outrage, a big ingredient in this episode was that Coldplay priced their tickets too cheap. Their tour was a once-in-a-decade event. Coldplay brought many generations of Indians to English music, and yet, they were selling tickets cheaper than some half-decent Indian bands. This was a golden opportunity. If one was lucky enough to get to the ticket queue in time, it made complete sense to buy as many tickets as one could and sell them later. People loved the band, after all. They would pay through their nose for your tickets. 

This isn’t Coldplay’s fault, of course. Their job is to make music. It isn’t to have an encyclopaedic understanding of contemporary Indian society. They could, however, outsource this job to scalpers. 

Imagine: instead of releasing all their tickets at once, Coldplay only sold one-third of their concert tickets, in some sort of ‘initial ticket offering’, and then let them float freely on a transparently-run secondary ticket market. Very quickly, the market would discover the ‘right’ price for those tickets. 

This would be vital information. It would set a benchmark. When Coldplay released the next tranche of tickets, it could factor this information in. Even if they didn’t stick to the market’s price, they’d be able to take smarter ticketing decisions. If people were willing to pay several lakhs to be right in front of the stage, for instance, they could sell a hundred extra spots there for ₹1 lakh each, instead of ₹15,000. All that additional money would go to Coldplay, not the scalpers. If the market lapped those up too, Coldplay could be even smarter with the next tranche of tickets. And so on. 

But the benefits wouldn’t end with Coldplay. If a transparent market screamed “popular foreign bands can make millions in India!!”, others bands would take note. India would obviously become a million-dollar opportunity. Who else could we then draw? Linkin Park? Taylor Swift? Kendrick Lamar?

I’m just putting this out there: if ticket scalpers could bring the K-Dot himself  to India, please, for God’s sake, start scalping immediately!

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Why the hell is Zerodha writing about Coldplay tickets?

If you’ve stuck with me for this long, let me tell you a secret: this isn’t really about Coldplay. 

My point isn’t to defend Viagogo, or ticket scalping. I know nothing about the music industry, and honestly, IDGAF about Coldplay. (Now, if this were Radiohead on the other hand…)

I’m just trying to demonstrate what secondary markets do. 

By and large, the stock market is a secondary market. At first glance, it looks extremely weird (much like ticket scalping does). Here’s a whole industry dedicated to taking bets on the price of little bits of companies. That’s all there is to it — betting. This market doesn’t create anything. It doesn’t help those companies in any obvious way. The companies do all the work themselves. People simply profit off their good name on the markets. How in the world is this a legitimate thing? It’s hard to see what point it has at all! 

That is, until you understand a simple fact: secondary markets can be powerful.

If there’s one thing we know, it’s this: well-run companies are incredible at making money — better than the average person, anyway. Left to their own devices, the average person would be hard-pressed to use their money better than a well-run company. So, instead of breaking their heads looking for worthy investments, it makes sense for regular people to just buy little bits of these companies with their money, so that they get a share in their incredible returns. That’s what a ‘share’ is, after all. Companies benefit from this too — they need money to run, and regular people’s savings are a good source. It’s a win-win bargain. 

There’s a problem, though: regular people wouldn’t invest in a company if they can’t sell those investments whenever they want. However, as soon as a company allows people to buy and sell their shares freely, just like Coldplay, it loses control. The shares take a life of their own. Many people start buying shares just so that they can sell them for a profit — not because they care about that company. Any profit they make is theirs — none of it will reach the company. 

At first brush, this seems pointless. Those ‘speculators’, the company may reasonably think, are no better than ticket scalpers ripping off Coldplay. What’s easy to miss, though, is that these speculators create liquidity, and discover prices. That’s immensely useful to everyone around:

• If you genuinely like a company and want a part of it, the market gives you easy access to its shares, because thousands of speculators are willing to sell shares to you. 

• If you hold a share in a company that you want to sell, there are thousands of speculators that will buy it off you. 

• The next time that company needs money, the markets tell it the ‘right’ price at which it can issue some shares, and gives it an army of buyers that’ll take the risk of courting genuine investors off its hands. 

• Other companies might reasonably look at this market, and decide that it would be a good idea to try selling their own shares. 

This is the magic of the stock market. By giving people the opportunity to make money off a company’s reputation, it makes life easier for the company and anyone that genuinely wants to invest in it. 

If someone asks you what the point of a stock market is, here’s an easy answer: “the stock market is the Viagogo of the finance world. But really, that ain’t such a bad thing!”