The Golden Ticket: Artists Make Plays For More Control In Ever-Evolving Market

Stefan Hoederath/Redferns/Getty Images – Got A Golden Ticket:
Tegan & Sara have been offering “pay what you can” donation-based seats at stops on their “Hey, I’m Just Like You: The Tour” to fight secondary ticketing. The twins are seen performing at Huxleys Neue Welt in Berlin Feb. 1, 2017.

With recent approaches to tackling ticketing conundrums – including The Black Keys’ underplay show at Los Angeles’ Wiltern that attempted to prohibit secondary sales and Tegan and Sara accepting donations to fill empty seats at San Francisco’s Sydney Goldstein Theater that were purchased via the secondary market – the balance of power continues to swing between the secondary and primary markets. While artists make moves to take more control in the interests of their fans, the different entities in the ticketing business are figuring out their roles in the ecosystem.

Ticket reselling has been around since ticketed events began. With the legalization of reselling and the introduction of online ticket sales, ticket resellers claimed the upper hand as they took advantage of technology and used automated bots to snatch up millions of tickets. Case in point – U2’s 2005 “Vertigo Tour” in which ticket scalper Ken Lowson used bots to nab hundreds of general admission tickets at each stop during the fan club presale, prompting U2’s Larry Mullen to apologize to fans during the band’s 2005 Grammy acceptance speech.

The primary ticket market has been trying to outsmart ticket scalpers – specifically those using bots – for years, from paperless tickets requiring fans to bring their identification and credit card to the box office to the introduction of Ticketmaster’s Verified Fan technology. Though secondary ticketing is legal in the U.S., with some states like Virginia protecting ticket reselling, the Federal Trade Commission passed the Better Online Ticket Sales Act (BOTS Act) in December 2016 to outlaw the use of computer software like bots.

Of course, enforcement is another matter. A February report by the Distil Research Lab analyzed 26.3 billion requests from 180 domains between September and December 2018 and found that 42.2 percent of ticketing traffic on the primary market is comprised of bots, with 78 percent of bots on ticketing websites classified as sophisticated, with more human-like characteristics.

During the Federal Trade Commission’s “That’s The Ticket” online ticket sales workshop in June keynote speaker Eric Budish of the University of Chicago Booth School of Economics shared two ways to get more stubs directly from rights-holders to fans: more restrictions on resale and initially pricing tickets to market value. The last few months have seen these strategies continue to play out.

The Black Keys’ Wiltern show on Sept. 19 brought attention to Ticketmaster’s new SafeTix technology, which was announced in May and will be rolled out on a broad scale by 2021. SafeTix features a unique, encrypted barcode for each ticket purchase that refreshes every few seconds to prevent the ticket from being stolen or copied. To get into shows using SafeTix, printed tickets and screenshots are not accepted and fans must instead have the rotating barcode on their phones scanned. Fans can use the Ticketmaster platform to transfer tickets to a friend or can use TM’s fan-to-fan resale to sell tickets, with a refreshed ticket reissued and tied to the identity of the new buyer upon completion of the sale.

Except that tickets for The Black Keys’ Wiltern show had the transferability feature turned off, restricting resale. Hundreds of fans reportedly didn’t get the memo ahead of time and showed up at the venue to find their tickets purchased via the secondary market were deemed invalid.

The show made headlines claiming fans were left out in the cold, but a source told Pollstar that staff at The Wiltern worked with fans who stayed to verify their tickets and they were eventually admitted into the venue. Of the 2,050 tickets sold by Ticketmaster, 1,645 were scanned as valid and 405 were deemed invalid, along with an additional 200-300 comp tickets. The venue ended up being nearly filled at 97 percent capacity.

StubHub, which says it sold 542 tickets to the Wiltern show, spoke out against “Live Nation and Ticketmaster’s approach and the negative impact it has on fans” and offered full refunds as part of its FanProtect Guarantee, along with extending a $100 credit to affected fans. A source told Pollstar that Vivid Seats also issued refunds to fans who purchased tickets via the site.

Jeffrey Greenberg/Universal Images Group via Getty Images – Get Your Tickets:
From the streets to the far corners of the internet, tickets are a hot commodity. In this 2006 photo, a man seeks out tickets for the Super Bowl XLI.

The Black Keys explained the non-transferability tactic in a statement explaining that with tickets set at $25 and the 2,300-capacity room being much smaller than the arenas on the band’s “Let’s Rock Tour,” they requested ticket transferability be turned off “to ensure that our fans got in the door at the low ticket prices we set for them.”

Ticketmaster EVP/Head of Music David Marcus acknowledges that the Wiltern show was a learning moment about getting the word out about SafeTix and says that subsequently Ticketmaster issued a formal policy in which the non-transferability setting cannot be activated unless it goes through an approval process that includes a messaging plan to fans and media, as well as formal notices provided to major secondary marketplaces alerting them that tickets won’t be transferable.

“[Non-transferable tickets] is a capability we have with our new SafeTix platform but it is intended to be a very, very, very small percentage of the use cases of that new platform,” Marcus says. “It is not intended to act as a weapon of any kind against the secondary market. It was intended in this instance to deliver tickets to the fans club at a price that was ridiculously low, as evidenced by the prices on the secondary market [reportedly as high as $350].They were trying to avoid exactly what happened.”

Marcus stressed that overall Ticketmaster doesn’t view the big challenge in ticketing as primary versus secondary but the company is instead focused on serving artists.

“The role of ticketing companies like Ticketmaster is to deliver on artists’ expectations on how they want their tickets delivered to their fans. Our job is to give them the tools and technology to deliver on that promise and fan expectation,” Marcus says.

“We are not anti-resale; I think that’s clear just by looking at our business overall,” he adds. “We participate in the resale marketplace. We also recognize that as in other retail industries, there are legitimate roles for brokers. They play a legitimate role in keeping industries healthy, shifting risk. All that said, there is a real imbalance today. It comes because of the scale of profits that are available to professional resellers who invest heavily in technology and other tools to harvest, at industrial scale, tickets that are intended for fans. We are not fighting secondary; we are fighting the industrial scale harvesting of tickets that artists intend fans to have.”

While The Black Keys’ Wiltern show wasn’t without its hiccups, it’s still an example of the power of artists taking control of how their tickets are sold and ensuring the price they set is the final price paid.

Ed Sheeran’s team did this on a larger scale with European dates in 2018 and 2019 by using a “names on tickets” system, canceling multiple orders by known “power-sellers” and policing the entry to stamp tickets purchased via the secondary market as invalid.

“The people who had been ripped off were then offered the chance to buy face value tickets to gain entry to the concerts,” Kilimanjaro Live’s Steve Tilley and DHP Family’s Dan Ealam said in a joint statement. “With the help of VictimOfViagogo we managed to get thousands of people into the concerts at face value whilst also helping them get their money back from these unscrupulous internet ticket touts. The majority of fans were over the moon with our help as many had been conned into parting with huge amounts of money by the pressure sales tactics of these websites.”

The big question is who should get to decide what happens with the seat – is it the artist who’s putting on the show or the person who bought the ticket?

“What has started to happen more and more, one specific player that has a monopoly on the market basically has continued to provide capabilities and restrictions along the way to limit transferability for sellers, unless the transfer is on their platform, and that’s where we fundamentally disagree,” Jeff Poirier, StubHub’s GM of Music and Theater, says. “We think the owner of the ticket should be able to freely resell or gift or whatever it is – it’s their right to do whatever they want with the ticket.”

He added, “Let’s compete on the merits of our product and our customer service, and overall experience. And let consumers decide where they want to buy and sell tickets.”

Andy Donner, Senior Vice President of Music and Corporate Development at Eventbrite, which partners with more than 1,000 independent venues and promoters in the nation, says that with ticket exchanges the emphasis should be on fairness – for venues, artists and fans – as well as security and accessibility.

“For us, that means integrating with platforms like Tixel, Lyte and Twickets, that facilitate reasonable resale pricing controls to ensure valid tickets get into the hands of real fans, and folks that can no longer go to a show can effortlessly get their money back,” Donner says.

While many people vilify the secondary market as taking advantage of fans by snatching up tickets and then jacking up ticket prices, SeatGeek co-founder Russ D’Souza points to a stat from research company Forrester that found about 40 percent of tickest on the resale market sell for face value or less. He says, “Fans can often actually find better deals on the secondary market than at the box office.”

That of course takes us to the question of whether tickets can truly be priced to market, though the industry has certainly been trying with dynamic pricing and multiple price points.

“The real question is are you capturing enough of the value that the artist is appropriately rewarded for their performance, the fan feels like they paid a reasonable price and the arbitrage opportunity for a middle man is eliminated or reduced?” Marcus says.

Less than two weeks after The Black Keys got the industry and fans buzzing over ticketing, Tegan and Sara announced they were trying out a ticket experiment. Although their Oct. 1 show at San Francisco’s Sydney Goldstein Theater quickly sold out in July, hours before the concert there were hundreds of tickets still available on secondary ticketing sites – with the real possibility that many of those seats would remain empty when the twins took the stage. The indie pop duo announced that they would be filling empty seats on a “first come first serve basis” in return for a “pay what you can” cash donation at the door to The Tegan and Sara Foundation to benefit LGBTQ girls and women.

Fans were asked to line up at the venue in the evening, with “rush seating” for the open seats to begin at approximately 8:15 p.m. – 15 minutes after the show was scheduled to start.

“Everyone from Another Planet and Sydney Goldstein Theater were supportive of what we were trying to do and we pulled it off,” Amelia Artists’ Nick Blasko, the band’s manager, says.

After rushing 30 fans into seats at the San Francisco show, Tegan and Sara’s team have successfully continued the method at shows in Seattle, Vancouver, and Edmonton.

“I think artists shouldn’t be afraid to try new things. Managers, artists, agents, promoters should try new approaches to find solutions,” Blasko says. “We tried to land on a simple solution to a complex problem. I don’t know what this looks like on a massive scale, but I know what it looks like for us and it’s working.”