Giving Ticketmaster Credit

A few recent articles regarding ticket brokers and Ticketmaster prompted some interesting feedback, much of which was in defense of the ticketing giant.

– Ticketmaster

Patrick Ryan of Eventellect, a ticket distribution and pricing company that mostly works in sporting events, said he felt like Ticketmaster doesn’t get enough credit for the work it has done to contain scalping.

“Ticketmaster and AXS have done more work in a good way than they get credit for,” Ryan said. “It seems like once every three to four months a big problem hits, but it’s really a low percentage of events where there are a large number of bad actors making a lot of money.”

Ryan said he was observing a trend in the concert industry that fewer shows were selling out instantly, and many high-demand acts still had primary tickets available close to the performance date, a phenomenon that he attributes primarily to better pricing from the artists.

Pollstar got Ticketmaster EVP and Head of Music David Marcus on the line and while he wasn’t interested in addressing particular critics, he was excited to talk about the successes of TM’s Verified Fan system and the company’s efforts to fight bots and scalpers.

“On the combating bots front there are millions of dollars in people and technology being deployed every day to ensure that our system can tell the difference between a human being and a bot in terms of an individual transaction,” Marcus said. “There were 5 billion blocked bot attempts by us last year alone. Across the whole business we sell [480 million] tickets a year. …. We are dealing with this constant onslaught, probing of the system, trying to find tickets that are worthy of a flip.”

Another challenge ticketers face is the growth of the secondary market, Ryan said. In addition to full time resellers, who may coordinate efforts of dozens of human buyers to secure tickets, there are thousands of fans who buy early hoping to make a quick profit.

Despite the volume of bots and more savvy purchasing methods, Ryan attributed the shows where scalping does become a problem to an effect he describes as “leaving meat on the bone.”

“I think some of the artists don’t understand if they don’t [price their ticket properly], someone else will,” Ryan said.

The ticket price is an artist’s creative decision though, Marcus said, and it’s TM’s responsibility to protect that.

“Nothing we are gonna say to Ed Sheeran is gonna get him to price his tickets at $750 (their value on the secondary market). The natural capital law of supply/demand that drives market price, in culture and art, frequently the supplier doesn’t want to give in to that. And nothing should require them to. … So it’s incumbent upon us to find, create and deliver mechanisms that allow them to realize their creative vision.”

Tickets made available on a first-come, first-serve basis will inevitably find their way into the hands of professional resellers, Marcus said, which does not fulfill TM’s responsibility to protect the artist’s ability to price tickets. Even when artists try to balance their pricing by charging more for the close-to-stage seats, compensating by keeping prices in the back low, scalpers will frequently buy up those back seats, he said.

Verified Fan thus represents a shift from time-based ticketing to identity-based ticketing. Rather than focusing on when tickets are made available, the system seeks to know with confidence who actually gets access to a ticket.

If a theater has 1,700 tickets available for a show, Verified Fan wants to make sure each ticket gets to an actual, verified fan with an email address, phone number, and activity history that the system can tell represents a human being. The system also has the capacity to account for each seat in 20,000-capacity arenas and even stadiums, he said.

So far Verified Fan has moved 1 million tickets and been used on 50 tours. Of those, Marcus said he is proud of the fact that fewer than 5 percent of those tickets were resold, seemingly proving that if actual fans get tickets at the artist’s desired price, those fans will mostly go to the shows.

Marcus said he is confident in Verified Fan’s ability to stand up to bots and click farms, as “it’s hard to impersonate being a human who exists in the world. It’s easy to have a new credit card and IP. But being human is hard.”

As for the future of brokers, Ryan’s company, Eventellect, provides an example from the sporting world of how ticket resellers have evolved to fill a new place in the ecosystem. Because many teams want to be focusing their sales departments on season passes and premium seating, Eventellect is essentially outsourced to sell tickets to single, low-demand games. The company purchases inventory from the team to provide guaranteed revenue and then the team is consulted during the resales to make sure the product isn’t being damaged, often with a revenue sharing arrangement.

Through this arrangement Ryan said Eventellect is able to share its experience in different markets and working with different sized teams to help its partners set realistic expectations.