Ticketmaster is the largest primary ticket outlet and ticket resale marketplace in the United States. There has been speculation over the years that Ticketmaster works with scalpers or facilitates scalping in some way. Let’s take a closer look at Ticketmaster’s policies and operations to try to determine if and how they might work with ticket scalpers.
What is ticket scalping?
Ticket scalping refers to the practice of buying tickets to concerts, sports events, theater shows, etc. with the intention of reselling them for a profit. Scalpers typically buy up as many tickets as they can when sales first open, often using bots or other software to automate the process. They then resell the tickets, usually at much higher prices, on secondary ticket marketplaces.
Some key characteristics of ticket scalpers are:
- They have no intention of actually attending the event themselves.
- They use methods like bots to quickly buy up large quantities of tickets.
- Their goal is to profit from immediate resale of tickets at inflated prices.
- They reduce the availability of affordable tickets that average consumers can buy directly from the box office or primary ticket seller.
Scalping is legal in many parts of the United States, though some states do have laws restricting it. Critics argue that scalpers unfairly drive up prices and make it harder for fans on a budget to attend events. Supporters counter that scalping provides a secondary market for tickets and allows people who truly value events to purchase tickets even if initial sales are sold out.
Ticketmaster’s background and business
Ticketmaster is a ticket sales and distribution company based in Beverly Hills, California. It sells tickets for concert, sports, and theater events on behalf of event organizers and venues. Ticketmaster has exclusive ticket-selling agreements with many major venues and promoters.
Some key facts about Ticketmaster’s business:
- Founded in 1976 in Arizona
- Merged with Live Nation in 2010 to become Live Nation Entertainment, though still operates as Ticketmaster.
- Estimated to sell over 400 million tickets per year through primary and secondary sales.
- Has exclusive agreements with over 200 major venues and promoters for primary ticket sales.
- Owns or operates several major secondary ticket marketplaces including NFL Ticket Exchange and Ticketmaster Resale.
Ticketmaster has faced controversy over the years for its high fees and market dominance. It has been frequently accused of abusing its position to charge exorbitant fees and stifle competition. The company claims its fees are reasonable to cover operating costs.
Does Ticketmaster work directly with scalpers?
There is no definitive evidence that Ticketmaster directly coordinates with scalpers or assists them in buying large quantities of tickets. However, Ticketmaster has engaged in some practices that seem to facilitate large-scale ticket purchases:
- Verified Resale Program – This was a short-lived program in which Ticketmaster recruited professional ticket brokers to resell tickets on their resale platforms. Ticketmaster said the program was intended to provide a secure resale marketplace but dropped it after public backlash over enabling scalpers.
- API access – For a time, Ticketmaster provided application programming interface (API) access to ticket brokers that allowed them to buy tickets in bulk for resale. Again they discontinued this after criticism it was essentially enabling scalping bots.
- Price floors – Ticketmaster has agreements with some event organizers to enforce price floors on tickets sold through their resale marketplaces. This guarantees tickets won’t be resold below face value and helps protect scalpers’ profits.
While Ticketmaster has claimed these policies were to provide a safe, regulated secondary ticket market, critics saw them as methods to enable large-scale scalping and ticket speculation.
Does Ticketmaster benefit from scalping?
Based on their business model, Ticketmaster likely derives some benefit from ticket scalping even without directly participating:
- Double fees – Ticketmaster collects fees both on the initial ticket sale and then again when the ticket is resold. Scalping increases resale volume and therefore resale fees.
- Guaranteed sellouts – Scalpers likely help many events sell out more quickly by snatching up excess inventory. This makes Ticketmaster and event organizers look more successful.
- Higher resale prices – Scalpers resell tickets at higher prices than face value, providing revenue for Ticketmaster on their percentage fee on each resale transaction.
Estimates suggest Ticketmaster may make hundreds of millions in revenue from secondary ticket sales. This resale revenue stream relies on scalpers to drive volume. Some see Ticketmaster’s incentives as misaligned with fans – they benefit most when tickets are resold at higher prices even if it means fans pay more.
Does Ticketmaster facilitate scalping in other ways?
In addition to the verified resale and API programs mentioned above that were discontinued, critics of Ticketmaster point to other ways they facilitate large-scale ticket buying:
- Lack of ticket limits – Ticketmaster does not impose any ticket purchasing limits during initial sales. This allows scalpers to buy up hundreds or thousands of tickets using bots.
- Bot detection failures – Despite claims of using bot-detection tools, Ticketmaster seems unable to stop large bulk buys that shut out everyday fans from popular events.
- Timing of ticket releases – For high demand events, Ticketmaster has moved from single sales openings to staggered releases. Critics contend this is done to double dip on fees by letting scalpers buy first.
Ticketmaster claims their lack of ticket limits gives more freedom to fans and they are steadily improving bot detection. However, many feel their failure to stop bulk scalper purchases implies they are not trying very hard – or that they benefit from allowing it.
Has Ticketmaster formally addressed scalping accusations?
Yes, Ticketmaster and their parent company Live Nation Entertainment have issued several public responses to accusations they facilitate or enable ticket scalping:
- They say the verified resale and API programs were attempts at regulation that were discontinued due to public misperception.
- They claim the price floors on resale tickets are also an attempt at consumer protection, not scalper protection.
- They point to their efforts to invalidate tickets purchased by bots and expand fan ticket verifications like Ticketmaster Verified Fan.
- The company says they are constantly working to improve bot detection and levy “hundreds of thousands of tickets” cancellations against brokers.
However, many fans remain skeptical of these positions and feel the company’s actions and policies still align more with scalpers’ interests than average fans and ticket buyers.
Have any legal actions been taken?
Yes, Ticketmaster has faced some legal challenges related to its alleged assistance of ticket scalping and opaque operations:
- In 2019, they paid a $4.5 million settlement centered around allegations their murky fees and processes violated consumer protection laws.
- Some suits have accused Ticketmaster of turning a blind eye to scalper bots in exchange for fees on the subsequent resales.
- A 2021 lawsuit alleges violations of antitrust law through Ticketmaster’s exclusive deals with major venues shutting out competitors.
However, Ticketmaster so far has successfully defended against suits directly alleging they actively enable or coordinate with scalpers. Claims of antitrust violations related to their industry dominance may pose a bigger legal threat to their business.
What measures has Ticketmaster taken against scalpers?
Ticketmaster claims to be constantly improving their policies and tools to restrict scalpers and bot activity. Some measures they say they have implemented include:
- Fighting bot traffic with CAPTCHA tests, IP monitoring, and other verification checks.
- Cancelling orders identified as bulk scalper buys.
- Banning users and voiding tickets identified as scalpers.
- Limiting ticket transfers to block scalpers reselling outside their platform.
- Using machine learning algorithms to better identify suspicious activity.
However, many fans still feel these measures are insufficient or ineffective in actually stopping scalpers. The ongoing prevalence of instantly sold out shows where tickets immediately appear at inflated prices is seen as proof of this failure by critics.
Conclusion
There is no smoking gun evidence of Ticketmaster directly colluding with professional ticket scalpers. However, many of their policies and lack of effective action against bots appear to enable large-scale scalping that serves Ticketmaster’s financial interests. Scalpers likely provide significant resale inventory and fee revenue despite Ticketmaster’s claims to oppose their activities. While some measures like verified fan sales show a desire to prioritize real fans, existing practices still allow automated scalper bots to dominate popular initial ticket sales.
Opaque operations and preferential treatment given to institutional partners over average fans and consumers feeds into the widespread public perception that Ticketmaster facilitates scalping. More transparency and demonstration of effective policies blocking bulk scalper purchases would help improve their reputation. However, the company currently appears to have little financial incentive to aggressivel
Here are some key points that summarize the article:
- There is no direct evidence Ticketmaster coordinates with scalpers, but many of their policies seem to enable or passively allow scalping activities.
- Practices like lack of ticket limits, API access, and price floors all have benefited scalpers and Ticketmaster’s resale revenue.
- Scalpers likely help Ticketmaster by driving up resale volumes and providing inventory consumers perceive as scarce.
- Lawsuits and settlements allege Ticketmaster violates consumer laws and antitrust regulations.
- Ticketmaster claims to be improving bot detection and fan access, but critics think current measures still fail to stop scalpers.
- Opaque practices and financial incentive to allow scalping fuel public perception Ticketmaster facilitates the practice.