Look like an admission to me: Wiseguys lawyer, Mark Rush, stated that ”Wiseguys were simply businessmen who came up with technology that essentially allowed them to get to the head of the digital line for Internet tickets, much like fans who used to camp out overnight to be first in line to buy tickets at the box office.” That statement brazenly glosses over the ‘access policies‘ enforced by primary market ticket sellers and Federal laws that prohibit hacking private computer networks – which include ticket sellers websites.

The Good: It is about time the FBI took a serious and public stand against those who use ‘bots’ to illegally obtain event tickets. The practice is boldly and openly practiced with seemingly little enforcement action. Showing some creativity, the fed’s allegations focus on fraudulent and illegal access to private computer networks in an effort to obtain event tickets. They approach the case in this way because there is no federal law against buying tickets with the intent to resell them, or ticket scalping as a practice, though there are some state laws. Hopefully for the consumer enforcement action to this end with increase.

The Bad: News of this case is a setback for ticket resellers who seek to shed the ’scalper’ image of the past. Ticket resellers should be speaking out against this illegal and unfair practice.  This kind of news does not help advance a positive image of the industry and only angers fans who are unfairly denied access to event tickets.

It will be interesting to see how Ticketmaster/Live Nation address this issue. Seems to me that they could spend millions trying to sue those who hack their sites, but if I were them, I would be hiring some technical talent capable of plugging the security holes exposed by this case.

Federal Indictment on Wired.com

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This question is a bit tricky. The best time to buy a ticket from a scalper at any event – regardless of the kind of event – is dependent of a few variables. Each variable has some unique advantages and challenges.

1. Event location: if one is in Boston, you have the likelihood of more resold ticket availability and therefore the opportunity for more leftovers after the event begins. If you are in a smaller city like Tulsa or Reno there may be a lower quantity of resold tickets to choose from. If I am in Boston looking for tickets to a Bruins or Celtics game, I can be sure there will be some tickets to choose from after game time and that the scalpers will want to sell tickets at enticing prices. In Tulsa the demand for resold tickets could be lower and therefore the number of tickets available for a game post-start are going to be less. What this really comes down to is scalpers are in business and they like to have a product to sell for every event they can. In Boston, there are more scalpers and therefore the potential for more inventory. Tulsa, less so.

2. Team rank: team ranking effects both price and availability. If the Sharks play Dallas in San Jose, expect more options after face-off. Visa-versa, less options. Of course, there may be a lot of devoted sports fans in Dallas, that could drive availability.

Other variables to consider are weather, early in season, and late in season games. Sometimes the masses decide to go to a game because it is a great day for a game and sometimes the wild card is at stake.

I could not profess to know the dynamics of every market – I don’t. What I do know is if you try to buy for a game that is less important to you, you will gain an understanding of how to buy when it matters. I once bought tickets for a Cubs game on the street; there were plenty of seats options during the first inning at fair prices below face value. I then went to a White Sox game and found a small quantity of grandstand tickets for $15 and a few really good tickets for $80 in the second inning. $80 is not a good deal for White Sox tickets!

Elie – your specific question was about Toronto. Canada loves its hockey teams. If you are shopping in Toronto, I would suppose the best values are ten minutes before to ten minutes after because scalpers snap up those tickets in droves. If they play away, take into account who they are playing.

Now that fansnap.com and seatgeek.com are in full swing, I would advise buyers to check both of these sites to check availability and price 24 hours before the game. The more tickets and price options you see, the better chances you have of getting a deal after face-off/tip-off, etc. The less options… well, you get the idea.

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As the LA Times reported, SeatGeek was selected to appear at the TechCrunch 50 in San Francisco earlier this week. In the Times article, Co-founder Jack Groetzinger is quoted as saying, ”We have an algorithm that can forecast ticket prices.” Indeed, the casual consumer is often baffled by secondary market ticket prices making forecasting is interesting proposition. The challenge is that most of the academic research I have performed or read indicates that resold ticket prices usually go down following the on-sale date. Though this is mostly true for concert tickets, I have seen these price patterns occur with sporting event tickets, too. However, sporting events can be subject to price fluctuations driven by unique influences such as weather and rankings,  so that is likely where there is a value in forecasting. As cool as the forecasting piece could be down the road, I don’t agree that SeatGeek is (right now) as impressive as its competitor, FanSnap.

FanSnap walks around the forecasting question and gets to the point. If one is on the site, they are on the market for a resold ticket; what are the options? Unlike SeatGeek, which only lists section and ticket price data before linking to the resellers site, FanSnap has a really well done user interface that allows one to easily locate tickets on a high-resolution seat map with pop-ups that indicate price and number of available tickets. FanSnap also seems to have a pretty large pool of ticket resale partners providing data to them which provides prospective buyers with more price variety. They key to getting the best deal on a resold ticket is knowing all the price options, not just a portion.

While SeatGeek has potential, it has a ways to go. Regardless, these two ticket resale plays are proof that the ticket search / aggregation battle is on – good news for the price conscious consumer.

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A good example of incomplete reporting is John Seabrook’s piece in the August New Yorker titled, The Price of the Ticket. The crux of this book-report-style review is that the ‘live music business is broken’ and he uses the infamous February 2009 Bruce Springsteen ticket debacle as a vignette to support this claim. While the article offers a useful and unique report on the evolution of the concert promoting business, it fails to fully explain ticket scalping and does not even come close to explaining the mess that is ticket pricing and distribution. In addition, the artice fails to examine why Bruce Springsteen and other artists who claim to be irate about scalping don’t use their star power to productively address the issue instead of writing angry letters or blogs posts about it.

At the outset Seabrook claims that “Almost everyone agrees that the business of live music… is dysfunctional.” This claim is poorly supported and is also untrue. Going by the numbers, Ticketmasters ticketing revenue from 1998 to 2008 grew ten-fold (Rolling Stone, July 9, p.28), and as Seabrook points out himself, live music is actually saving the business of music by providing a strong source of revenue to artists as the rise of the digital music (and piracy) has reduced record sales revenue. Following ticket sales, many acts young and old, are raking in huge revenues every year. Seabrook reports that “forty-percent of all Live Nation seats go unsold…” what he does not report is the reason for that has more to do with ticket mis-pricing and acts like Jessica Simpson being staged in venues that are too large for a limited following.

Seabrook also states that “Both Live Nation and Ticketmaster are loathed by fans…” a claim that is true, but not because the live music business is dysfunctional. In fact, what is dsyfunctional is concert ticketing – and that is the exact reason why fans have little love for Live Nation and Ticketmaster. Seabrook points out that billions of dollars in ticketing revenue are lost to the secondary market without providing a single explanation for this very important observation.

While it is unclear if the secondary market is a $2 billion or a $25 billion business, one thing is for sure, that the size of resale profits is absolute evidence that Live Nation and Ticketmaster cannot effectively sell tickets. It is a wonder how Seabrook could write an article called ‘The Price of the Ticket’ and not want to find out why artists like Bruce Springsteen and Trent Reznor (who both despise scalping) do not depart from letter writing and blogging and take an activist role in addressing issues that have a huge impact on ticket pricing.

For example, as Seabrook points out in his article, Springsteen’s own management team kept 2,262 of the best seats out of the public sale for his May 21, 2009 show, leaving only 108 available. This common practice constrained supply and put a huge price premium on the 108 tickets put up for sale – making them prime targets for secondary market speculation. If Springsteen hates scalpers, why would he stand for under-supplying the market and feeding resale demand? We never get a clear answer other than that his management needed to hold back tickets for potential VIP’s. It is inconsistent to claim your concerts are intended for regular people and that tickets should be equal access and then hold back the best seats for celebrities who can well afford their own tickets.

Finally, Seabrook claims that “ticket scholarship is a neglected field.” To the contrary. there are a good number of scholarly papers on ticket resale, including a small sample posted on this blog. While there are few dedicated ticket scholars, the topic has been widely covered for over ten years. It is true that there are not many studies that examine actual pricing and resale, but this is because Ticketmaster and Live Nation generally refuse to support resale scholarship (though they have done so in two limited cases). [And, Seabrook, if you happen to read this, Kruger's 'Rockanomics' paper studies primary ticket markets and its tiny reference to resale is not empirical. The Sorensen/Leslie paper is the most current and complete analysis of both primary and secondary ticket sales.]

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First, if you prefer to buy from Ticketmaster or Live Nation and do not see the seats you want onsale right away, return to the site seven to ten days before the show and you may find a decent pair of tickets at face value, plus the ridiculous fee’s. You may have to come back to the site a couple of times as ticket inventory can change daily, sometimes hourly. For example, on August 5th at 5pm I bought a 7th row ticket at face value from Live Nation for the August 6th Coldplay Show in Raleigh, NC (here is some video I snapped). That same ticket was not available at 3pm. I paid $126 (fee’s included for my seat) and the guy I sat next to had paid StubHub $170 for each of his four seats bought two months before.

Second, if you are a bargain hunter or last minute planner, the secondary ticket market is a good place to look for last minute deals. If you are buying online from a reseller like StubHub, TicketNetwork or RazorGator, I strongly recommend buying at least two days before so you can be sure to get the tickets overnighted. But if that is not enough last minute for your style, you can always just show up to the venue an hour or two before showtime and go hunting. The best way to find deals on tickets at the event is by strolling the tailgate parties and asking or looking for people who have extra’s. At the Coldplay show I mentioned earlier, I saw at least two dozen tickets on sale for anything from face value (without the fee’s) down to 50% off. People really worry they will be stuck with an unwanted ticket so there is always room for negotiation.

Finally, there is a really cool site I recently found called fansnap.com. The site scours ticket resale sites and organizes available inventory by price and seat location. It is super easy to use and free. I’m actually pretty bummed because they beat me to getting the idea launched, but hey, they did it so kudos to them.

As the secondary ticket resale market continues to grow, I am pretty confident that stories of $10 and $20 tickets will become more common. They are hard to come by, but they happen. So, as Mr. Miyagi says, “patience Daniel-son, patience.”

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I foresee a challenge of a different kind for Live Nation and Ticketmaster. Not only will they need to address underpricing in the early period of ticket sales, they need to avoid being undercut by ticket resellers and consumers trading tickets in the late period. If concerts and sporting events were selling out, this would not be a problem, but they are not. Stadiums and arena’s are not filling and primary marketing tickets are going unsold. Live Nation has responded to this challenge by fire selling lawn seats, but I suspect primary market sellers are going to have to start offering bargains on unsold seats of better quality if they are going to compete, yes compete, with ticket resellers in the few weeks leading up to an event.

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What I learned by attending Ticket Summit is that though the event may appear to be constructed on a self interested agenda, it appears better run and more organized than NATB’s World Ticket Conference. For example, Ticket Summit has a dedicated public relations contact that went out of her way to make sure I had face time with key leaders attending the conference – bear in mind I am a hobbyist blogger not a reporter for the New York Times (and one was there too). Then there is the content of the panels, Ticket Summit had rich discussions ranging from “Futures Markets”, “Pricing Strategies for Ticket Sellers” (for which I was a panelist), and “Internationalizing Your Ticket Base”. NATB’s World Ticket on the other hand had no PR contact I could locate and panel topics that seemed less interesting, including “How to Fix a Broken Sales Team” and “Is Your Website Hurting Sales?”.

In fairness, Ticket Summits panel discussions need improvement in two key areas. First, some panels were too short for the material and issues being discussed – some felt rushed. Second, the quality of discussion on the panels could benefit from stronger moderators. For example, the keynote panel on “Ticketing in a Recession Economy” lacked continuity in discussion. The panel I participated on was dominated with questions about dynamic pricing which distracted the panelists from talking about “Pricing Strategies for Ticket Sellers”.

Of course, Ticket Network being a technology provider for ticket brokers is well suited to run a conference for its customers, but the conference leaps beyond this purpose in that is includes key competitors, including StubHub (whose president gave a keynote) and their show case features businesses that are clearly competitive to Ticket Network. It would make a little more sense for Ticket Network to go to all this trouble if they were making money on the event, but even if 500 attendee’s all paid the $249 conference fee, $124,000 and some sponsorships could not possibly pay for two and a half days of meeting rooms, catering and two receptions.

So, why does Ticket Network run Ticket Summit? Simple, Don Vaccaro, CEO of Ticket Network, is a very smart guy. By investing in the conference, he drives the agenda and keeps his customers close and his competitors even closer. From the outside it appears selfish, but up close it is more “fair and balanced” than FOX News.

As the week progresses, some writings will follow on interesting issues raised at the conference.

I was prompted to write this article to help academics (market designers included) and outsiders have a better understanding of Ticket Summit and the premise of the conference which takes place twice a year.

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Irving Azoff, CEO of Ticketmaster has proposed that concert ticket prices should be more dynamically priced, but he side steps responsibility by suggesting that artists and promoters need to take the initative. Indeed, ticket prices are established by artists and promoters and Ticketmaster has historically not had a lot to do with the actual pricing of a ticket, but that is only because after selling billions of dollars in tickets, the company can’t seem to use all the data it has collected to offer dynamic pricing services to artists and promoters. Who else is best suited to provide dynamic pricing than the company selling the tickets? I can only speculate that Mr. Azoff prefers a broken system that allows them to assess hefty fees on individual ticket sales.

Dynamic ticket pricing is needed now and it could benefit the market in two ways. First, it would reduce the number of tickets resold on the secondary market because dynamic pricing would reduce profit potential at resale. Second, dynamic pricing could increase ticket sales volume for events where interest was low. It seems plausible that some concerts are under attended because lower quality ticket prices (with fee’s) are not enticing enough. This is probably why Live Nation is putting so much effort into selling lawn seats for $25 with no ticketing fees – that kind of price entices people to buy.

Note: Rafi Mohammed gives a little more information on dynamic pricing and issues surrounding the concept in this article.

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The general public and primary ticket sellers alike have a love-hate relationship with ticket scalpers, one that is entirely based on the perceived beneficiary of a given scalping transaction. If a fan gets a ticket from a scalper at the last minute for a ‘fair price’, scalping is good. But, when the popularity of an event drives resale prices high, scalpers are bad for profiting from basic economic theory. On the primary seller side, Ticketmaster is happy to use ticket resellers to clear out inventory or gain from resale profit, but they blame scalping practices when CNN runs a story suggesting that the parents of a 12-year old Miley Cyrus fan might have to pay $2,000 for a front row center ticket to see a sold out show. Never mind Ticketmaster is gladly offering a similar front row seat for $2,605.

Ticket resellers are not the enemy; they are a service provider. They would not exist without a large market of buyers – people like you and me – who don’t want to admit we use scalpers to solve our lack of planning (making time to buy a ticket or not buying until we know we can go). Someone was silly enough to pay $2,000 for a Miley Cyrus ticket, and though that is alarming, the facts are that her average resale ticket prices on StubHub in 2007 were $257. Either way the blame for this should lie with Miley’s management and Ticketmaster – not the ticket scalper. Two simple facts support this truth.

First, artists, promoters and Ticketmaster support scalping by holding back better tickets and selling them for a much higher price. In other cases they reduce available ticket inventory by holding them back for promotional purposes (sometimes up to 20%). Combined, these actions both reduce available ticket inventory on the primary market and increase perceptions of short supply, which enables higher resale pricing.

Second, as scholars have noted (Courty and Atkinson), most event tickets are artificially priced low as a service to fans – a decision made by both promoters and artists and rubber stamped by primary ticket sellers. This alone is a key reason why scalping is so widespread: under pricing creates a market for resellers to profit from mis-pricing.  If Miley Cyrus, Trent Reznor, or any other artist wants to do a service to their fans, it is letting the better seats price to what the market will bear and not some artificially low price that invites scalping. Yes, some of the better seats will have to sell for $200 and not everyone can afford that, but not everyone can sit in the front row.

To be sure, ticket resellers can make supply appear to be scarce and position their tickets at higher prices, but they need the primary market to deplete supply for this to work. Ticketmaster and Live Nation do exactly this by queuing 50,000 people for 10,000 under-priced seats at the same time with little economic diversification, making it easy for buyers to cheaply acquire tickets for resale.

It is fair to question the size and scope of ticket scalping, but it’s not useful to cast scalpers as villains. Instead, everyone should be calling on Ticketmaster and Live Nation to take a genuine leadership role in developing ticketing solutions that reduce the potential for scalping without limiting a buyers options. Ticket sales are comprised of a fluid combination of elements including price, seating preference, the attendee’s knowledge of their schedule, weather, and microeconomics. Primary market selling methods should provide buyer’s with options that take these pricing influences into account- not force them into a no-way-out transaction like paperless ticketing just to take a hit a scalping.

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As a Wall Street Journal article from last week correctly suggests, Miley Cyrus is Ticketmaster’s guinea pig; will the test be successful? Though there is not enough information on hand to know for sure, it is clear that the decision to sell “paperless tickets” for all of Miley Cyrus shows has raised the eyebrows of fans and resellers alike putting Ticketmaster on the defensive while ticket resellers try to figure out how to carve a market in a paperless ticket system. I have read a good amount on the topic over the past week and have a couple observations.

Ticketmaster executive David Butler claimed on CNBC that Ticketmaster was not trying to thwart ticket scalpers, but “to give more tools to artists to control their relationship with fans.” Later in the interview he stated “the fans decide what the right arrangement is…” but then goes on to say that “Miley believes that her fans are best served by [paperless tickets].” Miley may have had good intentions when supporting the concept, but the brains behind the paperless tickets is Ticketmaster, and at best the concept is half-baked.

Paperless tickets are great for fans who have a credit card, valid photo ID and the complete confidence they can attend the event for which they are buying tickets. But those requirements disqualify a huge portion of the ticket buying population, including kids without credit cards or ID’s, those who buy tickets and later wish to sell them if the cannot go, those who wish to gift tickets and those who buy ‘okay’ tickets for one date and then get better tickets after a second date is announced. All of these cases are quite common and paperless tickets easily restricts the buyers choice. To Mr. Butler’s comments, I am not confident most fans would choose paperless tickets given the option. So Mr. Butler, if “fans decide what the arrangement is” where is the choice? And what mis-guided artist management would push Miley to be a guinea pig in this half-baked idea unless the management was owned and controlled by Ticketmaster… oh wait, it is! And let me guess who will have the sole right to resell the tickets? TicketsNow – the reseller owned by Ticketmaster?

Don’t get me wrong, paperless tickets are a great option – but they should be just that - an option, not a mandate. Miley Cyrus management team should have recognized this, but they did not and the fan banter on Twitter and elsewhere suggests that people are more frustrated than happy.

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