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Can Bruce Springsteen vanquish ticket scalpers?

Ryan Kailath Aug 29, 2017
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Bruce Springsteen performs on stage at The Theater at Madison Square Garden on November 1, 2016 in New York City.
Kevin Mazur/Getty Images for The Bob Woodruff Foundation

If you’re a Bruce Springsteen fan, Aug. 30 might be your lucky day. That’s when tickets go on sale for The Boss’ solo residency on Broadway, at the 975-seat Walter Kerr Theatre. But you can’t just get online and buy them. You’ve got to pre-register days in advance, then enter a lottery to maybe receive a special code to enter an online “room” where you can maybe get a ticket — if you’re fast enough.

So why is the process so difficult? In a word: scalpers.

“These are big businesses,” said David Marcus, executive vice president and head of music at Ticketmaster North America. “We are not talking about the fan who buys four and sells two. We’re talking about high-volume traders.”

Marcus said that for scalpers today, concert tickets are a high-margin, liquid investment, and that the traditional online ticketing system is easily exploited. Specifically, Marcus said, first-come, first-served ticket sales gave rise to the scourge of ticket bots.

For a popular concert, Marcus said online robots can snap up anywhere from 30 percent to 50 percent of the available tickets within moments of the sale opening. That leads to concerts selling out in 10 minutes, and massively inflated resale prices. But according to economist Mark Perry of the American Enterprise Institute, the bots are just a symptom. The real problem is that concert tickets are underpriced.

“The artists are sensitive to trying to appeal to their fans and act as if they are making their tickets affordable,” Perry said. “So they are not seen as the price gougers.”

Perry said cheap tickets give fans the illusion of attainability. But they also give scalpers plenty of room to hike prices on the secondary market before pricing themselves out.

The irony isn’t lost on Ticketmaster’s David Marcus.

“A decision to price below market frequently doesn’t land on the fan, because the scalper gets in the middle,” Marcus said.

Christian Hassold has been writing about scalpers for more than a decade on his blog, Ticket Economist. “If you had asked me five years ago, I would have said that Ticketmaster is totally accountable for the significant amount of arbitrage,” Hassold said. “I would have said they know who’s buying, they know the names and the addresses and the credit cards, and they’re not using the data that’s sitting right in front of them.”

But Ticketmaster is using that data now, in a new process called Verified Fan. Marcus said that by running pattern recognition algorithms on its vast data, Ticketmaster can anticipate whether pre-registered buyers will go to the show, or are just looking to resell their ticket. Those identified as scalpers get locked out of the ticket buying process.

Marcus said Ticketmaster has been testing Verified Fan for 10 months, and has cut scalping more than 75 percent in trials. Scalpers tend to figure out a way around every new barrier — but for now, the company seems to be winning the latest skirmish in the ticket wars.

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