The economics of this isn’t pretty for consumers so be warned. The ticket seller Stubhub has given itself a cash cushion from buyers who had events cancelled due to the COVID-19 pandemic. Originally (pre-pandemic) consumers who bought tickets on the platform were guaranteed a refund if the event was cancelled but less than the two weeks after the NBA and the NHL seasons were put on pause, Stubhub quietly amended its policy (on March 25th) to give consumers who purchased from them a voucher worth 120% instead of a refund. They are now the subject of a class action lawsuit, read more about that here. However, here’s why this their voucher idea is good for Stubhub and bad for consumers.
- The vouchers expire by December 2021, so if you had waited more than two years to see that band finally come to your city and they’re not coming back for a while, well you’ll have to choose an inferior substitute
- If everybody that had tickets to MLB, NBA, NHL, or concert over the course of multiple months now has vouchers they have to spend by a certain time it’s going to increase demand for tickets. An increase of demand is going to increase prices that sellers can charge (they are free to charge what they want). So I may have paid $100 for tickets to a hockey game in section 211, Row J before the pandemic, if I want those same tickets for the same game a year later I may find that the price is now $130 or more because there are a lot of people who have vouchers that they need to use.
- Stubhub charges a lot in service fees, for buyers they charge 10% the purchase price of the ticket and for sellers they charge 15% per ticket. So for a ticket that’s priced at $100 the seller will get $85 and the buyer pays $110. What is to stop Stubhub from raising their fees once sports resume? They were “ethical” enough to quietly change their refund policy, what if they raise the fees on customers to 15% to recoup the value of the vouchers? That means the ticket now costs $115 and coupled with increased demand that may further diminish the actual value of the ticket.
- Similar to gift cards, people often receive them and forget to use them, so there will undoubtedly be some people who simply forget to use their vouchers and it becomes a gift for Stubhub.
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It has undoubtedly been one of the strangest semesters in the past 50 years ago. We started out as a we normally do then things changed suddenly in late February. Cases of the Coronavirus had appeared in Washington State and schools there started to close to slow the spread. In early March there were reported cases in New York City and a few days later the first cases were found in Virginia. On the Monday I was having lunch with another professor and I suggested off-hand that we may have to switch to online instruction (I didn’t think it would happen). Just to hedge my bets, in class on Wednesday I spent the first few minutes of all of my classes talking about the plan to go online should that remote possibility come to fruition. I left campus at 4:45pm that day and a few minutes later I read the email from President Paino which told us that we’re going online and everybody that can leave campus should do so. So much has happened since then and it was undoubtedly strange to the students. I asked one of my outstanding students to finish off his internship by making a short documentary on how the changes have impacted him and other students. He put together this outstanding video to give that perspective. It’s quite good: https://www.youtube.com/watch?v=kFpbNKGOmnU
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These indeed are strange days. COVID-19 has upended life here in so many ways and one of the challenges is that we’ve moved all of our classes to online instruction. This is the first time that I’m teaching an entire class online. Here’s how it went down, on the morning of March 9th a few of the faculty were talking about a couple of cases of Coronavirus found in Virginia. On a hunch I decided to mention online instruction to my classes on the off chance it could happen. That afternoon I meeting with some faculty and it dominated our discussion. On Wednesday I made a plan and presented it to my students on what would happen if we went online for instruction. I didn’t actually expect it to happen, a couple of hours after my last class and after I left campus I received word that the University would move to online instruction for a few weeks. I scrambled to get things ready for online instruction, my first day I forgot to share my screen, didn’t press record, and my system crashed. Things have since improved but we just received word that we’re going to finish the online semester online. We’re in the midst of upheaval right now but I hope to write more at a later time that reflects on what went right and what went wrong with the transition.
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Every year my digital marketing class (Mktg 417) finds a product that would have good sales online. The students are tasked with creating a Facebook ad for the product and then we create the website and run the ad. Then we track the audience to the page using Google Analytics. This year’s winner is a solar charger for your devices that you can use when you’re exploring the great outdoors. Our shop is located at www.mysolarcharger.myshopify.com, give it a look and enjoy.
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Last week I had the pleasure of attending a talk given by our own Professor Dan Wolfe where he talked about how much the entertainment industry (TV and movies) has opened up. This is largely brought on by the online streaming services such as Netflix, Disney+, and Apple who are creating their own content. We’ve moved into an era where more competition has opened up greater demand for content. For comparison, Professor Wolfe compared the number of feature films created by Disney last year (12) to the number created by Netflix (200+). It’s never been a better time to create desirable content because content is king and if you’re creative their is demand for your services. His talk was posted to YouTube and is available here: https://www.youtube.com/watch?v=waLwGPXs-uk
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Last year (2019) both Los Angeles and Washington D.C added more restrictions on Airbnb rentals. Both locations require hosts to only list their primary residence and put a restriction on how long the property can be rented via Airbnb (120 days and 90 days respectively). Toronto is implementing similar regulations in 2020. The rationale behind these regulations is the same as it is for other municipalities which have restricted Airbnb rentals such as Paris, Amsterdam, and San Francisco. They are motivated by the growth of commercial operators, those that buy properties and do not live there but instead renting them as short-term rentals. This situation reduces the supply of affordable housing in the area and as a by-product harms legitimate hosts in the sharing economy. I’ve compiled a summary of regulations from around the world. Summary of Airbnb Regulations Around the World.
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