Ticket scalping, also known as ticket touting, is the practice of reselling tickets for popular events at higher prices than their original face value. Many ticket resale sites and brokers engage in scalping as a business. Events with high demand and limited ticket availability, such as concerts, sports games and Broadway shows are common targets for ticket scalpers.
Ticketmaster is a major ticket sales and distribution company that dominates the primary market, working directly with concert promoters and event organizers to sell the initial release of tickets. With exclusive contracts for many major venues and events, Ticketmaster sells a large portion of tickets for high-demand shows and games.
Does Ticketmaster try to prevent scalping?
Yes, Ticketmaster does employ some measures aimed at reducing scalping:
- Limits on ticket purchases – Ticketmaster enforces ticket limits for popular events, preventing automated bots and individual resellers from buying up all available tickets.
- Cancellation of suspicious orders – Orders identified as suspicious scalping attempts may be cancelled by Ticketmaster to make those tickets available for general sale again.
- Banning known scalpers – Ticketmasters maintains a blacklist of known scalpers and regularly prevents them from purchasing tickets.
- Paperless tickets – An electronic restriction requiring ticket buyers to show the credit card used for purchase along with ID to gain entry, preventing resale.
- Dynamic pricing – Adjusting prices higher for very high demand events limits profit margins for scalpers.
However, Ticketmaster also facilitates a major secondary ticket market through its own resale services. The effectiveness of its anti-scalping efforts are debated.
Ticketmaster’s Resale Services
In addition to primary ticket sales, Ticketmaster also operates several large secondary market ticket exchanges:
- TicketExchange – An online resale marketplace for Ticketmaster customers to resell event tickets they can’t use.
- NFL Ticket Exchange – A Ticketmaster-owned exchange specifically for NFL tickets.
- TM+ – A resale platform for last-minute Ticketmaster tickets.
Ticketmaster states these exchanges provide safer, guaranteed resale services for customers. However, many critics argue Ticketmaster facilitates scalping through these services.
Ticketmaster Fees on Resold Tickets
Ticketmaster collects fees on the original sale and additional fees on resold tickets. This may incentivize Ticketmaster to allow more reselling through its exchanges:
| Ticket Price | Original Fees | Resale Price | Resale Fees |
|---|---|---|---|
| $100 | $20 | $250 | $50 |
As this table shows, Ticketmaster can gain significantly more fees by facilitating resales at higher prices through its exchanges.
Direct Partnerships with Large Scalpers
Ticketmaster has official resale partnerships with large ticket brokers who engage in massive scalping operations:
- Vivid Seats – A large secondary ticket market with Ticketmaster partnership since 2010.
- StubHub – Became an official partner in 2019 after being acquired by Ticketmaster’s owner Live Nation.
These partnerships demonstrate Ticketmaster is willing to work with professional scalpers when financially beneficial.
Anti-Scalping Measures
While profiting from its own secondary resale services, Ticketmaster does utilize some anti-scalping efforts:
Purchase Limits
Ticketmaster enforces mandatory limits on how many tickets a customer can buy for popular shows and games. This can help prevent single large orders from resellers:
- 4-6 ticket limits per household are common for major concerts.
- Limits as low as 2 tickets per person for massive events like Super Bowls.
However, resellers use multiple credit cards and accounts to circumvent these limits.
Cancelling Suspicious Orders
Ticketmaster’s order processing system checks for indicators of scalping bots or reseller purchases. Suspicious orders discovered are cancelled and tickets released back for general sale:
- Orders from known reseller credit cards and accounts
- Large purchases within seconds indicating bot use
- Multiple purchases from the same IP address
But scalpers adapt tactics to mask purchases and still trick the system.
Banning Known Scalpers
Ticketmaster does systematically block some brokers from purchasing:
- Blacklists of addresses, phone numbers and credit cards linked to scalping.
- Blocks on prepaid gift cards favored by resellers.
- Targeting commercial locations used as broker pick-up sites.
Yet scalpers create new accounts and find workarounds. Large broker operations still easily funnel significant volumes through Ticketmaster.
Paperless Ticketing
For very high demand events, Ticketmaster enforces paperless ticketing requiring ID verification and the original credit card used for purchase. This prevents resales:
- Fans must enter with both the physical card and valid photo ID matching ticket order.
- Tickets can’t be resold as buyers won’t have the required credentials.
Paperless ticketing successfully eliminates scalping but is not widely used due to customer complaints and venue policies.
Dynamic Pricing
Ticketmaster utilizes demand-based dynamic pricing for extremely popular events where tickets sell out instantly. Prices adjust upwards in response to market demand:
- Helps limit profit margins for scalpers who can’t buy at low initial prices.
- Higher prices deter some fans, reducing scalpers’ customer pool.
But this model has drawn criticism from fans against dramatic price spikes Ticketmaster controls. Scalpers still profit from even dynamically priced tickets.
Does Ticketmaster Want to Prevent Scalping?
The effectiveness of Ticketmaster’s anti-scalping efforts is debated among industry experts:
- Some argue Ticketmaster’s limits have reduced large-scale scalping from dominating primary sales.
- Others contend Ticketmaster does not seriously want to stop scalping given its significant resale operation.
A few factors indicate Ticketmaster may tolerate some scalping as part of its business:
Generates Profits from Resale Fees
Ticketmaster generates substantial added revenue through fees on its ticket resale exchanges. This may reduce incentive to crack down on scalping that supplies its secondary market inventory.
Resale Platforms Increase Revenue
Ticket scalpers shifting sales to Ticketmaster’s resale platforms allows them to gain a share of the lucrative secondary market Ticketmaster was previously excluded from.
High Prices Normalize Rates
Very high scalped ticket prices reset public perception of a ticket’s expected resale value and make Ticketmaster’s own prices seem more reasonable in comparison.
Scalping Indicates Demand
Rapid sellouts and thriving reseller activity signal significant consumer demand and interest Ticketmaster wants to capitalize on, even if enables some level of scalping.
Effects of Scalping
Industry debates continue around the impacts of ticket scalping and reseller markets:
For Fans
Many fans complain scalping makes tickets unavailable and unaffordable due to:
- Instant sellouts from large reseller purchases.
- Huge markup creating price barriers to attend favorite events.
But some economists argue an open secondary market gives more options to fans who can pay higher prices if willing and able.
For Artists
Performers and teams are deprived of some revenue from tickets reselling at higher prices. But guaranteed sellouts also benefit from the appearance of high demand.
For Venues
Rapid primary sellouts indicate venues are underpricing tickets and could earn more revenue from initial sales with optimal pricing.
For the Market
Scalping provides price signal data on real market demand not captured in artificially low capped prices. This can lead to a more efficient market equilibrium.
However, unchecked scalping could over-incentivize speculative hoarding of tickets.
Conclusion
In summary, Ticketmaster does implement some policies aimed at deterring large-scale automated scalping of its primary ticket sales. But major secondary ticket resale markets still thrive through Ticketmaster’s own broker partnerships and reseller exchanges. This enables substantial scalping activity to persist despite anti-scalping efforts.
There are sound business reasons for Ticketmaster’s current balancing act between restricting rampant scalping while still profiting from a secondary market it supplies. The ultimate merits of this approach remain controversial, with arguments on both sides for reseller markets increasing options for fans versus distorting prices.
In the live event ticketing ecosystem, some degree of scalping appears an inevitability Ticketmaster has chosen to adapt to rather than eliminate entirely. The effectiveness and sincerity of Ticketmaster’s efforts against scalping can continue to be debated as long as its primary and secondary ticketing operations coexist in their current forms.
Ticketmaster’s policies have likely deterred the most aggressive scalping abuses but far from eliminated the practice entirely. For the foreseeable future, ticket scalping seems likely to endure as a point of friction between fans, artists, venues and Ticketmaster itself.
Beyond just Ticketmaster, larger questions remain on the appropriate regulations and structure of secondary ticket markets in the modern online era. As long as high demand and limited supply create opportunities, for-profit resellers will seek ways to exploit inefficiencies in the ticketing space. The cat-and-mouse game between Ticketmaster policies and determined scalping operations has no simple resolution in the best interests of all stakeholders.
But improvements allowing more fans initial access at fair prices would mark a step in the right direction. This could require Ticketmaster to more tightly regulate its resale platforms, enhanced security to enforce purchase limits, and dynamic pricing on par with true demand. Such measures could help reduce scalping incentives and improve efficiency. But entertainment ticketing will likely remain a flashpoint for these ongoing debates over fairness, access, and optimal pricing in live event markets.
