Will bidding raise prices?

Live music: going once, going twice ... sold to the highest bidder?

That prospect is looming over the pop world these days as musicians, managers, promoters and concert facility operators gingerly but steadily experiment with selling tickets by auction.

Tonight’s Hollywood Palladium show with the Red Hot Chili Peppers, System of a Down and Metallica is the immediate example.

A little more than half of the 3,500 tickets for the benefit were sold the conventional way at a face value of $55 for floor seats, $85 for the balcony. The remaining 1,500 were sold via Internet auction. The result: Those tickets went for $110 to $400 each, boosting the concert’s gross dramatically.

That means those who bought their tickets via auction paid two to seven times as much as fans who went the conventional route. All proceeds will help the show’s two beneficiaries: the Silverlake Conservatory of Music and the Louis Warschaw Prostate Cancer Center at Cedars-Sinai Medical Center.

But the question is whether auctions will become part of the day-in day-out concert-going experience. And if they do, will ticket prices go even higher than the $200 and up level they’ve hit in the last decade?

What everyone in the concert industry is looking for is ways to reclaim the millions, some estimate billions, that brokers and private individuals make each year reselling tickets. (Tickets for tonight’s benefit are being resold for $150 to $300.)

The concert industry so far has implemented ticket auctions only sporadically, and almost exclusively for charity-related shows, a format where tactics to boost the take at the box office are not only practical, but positive. By one measure auctions are already an everyday reality.

“The viability of auctions has proven itself without any outside assistance,” says Gary Bongiovanni, editor of the concert industry magazine Pollstar. “All you have to do is look at what’s happening on EBay. It’s a whole cottage industry where professionals and amateurs are auctioning off tickets.

“The proper way to address that as an industry,” he adds, “is something that we’re all grappling with right now.”

Concert industry officials say that auctions will get more fans into seats at a time when almost half of all concert tickets go unsold nationwide. It very well could mean that those $250 face-value Paul McCartney front-row tickets would be priced at double or triple that amount out of the gate, since they’re already being resold for significantly higher prices.

By the same token, prices could drop on seats that often go unsold at the back of concert halls, sports arenas and stadiums

Auctions, the argument goes, would establish starting prices that more realistically reflect the true market value of all seat locations.

The downside is that the whole concept might make musicians look guilty of unbridled greed on the heels of a decade of spiraling concert ticket prices.

Industry executives are quick to note that it’s unlikely all seats to all shows will be sold via auctions. More realistic scenarios would have prices for seats in certain sections determined by auction, with others sold at predetermined prices to give fans the option of which method to use.

But the fear of public backlash is so strong that many in the business won’t discuss their views on ticket auctions. Most are taking a wait-and-see approach, preferring to let someone else be rock ‘n’ roll’s sacrificial lamb.

“Everybody’s waiting for someone to step forward and try it without the charity side,” says one L.A. concert industry executive who asked not to be identified. “A manager who does that could be putting his career on the line. It could be perceived as a brilliant, bold move, or it could be the death knell to that artist’s career. But someone will try it.”

That underlying feeling of inevitability about ticket auctions owes primarily to the thriving resale market on EBay and at ticket brokers. Beyond the issue of ticket scalping, one of the main motivations for trying auctions is the belief that they would create more full houses.

“What they’re trying to achieve is 100% sales,” says Bongiovanni. “It doesn’t do anyone good to have anything left over after the concert, and the feeling is it’s better to get $10 than nothing.”

More ticket revenue isn’t the only issue. “For the venues, there’s a lot of economic upside [to selling every seat] with extra revenue they get from parking, merchandising and concession sales,” says David Goldberg, senior vice president of strategic marketing and development for Ticketmaster, which has recently developed new software permitting auctions to be conducted over its Web site. “There’s a lot of value from the artist’s perspective that, in trying to develop and expand your audience, playing in front of more people is a good thing. And the promoters are also under a lot of pressure and need every body possible in a seat.”

Seats that haven’t been sold by concert time frequently are simply given away to get more bodies in seats in a tradition known as “papering the house,” a practice that theoretically could be eliminated with auctioning.

But despite whatever logical arguments can be made, for some it’s just not worth the fallout they risk.

“We did it for this show specifically because it was a charity event,” said Gayle Fine, who represents the Chili Peppers for Q Prime Management. “I don’t think it’s something we would institute on a regular basis.”

Jim Guerinot of Rebel Waltz Management, which handles No Doubt, the Offspring, Social Distortion and others, also said it is unlikely any of his clients would do a ticket auction unless it were a fund-raiser.

Little of this hand-wringing goes on in other entertainment arenas, from sports to Broadway. Goldberg says there was widespread fear in the concert industry a decade ago when people began moving away from the tradition of selling every seat in the house for the same price.

“People started looking at Broadway shows and saying, ‘Look, they’re charging higher prices for the seats up front -- what if we started charging more for the good seats?’ As an industry we were paranoid that the first 10 rows of seats would go empty because there would be a huge public backlash. But lo and behold everyone bought them. That let to further scaling [of ticket prices]. Now it’s standard to have several price levels.

“Today, people really are worried about what the public will think” of more widespread use of ticket auctions, Goldberg says. “We’re equally concerned about public perceptions. Is this the right thing to do?”

“Ultimately, we live in a supply-and-demand world,” says Pollstar’s Bongiovanni. “Is it wrong for Paul McCartney to sell tickets for $250 if the public is willing to pay that much?”