Ticketmaster schemes with scalpers so you pay more, report says

Scalpers using bots to scoop up huge numbers of tickets to resell at much-inflated prices have become a curse for the concert-going public. Shows can sell out in moments, with thousands of tickets appearing on reseller websites minutes later.

So what is Ticketmaster, the largest player in the ticketing industry, doing about a problem afflicting its customers with added costs and hassles?

Cashing in — twice.

That’s according to a new report based on a news-media sting operation at a ticketing and live-entertainment convention in Las Vegas, where Ticketmaster reportedly held a private event for scalpers, whom the company refers to as “resellers” and “brokers.”

Canada’s national broadcaster CBC and the Toronto Star newspaper sent undercover reporters to Ticket Summit 2018 in July, CBC reported Wednesday.

“Posing as scalpers and equipped with hidden cameras, the journalists were pitched on Ticketmaster’s professional reseller program,” CBC reported. “Company representatives told them Ticketmaster’s resale division turns a blind eye to scalpers who use ticket-buying bots and fake identities to snatch up tickets and then resell them on the site for inflated prices.”

“Those pricey resale tickets include extra fees for Ticketmaster,” CBC reported.

The West Hollywood company told the news outlets that as long as there’s an imbalance between supply and demand for event tickets, there will be a secondary ticket market.

“It is our job to offer a marketplace that provides a safe and fair place for fans to shop, buy and sell tickets in both the primary and secondary markets,” Ticketmaster told CBC.

At the convention, a Ticketmaster “resale director” held a session closed to the media, CBC reported. “The audience heard that Ticketmaster has developed a professional reseller program and within the past year launched TradeDesk, a web-based inventory-management system for scalpers,” CBC reported. “TradeDesk allows scalpers to upload large quantities of tickets purchased from Ticketmaster’s site and quickly list them again for resale. With the click of a button, scalpers can hike or drop prices on reams of tickets on Ticketmaster’s site based on their assessment of fan demand.”

The resale program and TradeDesk appear closely guarded by Ticketmaster. “Neither TradeDesk nor the professional reseller program are mentioned anywhere on Ticketmaster’s website or in its corporate reports,” CBC reported. “To access the company’s TradeDesk website, a person must first send in a registration request.”

A Ticketmaster sales representative told a reporter that although the firm has a “buyer abuse” department that keeps an eye out for suspicious online activity, the reselling department doesn’t police users of TradeDesk, CBC reported.

Another Ticketmaster employee at the convention was asked whether the company would ban scalpers who violated the firm’s terms of service by getting around ticket-buying limits. The employee said Ticketmaster had spent millions on TradeDesk.

“The last thing we’d want to do is get brokers caught up to where they can’t sell inventory with us,” he said, according to CBC.

By 2015, the reselling of tickets had grown into a $5-billion industry in the United States, according to news outlet CNBC.

For Ticketmaster, this market is “particularly lucrative,” CBC reported.

“For example,” CBC said, “if Ticketmaster collects $25.75 on a $209.50 ticket on the initial sale, when the owner posts it for resale for $400 on the site, the company stands to collect an additional $76 on the same ticket.”

The company runs a rewards program for scalpers, CBC reported.

“As scalpers hit milestones such as $500,000 or $1 million in annual sales, Ticketmaster will knock a percentage point off its fees,” CBC reported.

Ticketmaster is owned by the world’s largest concert promoter, Live Nation — which brought in $10.3 billion in revenue last year — and sells tickets to concerts, pro sports games, theater shows and other events. Ticketmaster told the Canadian news outlets that it operated its ticketing marketplace more transparently and securely than any other company.

“We clearly delineate between standard tickets sold by the venue and tickets sold by third parties, with clear disclosure that resale prices may exceed (or be lower than) face value,” the company told the news outlets in a statement.

“In addition to our work fighting the use of automated bots,” it said, “we have also taken the most restrictive stance on speculative ticketing, not allowing any seller, professional or otherwise, to post tickets we have not validated.”

In January, Live Nation settled a lawsuit centered on allegations by a live-music ticketing company that Ticketmaster had engaged in anti-competitive behavior and committed antitrust violations. Live Nation agreed to pay ticketing company Songkick $110 million and to buy some of its assets, including an anti-scalping algorithm.

Baron writes for the San Jose Mercury News.