New York State put a law on its books this week making operating “ticket bots” illegal:
using ticket bots, maintaining an interest in or control of bots, and reselling tickets knowingly obtained with bots constitutes a class A misdemeanor. As such, violators could face substantial fines and imprisonment
As someone who has often lost out on tickets and was forced into the secondary market at double the price (or more), I appreciate the effort here to curb this abuse of the system.
But I do wonder if there are technical or market based solutions that would be more effective. And I wonder how New York State is going to enforce this new law.
A market based solution could be some sort of auction mechanism that effectively sells the tickets at “market value” and takes the profit out of scalping. Of course the effect of that might be to increase the cost of tickets to everyone and that might not be ideal. If that were paired with some sort of discount for fans and/or fanclub members, you might be able to keep the prices affordable for real fans and take the profits out of the scalping business.
Anyway, I am not griping about this new law. It could help at the margin. But I do yearn for a more elegant and market based solution that fixes the issue more systemically.
Happy something is being done, but I agree this isn’t the answer. Ticketmaster could have done more over many years, but it isn’t in their best interests– they sell tickets– and some people want to buy thousands at a time.. great!Then you have the artists who are all up in arms about these bots, yet sell through Ticketmaster and don’t give Ticketmaster any slack.Kind of wish someone would simply empower me with these tools– I’d pay. Basically like eSnipe for eBay- if the bot gets you the tickets, you pay a small fee. Not a long-term solution, but better than what I have now.
I hate Ticketmaster and Grubhub for that matter. But we have no other choices. They are the tickets monopolies.
The artists can impose restrictions but most of the time choose not to (or their management team choose not to). Follow the money trail and the original ticket issuers are also making the secondary market…
Yup. A case of fast regulation instead of right regulation. It would have been better to license “ethical bots” and just ban the bad ones.
Cuomo doesn’t have enough time with all of the parades he is marching in to really dive to deep into this issue.
This seems to go directly against “the right to be represented by a bot” that Albert often talks about.We are seeing a lot of push back to technology because of the lack of our ability (or mindset) to compete these days…I understand why but I think fighting it with laws (or elections based on unrealistic campaign promises) is an expensive and dated approach that ultimately won’t work.Automation is now a part of our evolution – we can kick, scream, and try to fight it…but it’s going to (eventually) win.Our energy would be better spent figuring out how to use it as a new strength, how it can augment our daily lives, and what we can/should do that can’t be automated….even if it does mean missing out or paying a little more for tickets right now…
These bots are correcting the price due to an inefficiency of the issuer to market them at market value. The only solution is to allow them so that the issuer understands the missed revenue and learns how to market them properly. Be it through an auction or something else. If people are paying double the price it’s because to them it has that value, otherwise they wouldn’t be able to sell them and prices would go down.
See my comment. One of the reasons driving the demand is scarcity. Take that away and revenue eventually plummets.
the real problem with bots is not speculation by the bot owner, but the ammount of tickets they can get their hands on (which leads to, like @philipsugar:disqus says: scarcity). The only way the market can correct itself is if few people stop getting access to that many tickets and, with them, being able to speculate with price like they do.
Still, if people pay those high prices it’s because those tickets are at least worth so much to them
I think something more along the line of making the tickets be linked to an ID. The person who buys the ticket has to show up to the gate to get the ticket or the ticket is your ID. Possibly a system that determines how often the person who buys the ticket shows up to the gate. So over time there is an idea of who is truly a fan, and who is only buying to resell.(This would help account for gifts/ just couldn’t make it the day of the concert) Allow that person a level up in the buying process?
The Philadelphia 76ers are the first pro sports team headed in the direction of finding real market value for every ticket pre-secondary market by selling 100% of its tickets on stubhub: http://www.nba.com/sixers/n…
better get those tickets before embiid starts playing full games! #trusttheprocess
When you have nothing to lose because that is all your team does you can do that. I can be at the stadium in 30 minutes but I wouldn’t go to a game even if you paid me. 🙂
Northwestern University did some experiments with dutch auctions to find the market clearing price for some Big Ten games in 2014. See the bottom half of this http://www.chicagobusiness….It will take some time for consumers to become acclimated to higher prices for more popular events but I feel sure the market is moving in this direction and we’ll all have to get over our feelings of ‘unfairness’ when paying top dollar for tickets to popular events.
I have been around this business for 20 years. I don’t think it is that simple. Really what they did was just increase prices.The problem is this:1.Scarcity drives demand: You see this every Christmas. There is some “hot” toy you can’t get and the fact that you can’t get it makes you want it even more.2. You lose your base because they know they can’t get the “hot” tickets the only ones they get are the “shitty” ones, they stop going. (see what happened to NASCAR)Look if the Cubs said we will price playoff tickets at what the market would bear, two things would happen.1. They would make a ton more money on the playoffs.2. When they suck which they historically have they would lose their base.Losing your base is devastating. The NFL is WORRIED. Why? Look what happened to NASCAR. It’s so bad they don’t even release attendance numbers anymore. But ISC is publicly traded: attendance revenue is down 50%. 50% from 2012.
Interesting. I didn’t know that about Nascar. Not that I ever knew much about Nascar.That said I wonder if this actually is the ‘who needs stamp collecting’ effect. Meaning young people simply have to many things to get distracted about today and a car race just doesn’t seem that interesting when you can get a thrill from video games among other things. Not that your other point isn’t valid as well but I think many things are less attractive today simply because there are so many alternatives.
I am telling you I have looked at this a ton. If you know you can get a great seat the day of at the same price as a month before, you will wait until that day.If you the venue or organization, decide to do variable pricing you are sending a clear message: That seat which really has no intrinsic value is worth less.
By the way this is also the reason that taking negotiation out of car buying is a non starter for auto sales even though many people think it’s a good idea (those that can’t handle a car salesman). Why decide today if you can wait? (Then you need inventory decisions to control and have people act impulsively.)People need a reason to get off the fence and make a decision. I’ve closed many deals in December simply by using the ‘end of year tax reason for selling/buying’ excuse. Even though it’s by and large fabricated. But people fall for it because it sounds like something that makes sense.
Scarcity drives demandAnother example. Bob Dylan (and Barbra Streisand to a lesser extent).”Unfortunately, Bob Dylan will not be at the White House today. So everyone can relax,” Obama’s top spokesman, Josh Earnest, told reportershttp://thehill.com/blogs/bl…Nothing is a better example of the expression “Ask me if I care”.
*The perception of scarcity drives demand.
Yes, yes, yes!!!
For those who like sports analogies, it’s the same reason you see Quarterbacks going 1 and 2 in the draft the last two years.
As you note, the reason resellers exist is because the price is below market value. That means today tickets are in a way subsidized.The right questions are:- do the stakeholders want to subsidize tickets?- who do they want to subsidize? (today is everybody or actually the quick buyers, you proposed to be subsidize the true fans)- is there a way to prevent the buyer to profit from subsidized tickets? (example: issue tickets with the name of the buyer)
Fans are contributing big time to everyone’s experience at a show, so artists and sport teams need them. These fans may not be able to pay the highest prices (and artists don’t want to come across as greedy), which leads to the current problem.So the question is more like how can you identify your biggest fans who are valuable beyond the ticket price? Fanclubs like you mentioned may be one idea, but maybe hard to scale. You could offer ticket discounts based on Spotify/Pandora/Apple Music listen counts, which should be a very effective way to reach your real audience.
Agree. Enforcement solutions that drive activity further underground don’t typically work – if there is $ to be made on a black market, then the re-sellers will adapt and find another way to evade detection. A market based auction solution is a great idea. I question whether the original event ticket sellers have a motive to join it. They would have to make more $.
I think you’re right but I do believe that in order to effect real change, we’re going to need some sort of enforcement action capable of breaking up TM/Live Nation’s federally ordained monopoly over the primary ticket market (estimated at 80% market share pre-merger). Of course we would love to have a more efficient system that is both equitable and able to either gauge or account for demand but because TM maintains restrictive exclusive contracts with their clients that the courts have upheld in the face of antitrust scrutiny time and again, it’s unlikely that legislation like this is going to really disrupt the status quo. I’m banking on an activist AG like Schneiderman to challenge Ticketmasters antitrust immunity because it’s unlikely the Jeff Sessions-led Justice Department is going to make this a priority at the Federal Level. We have antitrust laws that are over a century old that aren’t really applicable in a modern economy so enforcement solutions are going to be necessary in order to provide a real shakeup.
If Governor Cuomo deems this type of front running illegal, then a look at HFT practices may be warranted. This is by far, of much more concern!!!
Sadly this change won’t do a thing. The fine is meaningless and it will be some time before they even figure out how to properly find out if people are even using bots.
Fred, check out Le Poisson Rouge (the former Village Gate) just down the street from you. They use the solution you want. Paperless ticketIng. If you buy the ticket, you have to show up. You can’t sell it to someone else. Works just fine. But the big music acts won’t do it. Do you know why? The bands get blocks of tickets at face value and resell them on stubhub themselves. Yes they really do fuck over their own fans.
Dutch auction model?
Why are tix for the Nets or Kanye scarce goods? Some of it is because the market has been ‘managed’ by the owners and the artists. The underlying reason is that scarce goods are becoming (somewhat) more scarce. A pair of shoes for $20 (in 1980 dollars) and pair of Russian coders for $150 a day (in 1980 dollars). People want what is still scarce just because it’s scarce. Not a big problem for those of us who don’t need to watch the Jets lose in reallife. But as healthcare becomes much more ‘market-based’ in the next four years it will be a much bigger deal. One that Mr. Market won’t solve.
Tie tickets to a persons name and kill the secondary market. You can’t get in unless your ticket matches your ID.
The ticket issuers (and the artists themselves) have many ways reduce ticket scalping/touting…this is one of the easiest for them to implement. Unfortunately the ticket issuers make a lot of money from the secondary market as well.
That is what they do in Europe. The downside however is that now you really don’t own your season ticket. You can’t resell it when you go to Lego League.It’s a tough question. Actually the people selling tickets as David points out do actually benefit from scalping. It increases demand which reduces supply, if you know you can buy a ticket last minute demand goes down. If you know you need to buy it immediately it fuels demand.
The only reason this issue is being discussed is because there are whiners on both sides. On the one side you have the artists and the venues who are upset that they can’t extract maximum value out of the tickets and put it in their own pocket. On the other side there are people that would like to attend the shows but can’t afford to do so. And they are upset that someone else is profiting more than they think they should from their all important entertainment. As if it’s a hospital bed and healthcare. And a constitutional right or something.
Adding on @philipsugar:disqus comment – this increases the opportunity cost for the primary ticket buyers because reselling your ticket becomes much harder. The operators of Roland Garros mandate that tickets are purchased through them, and their website crashes when demand spikes from tickets being released for sale/resale. I went through AmEX Concierge to buy tickets for Roland Garros without which, it would have been impractical for me to buy tickets because of the way they handle sales and resales. On top of that, I still paid a high mark-up.
Then it becomes like airline tickets. For security purposes that makes sense although even that problem could be solved. How do you like having to book a trip and then have to buy insurance in case you have to cancel the trip and still have rebooking fees and costs because you can’t sell your ticket? For me being able to do that could potentially boost airline revenue if offered on non packed flights. The reason is you could book a ticket with at least the idea that you could sell it if you couldn’t take the trip later.
Through a phone, and NFC.
Hope they don’t go to the NYSE and see what the bots are doing to stocks. : )
Problem is, with tickets going to the correct market price, it squeezes out the real fans and replaces them with corporate buyers, destroying the feel of the event. Look at the lower bowl (particularly platinum) seats at a Maple Leaf game. They are vacant for the first 5-10 minutes of a period. The seat holders are in getting their sushi (would love to see an IOT solution track seat usage). Go to a Red Wings game, and you have the lower bowl filled by real fans focused on hockey. The likely viable solution is to attach the buyer to the ticket and have a mechanism for buyback in the event the buyer cant go. The after market upside is controlled by the team. This could work for seasons ticket holders as well.
Great I am glad you now gave me a definition of what a ‘real fan’ (question I posed elsewhere). On a more serious note why is the ‘real fan’ more deserving because he is sitting in his seat and not buying sushi? Seriously why?  I mean for gods sake it’s fucking entertainment nothing more.
Fix what issue exactly? Bots or the secondary market in general? Bots are terrible but could be solved by Ticket Master and other primary ticketing systems. As someone else already pointed out they make money selling tickets. Now with their own secondary marketplace, they stand a chance of making money not only on the first sale but the second, third an so on.Bots and the secondary market are two completely separate things. Legitimate brokers are most often active partners with the team/club/artist. They provide services to the primary ticket holders (liquidity / risk mitigation / distribution). The secondary market is THE market. Whether its a $3 Mets ticket on a Tuesday(below face) or a $1800 Hamilton ticket(above face), thats what the market is willing to pay. The “primary” market is a combination of primary ticket holders not knowing what their product is worth and a public relations tool. Even when a club or artist knows the value of their ticket is 10X what they end up selling it for during a public on-sale they can’t appear fan unfriendly. So they’ll take huge chunks of that inventory and sell it directly to the secondary market at 6X and only release a small % of the tickets during the on-sale. Hey, they own the tickets and have every right to sell them how they like.
“Hey, they own the tickets and have every right to sell them how they like.”Then they should be transparent with what they’re doing. Tell the buying public how many tickets they are holding back, as well as inventory avail via AMX, Citi pre-sales and to fan club members. Don’t delude the public and contribute to the perception it’s a level playing field, when clearly it’s not. Without full inventory transparency artists, promoters and venue operators are part of the problem.
What’s up Greg. Couldn’t agree more, TM rules the roost and unless they decide that they want to implement a more equitable system or Johnny Law finally decides to crack down on their monopoly or their indifference towards bots, nothing is going to change. In fact if you like to TM/Live Nation’s own 10-K they actually mention that one of their core business practices includes negotiating with individual brokers to post tickets on their secondary platforms. The interesting thing as far as this practice and the NY Law is concerned is the fact that TM is in a unique position to know whether a ticket was purchased via automated software or “Bots” and if those tickets end up on their secondary platforms, its’ going to be up to the AG’s office to drop the hammer. If not, the legislation is essentially toothless.
Understand Ticketmaster is the one who wants this deal.
I guarantee you they were throwing around significant $$$ lobbying Albany. The ball is in the AG’s court to decide how and to what extent to enforce the law. One other thing that has gotten lost is that the statute enables individuals to sue in private actions for damages under the law so it will be interesting what kind of litigants come forth and who they choose to sue.
Louis CK tries to manage this for his shows. He does not allow secondary markets to sell tickets.
Canadian fun fact… Scalping is legal in Canada. 😉
If that were paired with some sort of discount for fans and/or fanclub members, you might be able to keep the prices affordable for real fansWho is a ‘real fan’? And what’s the ‘certification’ process for that?  Isn’t that just another form of ‘you snooze you loose’ as right now the system is tilted toward the early bird or person with more and better resources. Is this going to be like TSA Pre-check? We figure out a way to ‘certify’ and give a better seat to someone who has followed a band for many years vs. a new fan? That’s fair?
and take the profits out of the scalping businessWhy? Is the scalping business any less legitimate than, say, high frequency trading or any other business?
Unless there are shorts on the ticket resale market, ticket scalping is more legitimate because the bots have to risk money.
But I do yearn for a more elegant and market based solutionThere is already a market based solutions that rewards people who have more money. It’s called scalping.
As someone who has often lost out on tickets and was forced into the secondary market at double the price (or more)You know I gotta tell you (as your therapist) that one of the reasons to beat your brains out, make money, and work so much is so that things like that won’t bother you.I am reminded when I was younger and newly married for the first time. My ex father in law made me wait to go out on his boat while he finished watching a tennis game on tv (on a beautiful Saturday or Sunday). Not only that but the night before we slept in a makeshift ‘room’ at his shore house (to many people) .Problem? No I thought ‘I am just going to get my own place and my own boat so I don’t have to rely on him’. And of course I did. I just spent my own money which I had earned and solved that ‘problem’. He pinned a sheet up to give us privacy literally with push pins in a masonry wall that fell out. Kinda the way he rolled.
Irrespective of the buying mechanism, face value tix pricing (not the secondary market) on both concerts and sporting events is ridiculous. With respect to concerts, artists today can’t make a living on royalties, their bread and butter is touring and merch. Local union requirements contribute to price escalation. With regards to sporting events, escalating pro league salaries, which get passed along to the buying public, make attending for most families unaffordable. And MLB wonders why their fan base skews old and white. If they truly had a long term strat for building fan loyalty they’d devise a system where blocks of more affordable tix were made avail for students, blacks (very low attendance), low income families, etc. With better community outreach they could easily target these groups geographically. Unfortunately, like most biz today, it’s all about short-term rev and profit, and often that is in conflict w/ legit brand building.
As others have pointed out, the problem is that there is an imbalance between supply-and-demand, since the face value on the tickets is below the market equilibrium. Bots are simply a tool used by the secondary market (the brokers) to buy tickets efficiently.What offends many people is that the ticket brokers take these additional profits, not the people who produce the entertainment. This is particularly bitter for arts groups, which operate on a tight budget.
I hate the practise of bots buying all the tickets but I don’t understand how you can philosophically support this law. Isn’t this a precedent for preventing robots from doing human work? Ban Reselling. I don’t see how anyone can make an argument to ban efficiency.
Artists, promoters and venue operators withhold huge chunks of inventory for pre-sales, fan clubs and distribution to secondary sellers thereby reducing supply and artificially inflating demand. They’re all part of the problem! Inventory transparency is needed. If MSG holds 19K for a concert let the buying public know how many tix are legit avail for sale on the open market.
In the UK we have Twickets https://www.twickets.co.uk/ -“enabling fans to trade tickets at face value or less”. The seller can add up to 15% to cover the original booking fee. They charge the buyer 10% of selling price. They are crowdfunding at the moment: https://www.seedrs.com/twic… (capital at risk etc!)
In the US we have SeatSwap. https://seatswaptickets.com/. Which allows users to not only trade tickets but do so at real time market value and does not cap the cash you can add or request as part of any trade.
Solving this problem has been our team at TikTiks obsession for the past 2 years. We started as a fan-to-fan marketplace that allowed verified Season Ticket Holders/Fan Club holders to sell unusable tickets to last minute buyers leading up to the event. This got the attention of local teams/artists and we are now working on a direct-to-fan and fan-to-fan platform for teams, artists and venues to internalize/manage their own secondary ticket market. It gathers data about last minute sell/buy behaviour and allows the artist/team to release tickets at optimal/market pricing to control the supply and demand of their own tickets and capture revenue/data that would otherwise be out of their hands. We are currently raising angel funding if you’re interested in learning more, Fred. :)https://uploads.disquscdn.c…
I’d like to see a ticketing system that simply changed ticketing licensing terms to forbid resale. What if your ticket was tied to your name and required valid ID to use?That might feel too restrictive if you’re unsure you can make an event, so perhaps an event venue could redeem tickets at face value (or 90% of face) up to 24 hours before the event.But as long as tickets are sold to the people who will use them, I’m optimistic that pricing will net out fairly for all parties because the value captured by resale will be redistributed.
this Cuomo dude, is he bought by NYC’s vested interest elite? Seems to be handing out new laws favouring incumbents every week like confetti.Political dynasties are VERY BAD FOR DEMOCRACY.
Twitter will suspend Donald’s account if he violates it’s policies.Does that not infringe his freedom of speech rights?
No. Twitter is a private business that can decide what they allow.
So Twitterland has its own Constitution and when one enters its sovereign territory the terms of the US Constitution are revoked? Then Twitter users cease to be US citizens. On that basis Donald will not be tweeting Potus tweets. He will be merely a twitizen. That’s a load off for the neo liberal elite.
We’ll see how the courts decide whether Twitter is a private club or a public service. Considering that the Republicans will control the White House, Congress and appoint judges, I expect they will avoid regulating Twitter – unless it inconveniences them of course.
Why not require a name, but also make a bigger push for the insurance option or a “flexible” option where you pay more to be able to resell in a controlled environment. Pay face value for tickets that you know for a fact you are going to use and pay a premium for those which you aren’t sure of…
b2b2c2s2cYou pays your money, you takes your choice.
Good topic.Odd remedy to see ‘State Law,’ insert WTF Reaction.I understand how reading about State Law may inspire a post on a seven-day-per-week schedule where it’s helpful to have a topic (any topic) around which to post.But we have so (so) many analogous examples in ecom and other marketplaces (the focus of USV’s thesis), that this post feels very ‘phoned in’ and there has to (has to) be better solutions than ‘thank God for NYC State Law,’ which we know will be weak,Love you, love the topic and love the spirit, but come on.
TicketSwap in Europe solved this problem quite well 🙂
Ok guys I should know my name is Ken Lowson and I used to own Wiseguy Tickets (look it up). Here’s the bottom line, the old Boardwalk Empire ticket rules do not work anymore we live in a Wikileaks world. 21st Century ticketing means the old nonsense of Wristbands, Ticket Limits, CAPTCHA’s, Ticket Bots as ways to make Artist/Fans believe it’s not corporate ticket interests manipulating things to justify their existence cannot stand when Social Media drives the law and politics. Trump won because of this. All that is needed is that the Creators take control of their flagship product (tickets) and redirect Fan Spemding power from a forced arbitrage (Scalping) to buying what the want (Creator Profir Generators). This can only happen once the feedback loop of thinking wholesale (Primary) and retail (Secondary) are moved closer by Creators controlling tickets to ensure Fan spending power goes where it really wants. For all the so called economists who think tickets are a normal commodity tell me that when it’s a once in their life seat to the Nobel awards. Emotional purchases are never logical brain guys. Jesus my nine year old can figure out better she said to me let the Fans scalp to Fans and make a ticket a T-Shirt. She’s right let it be 2000 mini Scalpers versus really one monopoly cow with 50 calves sucking tot. It would disperse, drive down a Scalp profits, still sell out just the same and at least get to the customers of the Creators (who would spend it on Creator Gear, Fan Clubs, VIP Access, Autographs etc). Oh and your marketplaces would survive instead of a law written to benefit a monopoly. Doesn’t everyone know monopolies benefit government old power the most they love it! Bottom line there is no need to hype events to sell out in 2016, nor is there a need to make Scalps pay for all the marketing (ever seen a billboard for a hot show) just overpopulation ensures sell outs. Like Uber and Taxies, bring the service to the customer using consumers the middle is not needed anymore. It’s an e-ticket no need for printing gonna be your phone scanned world anyway.