Ticket scalping – the practice of buying tickets to popular events and reselling them at higher prices – has been around for a long time. But with the rise of the internet and secondary ticket marketplaces like StubHub, it’s become easier than ever for scalpers to buy large quantities of tickets and sell them for enormous profits.
Many fans get frustrated when shows sell out in minutes, only to see the same tickets being resold at 2-3 times their original price. This has led some to ask: Why doesn’t Ticketmaster do more to stop scalpers? There are a few key reasons:
High fees incentivize scalpers
Ticketmaster itself charges service fees on every ticket – often 20-30% of the base ticket price. These high fees actually create an opportunity for scalpers. The larger the gap between face value and final ticket price, the more room there is for scalpers to make a profit.
Some breakdowns of Ticketmaster’s fees:
Fee Type | Amount |
---|---|
Service fee | $10-$25 per ticket |
Order processing fee | $5-$10 per order |
Shipping fee | $2-$15 per order |
These fees can add hundreds of dollars onto an order. For example, a family of 4 buying tickets that cost $50 each would pay about $100 in additional fees. That creates room for scalpers to buy the $50 tickets and resell them at $150-$200 and still make money.
Scalpers have insider access
Professional ticket brokers often have special relationships, insider connections or advanced tech that allows them access to tickets before the general public. For high demand shows that sell out instantly, scalpers with this insider advantage can buy up significant inventory.
Before tickets go on sale to the public, blocks of tickets are held for presales (for fan club members, credit card-holders, etc). Scalpers sometimes obtain presale passwords or find loopholes to buy tickets during this period. Venues, tour promoters and even the ticketing platforms like Ticketmaster quietly allocate tickets to scalpers to ensure sell-outs.
Scalpers use bots and technology
Scalpers have turned ticket buying into a tech arms race, employing advanced bots, server farms and phishing techniques to gain an advantage over average fans. The use of bots to bypass security measures is prohibited by Ticketmaster, but detecting and enforcing this policy has proven very difficult.
Some estimates state that 30-40% of all tickets are purchased by brokers employing bots. The speed and automation provides a huge advantage over regular fans trying to buy tickets manually.
Ticketmaster still gets their fees
Ticketmaster earns fees on the original sale and additional fees on any secondary market sales. So the more a ticket gets resold, the more fees Ticketmaster pockets. Studies show Ticketmaster could be making over $500 million per year in additional revenue from scalped tickets.
Some also accuse Ticketmaster of double dipping – quietly selling large ticket blocks to scalpers through subsidiary resale companies. While Ticketmaster denies these claims, they certainly benefit financially from a thriving secondary market.
Does Ticketmaster attempt to stop scalpers at all?
While Ticketmaster has little incentive to eliminate scalping, which likely provides millions in additional revenue, they do employ some measures to limit the practice:
Limits on number of tickets per purchase
Ticketmaster tries to enforce ticket limits to prevent brokers buying out all the inventory. However, scalpers often circumvent this by hiring large teams or using bot farms to make purchases. Ticketmaster’s ticket limits aim to make scalping more difficult but rarely prevent it completely.
Cancellations of suspected scalper orders
Ticketmaster uses algorithms and screening procedures to identify and cancel suspicious bulk orders likely tied to scalpers and bots. But again, skilled scalpers find ways to disguise their activities and avoid detection. Just the threat of order cancellations puts some pressure on large-scale scalping efforts.
Banning known scalpers
Ticketmaster maintains a blacklist of known scalpers and brokers who violate their terms of service. This can temporarily restrict them from purchasing tickets or lead to cancellations of existing orders. However, it’s often difficult to enforce and easy for scalpers to create new accounts.
Lawsuits and lobbying for legislation
Ticketmaster has filed lawsuits against major ticket brokers and supported legislation looking to crack down on bot usage. These efforts rarely stop scalping completely, but apply some public pressure. However, Ticketmaster has also lobbied against other bills that would more tightly regulate the secondary market.
Why is it so difficult to eliminate scalping?
Completely stopping scalping would be extremely difficult, if not impossible, for a few reasons:
Consumer demand
As long as fans are willing to pay inflated prices, a secondary market will thrive. While price caps could be enacted, plain old ticket scarcity fuels scalping. Supply and demand ensures scalpers can find buyers for scarce, high-demand event tickets.
Difficult to detect
Sophisticated scalper operations appear no different than normal customers to Ticketmaster. Scalpers can create endless accounts and leverage technologies to avoid detection. ticketmaster admits that eliminating scalping would require invasive user policing.
Enforcement challenges
Ticketmaster faces technical and legal limitations on how aggressively they can police customers. There are few legal restrictions on reselling event tickets at higher prices. Attempting to enforce extensive bans or ticket limits raises privacy issues and PR backlash.
Benefits venues and promoters
Venues, artists, and promoters quietly allow and even encourage some scalping to ensure pack houses and quick sell-outs. Scalpers absorb risk of empty seats. Some also strike special deals to allocate inventory directly to brokers.
Does Ticketmaster even want to stop scalping?
Despite public statements decrying scalpers, Ticketmaster likely has little financial incentive to completely eliminate scalping:
Double and triple fees
Ticketmaster generates fees on the original ticket sale and any secondary sales on their resale platform. More scalping means significantly more fees.
Guaranteed sellouts
Scalpers purchase unsold inventory, reducing the risk of empty seats and unhappy clients for Ticketmaster. Sellouts look good for venues.
Higher profit margins
Tickets sold by scalpers are often marked up 50-100% above face value. That leaves room for Ticketmaster to impose even higher fees on resale.
Data on customer demand
Scalper activity provides Ticketmaster with useful data on real market demand and optimal pricing strategies for different events and markets.
Increased revenue
While hard data is scarce, some experts estimate scalping accounts for hundreds of millions in additional revenue for Ticketmaster annually. There is little incentive to curb a practice that is so lucrative.
Could anti-scalping legislation provide a solution?
To truly combat scalping, new anti-scalping laws or regulations on the ticket industry may be required:
Strict ticket limits
Capping the maximum number of tickets per person to 4-6 could deter large-scale brokers. But limits would have to be enforced globally across all sales channels to be effective.
Mandated price caps
Laws restricting ticket resale prices to less than 50% above face value would reduce profitability and make scalping far less attractive. But such legislation raises concerns about pricing regulation.
Required disclosures
Forcing ticket companies to disclose specifically how inventory is allocated could expose potentially favorable treatment of scalpers and brokers. But the companies would likely resist such transparency.
Bans on bot usage
Some states such as New York have passed laws prohibiting the use of ticket bots, with fines up to $1000 per offense. But technical workarounds make enforcement difficult.
Crackdown on deceptive practices
Regulations could prohibit practices like shell companies, fictitious users, and other deceptive tactics scalpers use to acquire inventory. Meaningful enforcement would be challenging.
Key Takeaways
– Ticketmaster’s high service fees incentivize scalping by leaving room for brokers to mark up prices
– Insider connections, bots, and other methods allow scalpers preferential access to in-demand tickets
– Ticketmaster benefits from scalping through higher order volumes, double fees, and guaranteed sellouts
– Scalping is deeply ingrained in the secondary ticket market and unlikely to disappear entirely
– Anti-scalping legislation could regulate practices like bot usage but faces industry opposition and enforcement hurdles
While Ticketmaster does make some effort to curb scalping, meaningful action is unrealistic given the financial upside. Scalping essentially helps subsidize Ticketmaster’s business model through billions in additional fees. Eliminating these profits would require government intervention that Ticketmaster seems unlikely to support voluntarily. Absent regulation, fans will likely continue seeing prized tickets snapped up and resold at inflated prices.
Conclusion
Ticket scalping has become an entrenched practice in the ticketing industry. While Ticketmaster does employ some measures to limit it, serious action is hampered by technological limitations, enforcement challenges, and the significant profits scalping provides.
Scalpers exploit Ticketmaster’s high fees, preferential industry access, bots, and insider inventory allotment to resell tickets at enormous markups. Ticketmaster benefits from these practices through massive additional fee revenue, guaranteed sellouts, and useful sales data.
New anti-scalping legislation could potentially regulate the secondary market more tightly. However, substantive change would require restricting practices Ticketmaster currently profits from. While fans may continue calling for measures to combat scalping, meaningful reform remains unlikely absent external regulatory pressure.