Consider this scenario: Your favorite mid-level rock band has just announced a nationwide tour. You’ve been listening to their new album for weeks, and now they’re going to play a show at a 400-capacity club in a few months. The tickets go on sale Friday at noon, so you log on to Ticketmaster at 11:55 AM just to be safe. The clock strikes twelve, and a “find tickets” button emerges. You click it immediately but are prompted with a message telling you the servers are full, and you are placed in a virtual waiting room. After fifteen minutes, Ticketmaster tells you that the tickets have sold out. You are dismayed, but after some Googling you find some tickets available on StubHub and other similar sites – but at a much higher going rate. Instead of the original $30 cost, it’ll now take $85 to get you into the show.
As many music fans will know, this situation is far from a rare occurrence. Buying admission to any sort of event where tickets are sold online at face value has been getting increasingly more difficult over the past few years. Quite often, tickets will sell out in minutes or even in seconds, only for hundreds to immediately appear on reselling sites at significant markups, and it can happen at any scale. Pearl Jam recently sold out two summer shows at Fenway Park — which holds over 37,000 people during Red Sox games — in less than ten minutes, though hundreds of seats are still available on StubHub for nearly double the original price. Want to be on the floor for Beach House’s Boston show next month? That’ll run you $48 (before processing) instead of the original $30. The phenomenon isn’t limited to concerts, either. Many sports scalpers have gone digital as well; between five and six thousand people bought Super Bowl 50 tickets from StubHub at a minimum of three grand a pop. Even tickets to free events like the Pope’s recent visit to New York appear online for considerably high prices. Time and time again, what amounts to online ticket scalping becomes the only option for interested customers.
There are several factors that make tickets available to the general public incredibly limited and expensive. Most venues withhold general tickets to instead give them to insiders and others with corporate ties. The exact amount varies from event to event — nearly thirty percent of the tickets to a 2013 Kanye West show at the Barclays Center in New York were distributed in this way. Password-based presages — where people are able to buy tickets ahead of the general public if they know the passcode — should, in theory, help true fans. But in practice they allow for more exclusivity, especially when the venue or a sponsor controls access to the password, as oftentimes it is used as another way to charm insiders. The biggest issue is the number of individuals who obtain tickets as soon as they go on sale with no intention of attending the event and with all the intention of making a profit. Usually, individuals achieve this via ticket-buying bots, software that scalpers use to purchase tickets online as soon as they’re available in just milliseconds, far faster than humanly possible. Scalpers acquire dozens or even hundreds of tickets this way, then list them on secondary ticketing markets like StubHub for a sizeable profit on each sale. The impact this practice has on individual events can often be massive; a recent extensive report from New York Attorney General Eric T. Schneiderman discovered that over one thousand seats for a U2 concert at Madison Square Garden sold to one digital scalper in under a minute.
This process raises questions about whether it’s a legitimate function of capitalism or an abuse of the free market. As shown above, the current method of online ticket selling doesn’t realistically afford equal purchasing opportunity to regular customers and gives bot-users and insiders a disproportionate advantage. The Guardian refers to ticket scalping as “a sleazy brand of capitalism,” pointing out that the middle man in the venue-reseller-customer equation adds nothing to the product to justify the increase in cost. Schneiderman referred to ticketing as “a fixed game” in his report. Still, some support the current scalping dynamic as a natural market function and occasionally go as far as to say it’s actually an economically beneficial practice. Whether the current ticketing system — and especially ticket reselling — is capitalistic or not is still up for a debate, those who argue it is unfair to consumers agree that legislative steps need to be taken.
Ticket scalping laws vary from state to state, but, in most places in the United States, the process of buying tickets online solely for the purpose of reselling them at a higher price is perfectly legal. As of September 2014, only thirteen states have laws generally banning resale at significantly above face value, and of those, six make exceptions for licensed and/or online brokers or depending on the type of event. Even then, many laws are loosely enforced. Several states actually explicitly allow ticket reselling within their borders. Automatic-purchasing bots are illegal but practically impossible to monitor and control, and many are able to bypass security systems designed to keep them out.
Perhaps the simplest and most effective way of preventing price-gouging would be more bans on reselling at (or above) face value. But this is by no means a complete solution; in Massachusetts, state law only allows for a $2 markup on resales, yet the aforementioned Pearl Jam and Beach House examples demonstrate that this rule clearly isn’t being followed. Even if laws are put in place, enforcement is a big hurdle, as scalping is hard to monitor and it is unclear exactly on whom the burden of policing falls, nor would it be easy to finance. Even if law enforcement agencies were to meticulously oversee all online ticket sales, a nearly impossible task given the size of the market, proving somebody used a bot to purchase tickets is very difficult. The situation further complicates if the alleged scalper resides in a state different from the one hosting the event. Reselling marketplaces like StubHub could certainly help by taking down listings with exorbitant increases over face value. Yet they will likely heavily resist any such move, as it would undoubtedly hurt their business, as they take around 15 percent of each sale for themselves. For the same reasons, they are unlikely to prevent the same IP address from submitting a large quantity of tickets to the same event — i.e. ones likely purchased by illegal bots — or end the practice of “speculative resales,” in which resellers put tickets up for sale before actually purchasing them. Furthermore, the conflict of interest isn’t limited to these companies; since these companies pay taxes, the government also serves to benefit from legal, regulated scalping.
Venues have a bit more to gain from cutting down on ticket reselling. Mainly, if more people are able to afford to attend their events, they stand to make more from concessions and merchandise sales. For instance, The Daily Telegraph reported that during the 2012 London Olympics, over 50,000 seats went unsold, as agencies sought to make huge profits by selling tickets at enormous markups. If ulterior motives prevent the government from acting swiftly, there are some practical measures venues can implement that will benefit customers in the short term. One such idea is to mandate that all tickets must be picked up on the day of the event by the purchaser, using ID checks to make sure the original buyer is using the ticket. This approach, however, would make giving or selling tickets to friends essentially impossible, and any digital equivalent would likely fail as well. Ticketmaster and most original sellers currently place caps on how many tickets can be purchased in one transaction, but bots have found a work-around, so only regular customers are constrained. Better antibot technology would be extremely helpful, but it is likely that bot users would simply adapt their systems to bypass any new security measures.
Most antiscalping options are stop-gap solutions at best, and real change will not come until the government and/or reselling marketplaces take action. In his report, Schneiderman suggested some courses of action to the New York State Legislature, but it remains to be seen if they will follow up on his advice. This, however, is a unique situation wherein the customer’s suffering and lack of satisfaction has little effect on the financial bottom line for the supplier. Thus, it seems improbable that legislation will be proposed unless customers — and possibly venues as well — show their displeasure in a concentrated and visible manner, most likely through one that affects the other actors financially. Until then, customers will continue to have no option but to pay through the nose to attend their favorite public events.