The real reason you couldn't score U2 tickets? Turns out some of the buyers at Ticketmaster.com weren't human.

The fans queuing in front of Tower Records on this sunny Sunday morning have yet to learn that they will not be getting tickets to the two U2 shows in San Jose April 9 and 10.

If you plotted them on a continuum of who is about to get screwed most in today’s international ticket buy, these people would be at the far left end of the spectrum — the complete rubes. A line of them began forming by 7 a.m. on Market Street in San Francisco’s Castro District. Dozens of large, white, distinctly Irish-looking men coalesced out of the dawn. These were not the pierced Castro denizens in fitted jeans Tower Records clerk Elisa Horsman normally sees.

Horsman made sure to drink moderately the night before, rise early, and show up on time for the biggest ticket sale in the two years she has worked at Tower. People have been coming in for days asking about today’s sale — what tickets would cost, which seats are best — and she arrives by 9:45 to prep the store for its 10:00 opening.

A fifty-foot-long line of thirtysomething males already snakes down the block. Dozens of would-be-concertgoers bounce in place, mumbling to one another and staring at the skinny, indie-rock-styled clerk in her early twenties. Horsman pounds on the door for her manager to let her in as she deflects the crowd’s anxious questions.

“When are you going to open up?”


“When do the tickets go on sale?”


“You’re not going to let us in early?”


Horsman can’t recall when the line has ever been this unruly. All across the Bay Area, it’s much the same. Area ticket clerks say the three most popular locations for buying tickets in person — Oakland’s Paramount Theatre, the Emeryville Tower Records, and its sister store here in the Castro — all feature long, grumpy lines. People punch their cell phones, calling girlfriends and boyfriends at remote Ticketmaster centers in Richmond and Concord. Some friends travel as far away as Davis to beat the crowds.

“Have they opened the store yet?” one girl asks her friend on the phone. “I know, I know! Not here either! Not till ten!”

The crowd’s anxiety increases as fans trade stories of the botched fan-club presale on the prior Tuesday. “Tuesday, Bloody Tuesday,” people are calling it. Specially reserved seats for members of U2’s Propaganda fan club blew out online in minutes. Two million hits a second flooded Ticketmaster’s servers. Scalpers immediately sold fan-club tickets at triple their face value. Rumors suggest that scalpers bought hundreds of fan-club memberships under different names to resell the coveted general admission floor seats.

At 9:50 a.m. on Market Street, fifty pairs of eyes stare through tinted storefront glass at Horsman as she boots up the dedicated Ticketmaster computer. She is the Ticketmaster guru, in charge of training new clerks on a machine most employees simply fear. A mouseless computer with an arcane visual interface and tons of jargon, it takes at least four hours, plus follow-up training, to become proficient. So most of them just punt the job to Horsman.

“Things are already running slowly,” she worries. With just minutes left until tickets go on sale, she cannot log on to Ticketmaster’s main computers.

Horsman knows this is the most hotly anticipated concert of 2005. U2 tours maybe once every five years, and fans aren’t sure how long the band will keep doing so. As far as the sickly American concert industry is concerned, U2 is the only remaining superband — the only band that can sell out every massive stadium it intends to play moments after announcing its tour dates.

Shows like this aren’t just popular with members of the fan club. They’re pure gold for the scalpers, too, and the clerk notices a few regulars in line with their typical seating lists and charts. Older and less enthusiastic than other customers, and usually waiting alone, these patrons are all business.

The store manager unlocks the front door at 10:00 and the first fans shuffle toward Horsman. Ticketmaster limits floor seats to two tickets per order, at $150 per ticket. Upper-deck seats go for $50 apiece and can be bought in blocks of eight, she tells them. The customers ask for the floor, and after a system delay of a few minutes, Horsman can’t believe what she pulls up.

Nothing. The entire floor is gone.

The fans ask for the upper deck, anything. Horsman hits the “tab” and “enter” buttons, trying to pull down whatever she can from the slow computer. Nothing happens.

She manages to lock in a pair of tickets behind the stage. These fans will have to look at Bono’s ass for two hours. She tries once again to do better, but it’s all she’s getting.

The customers buy the crap tickets anyway, taking them as the next person walks up. It’s ten minutes into the sale and Horsman has managed to serve only one customer.

Irishmen call her names in thick accents under their breath. Some people threaten her. She keeps her head down and focuses on the unresponsive computer as people in the angry crowd stomp their feet, look at their watches, call friends on cell phones, and bitch like burned addicts.

“I should’ve called in sick,” she thinks.

Meanwhile, Michael Horne, also known as the Sledge, is at home in Oakland in his pajamas. He plays guitar in Northern California’s most popular U2 tribute band, Zoostation.

The Sledge doesn’t simply love U2. He makes money off the band as a successful knock-off brand. Business has picked up with the latest U2 album and forthcoming tour, and shows clutter his weekend calendar. In less than two months from today’s ticket-line clusterfuck, Zoostation will headline this year’s San Francisco St. Patrick’s Day parade.

The Sledge has the good sense to know that waiting in line for tickets is for complete rubes. You’re competing against scalpers and fans at 3,300 other Ticketmaster locations, not to mention thousands more calling in on Ticketmaster’s nineteen international phone lines.

That’s why he has decided to try his luck online at Ticketmaster.com via his new home DSL hookup. Normally, the Sledge sleeps in on Sunday mornings after a long show the night before, but the band didn’t play last night, so at 10:10 a.m. he is wide awake and intent on scoring a few seats.

Aside from sporting the Edge’s pasty-faced skin and goatee, little about the pajama-clad man or his surroundings would indicate that the Sledge is such an ardent fan of U2. He keeps his guitar and other memorabilia locked up downstairs, and wears the Edge’s signature skull cap only onstage.

The Sledge sits in his living room sipping coffee, cradling a wireless laptop, and typing in odd, garbled words that appear in a picture on the Ticketmaster Web site. His computer displays a scratched-up assortment of letters that appear to spell the word “bungle.”

“Bungle,” the Sledge types, and then hits the “enter” key.

But no dice; instead of returning with tickets, the Web site serves up a server error instead. As the employee of a computer company by day, the Sledge knows enough to hit his browser’s “refresh” button instead of restarting the process from scratch. Another distressed word appears.

“Gekko,” he types, once again followed by “enter.” Another server error.

“Frugel.” Nothing.

“Marsen.” Nada.

Ticketmaster says that making customers retype the word in the picture helps it ensure that users are who they say they are. But today it seems to be keeping everyone out. Horne’s wife is in another room doing the same thing.

“Anything yet?” he asks, as he keeps typing.




“Nope,” his wife shouts.

Suddenly, the Sledge’s screen refreshes, then he’s in. He shouts to his wife and tries to click his way toward the prize.

But now the computer screen says the wait is ten minutes. The Sledge just stares. He buys tickets online all the time and the system has never been this slow.

He clicks refresh, and now the wait is an estimated twenty minutes.

The Sledge sits back, sighs, and sips his coffee. Scalpers ruined the fan club presale, he knows. There must be tons of them in here too.

Elsewhere in the East Bay — on the other end of the spectrum from the unfortunate suckers in line at Tower — is a man in his late thirties whose wife and kids have gotten used to sitting in the front row at shows. He’s a professional scalper whom we’ll call Jim Johnson. He’s in his office on the phones with some of his runners. Johnson hires many, many runners to stand in line, call up Ticketmaster, and surf the Internet for tickets.

“The pull is tight,” Johnson says as calls come in. Lots of demand all over the place — and not just from scalpers.

“Everything that normal people do to get tickets, we do too,” Johnson says in a rapid-fire salesman’s voice. “We just plan much longer, work harder, and do them all at once. … What we’re selling here is time. The time it took for us to get the tickets, the time you don’t have to spend waiting in line for them.”

For all the hoopla about how the Internet was supposed to change everything, it did fundamentally alter the universe occupied by ticket buyers, scalpers, brokers, and agencies. Within the span of roughly a decade, ticket agencies had to contend with a completely new distribution channel that grew from virtually nothing to $1.1 billion in a decade, according to research company Jupiter Media Matrix.

“The Internet in general and eBay in particular have changed the dynamics of brokering and scalping across the continent,” says Zennie Abraham of Oakland’s Sports Business Simulations. “The secondary ticket market has exploded, incidents of fraud have exploded, and the artists, venues, and primary ticketing agencies are unhappy about all the revenue that is going somewhere else. And the government isn’t collecting tax revenue on those gray-market transactions.”

Abraham notes that it is now cost-effective for regular ticket buyers to purchase four tickets to a high-demand event even when only two are desired, because the extras can easily be sold online for a profit — at least in a state such as California, where scalping is legal. Not only is every ticket buyer a potential scalper, but career scalpers can instantly quote national real-time prices for tickets.

Scalping has become a commodities market, with tickets bought, sold, rebought, and resold like stocks on electronic boards such as StubHub and Tickets.com. Brokers inhabit every proverbial corner of the Internet. Peer-to-peer auction and sales sites such as eBay and Craigslist have been largely co-opted by scalpers and professional brokers — as well as many, many fraudsters.

Johnson, for instance, like his fellow ticketing professionals, started planning for the U2 sale about five months ago, and has been working the pulls since Tuesday, Bloody Tuesday. Preliminary results look good. “We got some,” he says, being deliberately vague in the way you might expect from someone who agreed to be interviewed only if identified by a pseudonym. “I would’ve liked more. There needs to be five more shows. This whole profession’s in a slump. Used to have a buy like this a couple times a year.”

By 10:30 a.m., the runners phone in with two tickets here, four tickets there — all just ready to be marked up for a couple times their face value and sold internationally to the highest bidder. Johnson consults his seating chart from the San Jose HP Pavilion with its 17,483-person capacity. In fifteen minutes, the April 10 second show will go on sale. There’s still time to pull more, but he knows he isn’t alone.

The people in line aren’t the problem.

The people on the phone will be tied up till their hair turns blue.

The people online typing in nonsense words stand a better chance; but even then, Johnson isn’t concerned.

Within the last few months, Johnson has learned about a new kind of player with an almost insurmountable advantage, an edge that no regular fan could possibly afford, but one that every major scalper seems to be getting.

All those millions of hits on the Ticketmaster server? Johnson knows that many of them are not human.

Imagine waiting in line for hours to buy a ticket to see your favorite band, only to have a pack of robots swarm in and elbow you out of place at the last minute. The garbled words at Ticketmaster.com are there to stop computer programs from logging on and buying tickets automatically. But word among savvy scalpers is that this safeguard is breakable. The most high-tech scalpers have software that allows them to crack these character-recognition tests and proceed with a fully automated ticket-buying transaction.

You don’t even need to be a computer nerd to make the program work. You can outsource it to someone such as Greg Mori, a former UC Berkeley doctoral candidate who has pioneered giving computers the ability to read through visual clutter. Ever since late 2002 — when The New York Times published an article about Mori’s success cracking Yahoo’s online character-recognition test — hundreds of hackers have beat a figurative path to his door.

Initially, Mori had only the slightest idea why anyone would pay for his code, which simply deciphered the word in a distorted image that Yahoo sent to people who wanted to open one of its free e-mail accounts. Visitors to the site were asked to decode the distorted image — called a Completely Automated Public Turing Test to Tell Computers and Humans Apart, or CAPTCHA — as a way to verify that they were human. They then typed in the letters of the word in a box underneath it, sent it back to Yahoo, and received their account. Yahoo’s optical character-recognition test was designed to keep automated programs called bots from automatically registering for thousands of new e-mail accounts to be used for spamming and other nefarious purposes. Up to that point, computers couldn’t effectively pass the test.

“There was this big burst of activity from random people I’d never heard of,” Mori says. “It was always hard to tell who they were. Half of them had Hotmail or Yahoo or other free e-mail accounts. They could be anywhere.”

But eventually, some of Mori’s correspondents explained the utility of such optical character recognition to its inventor, as in the following e-mail:

Subject: Wow Great Job on your OCR program…… Could you make a program ?

Date: Tue, 01 Feb 2005 10:39:50 -0500

From: [email protected]

To: [email protected]

My dear friend just sent me this article and I am wondering. I own a ticket company that frequently buys tickets from Ticketmaster. There are a lot of brokers that have developed OCR programs and have automated the purchasing of tickets thru Ticketmaster and other venues directly.

Some can even have 4 process buying tickets on one computer at the same time.

Because quality tickets sell so fast we are being shut out by people who already have this soft ware or similar. I am not a programmer and I wondered how much would it cost to see if you could write something of this nature. Thank You

At first, Mori was besieged with hackers offering him up to $20,000 for his code. The numbers have since dwindled to a relative trickle, but he still gets a few every week. “I don’t consider selling,” he says. “Maybe it’s my morals.”

There are plenty of other people out there, however, who possess Mori’s skills but not his ethics. They are doing business with scalpers who then use such programs to attack the Web sites of various corporations — from ticket brokers, to e-mail providers, to financial services such as PayPal. The security firm Symantec reported last September that malevolent bots on the Net grew from 2,000 at the beginning of 2004 to more than 30,000 by June. “They basically have bots continually hitting Ticketmaster’s server, asking if there are any front-row tickets available for Britney’s next concert,” Mori says. “They grab all the good seats and then resell them at a markup.”

Jim Johnson has never interacted with Mori, but someone with similar skills contacted him in December of 2004. A doctoral student from Michigan e-mailed him an offer to sell such a program for $20,000, or for a monthly fee. Johnson says he has tested it and was satisfied, but won’t pay up until the guy flies to California, installs it in person, and trains him how to use it. After all, $20,000 is a lot of capital for a small businessman to drop on a potential scammer out of the Midwest.

Still, scalping is his livelihood. Johnson never meant to make it his life’s work, but he’s a good organizer and planner, and scalping rewards such skills. He isn’t one of those street hustlers out there in front of Warriors’ games on cold nights with badly printed counterfeit tickets and no teeth, parking cars during tough times. And times are tough. U2 is the exception, not the rule.

If Johnson had used the hacker’s program during the past half-hour, he might have scored rare seats worth thousands of dollars more. Could he increase his yield similarly by investing $20,000 in more traditional runners and contacts? He just isn’t sure. In the meantime, he wonders, “Am I getting screwed here?”

Johnson might feel a bit more certain if he were to discuss the matter with a representative of Ticketmaster or Tickets.com, its biggest online rival. Officials with the two companies would grudgingly tell him that, yes, automated programs are trying to buy tickets on the Internet. They have been since the day tickets were first available online.

Tickets are a commodity and Tickets.com CEO Ron Bension says people will do anything to get their hands on something with this kind of markup, on the order of $15-$30 billion per year for scalpers worldwide. Bension has been dealing with bots buying up tickets on his Web site for years. In fact, his own company used bots to scour Ticketmaster’s site for prices, until the industry titan sued Tickets.com in the late ’90s and got it to stop.

These days, Bension says, Tickets.com receives bot attacks constantly and recently installed a character-recognition test similar to the one on the Ticketmaster Web site. Successful bot activity dropped by 90 percent, he adds, but some hackers are still getting in. “Every major broker has one, and they are innovating,” he concedes.

Ticketmaster, the world’s largest ticket agency and owner of one of the Internet’s largest e-commerce sites, claims that it has the problem under control. Executive vice president David Goldberg says the ticketing giant is aware of bots attempting to penetrate its system, but says its character-recognition test keeps them out. If any get in, they can be detected in other ways that he prefers not to describe — to preserve the secrecy of the methods. Goldberg adds, however, that Ticketmaster and other sites control the number of purchases that can be made per credit card or mailing address, as one method to control scalping. He says Ticketmaster also enforces ticket limits as low as two per credit card, and will reject orders from credit cards whose billing information doesn’t match up with the shipping address. They also quietly sue people and refer cases to law enforcement, Goldberg says, but he declined to point to any such cases.

Although Goldberg is hesitant to reveal much about Ticketmaster’s security measures, his competitor Bension spells out what any computer security expert will tell you. You can detect bots through their behavior patterns. For instance, if something is pinging a server one thousand times a second, it’s not a person. Bots are persistent. Still, Bension knows Tickets.com is a step behind the scalpers. “We’re in a nuclear war with these people, and we only have an edge for a moment,” he says.

The world’s most famous hacker, Kevin Mitnick — who was jailed for hacking Sun Microsystems in the early ’90s — says Bension should be concerned. Bots are continually reprogrammed to look more and more human.

“What we have here is a question of verifying user authenticity, and there’s no sure-fire way to do that with behavior analysis,” Mitnick says. “I heard of bots playing poker with human opponents online and winning tens of thousands of dollars. The sucker never even knew. Something like ticket buying with built-in OCR wouldn’t be that complicated.”

Jim Johnson is behind the curve, but who locally could be ahead of it? Other scalpers are either tight-lipped or clueless. Maybe a dozen list themselves in the phone books as brokers, and the boldest advertisement belongs to San Francisco’s Mr. Ticket. The agency’s manager, who identified himself only as Richard, says he won’t comment on or off the record about automatic scalping programs. “I’m not going to talk about that,” he says after four phone calls, clearly annoyed. “That’s like the colonel talking about what’s in his secret recipe for fried chicken. What do I have to gain by talking about that?”

Another veteran scalper, who agreed to talk only if he were not identified by name, says scalper friends used bots against Ticketmaster until the deployment of that Web site’s CAPTCHA. Since then, they have stopped, and he doubts it’s worth it anyway. “Online buying is good for buying on a Tuesday for a Tuesday show that no one’s going to go to,” he said. “The best way to get tickets is to know a promoter, or someone else who can get you access.”

Indeed, tried-and-true scalping methods such as “knowing a guy” or bribing a store clerk with $100 to print out some tickets for you — which is known as “icing” in the industry — are definitely easier.

Johnson says he doesn’t participate in bribery or insider trading, and at 11:00 a.m. it doesn’t appear to matter. Five months of planning have paid dividends. The lines outside Ticketmaster locations are hopeless, the phones are jammed, and his runners aren’t getting much from the Internet anymore. There’s nothing left to buy. All that’s left is selling and trading to boost markup. He’ll do it through a nascent international market of Web sites, the top of the list being eBay and Craigslist. Tickets are already going for $1,000 a seat in some sections.

Industry observers believe that on average 10 percent of event tickets are scalped every year, with rates climbing as high as 20 or 30 percent at performances with the popularity of a U2 concert. In the case of the band’s forthcoming two-night stand in San Jose, that means as many as 10,000 out of 34,000 tickets may ultimately be scalped.

There just aren’t enough superbands, Johnson laments.

After a wait of twenty minutes, the Sledge finds what he is looking for online. He gets in, enters his payment information, and scores two upper-deck seats for $100 plus service fees. Combined with two lucky tickets he scored on Tuesday, Bloody Tuesday — plus the pull of his fellow bandmembers — it’ll be enough for the whole band and friends to go.

“I used my star power,” he jokes. “No, it was just luck and perseverance. I think a lot of people got put off by the server errors, getting hung up on the word page. I knew if I kept hitting page refresh and typing in the word, I’d punch through.”

The Sledge isn’t surprised to learn that he was competing with scalper bots for a place online. “Wherever they try to put up a barrier, someone is going to be one step ahead of them, trying to crack it,” he says.

Will he scalp his extra tickets on eBay, as an entire cottage industry’s worth of ticket speculators has already started doing?

“I’ve decided against it,” he says. “It would be just horrible ticket karma, considering my affiliation with the band. If I do get rid of them, it’ll be for face value on Craigslist or eBay.”

The only thing now left for the Sledge to do is plan a special performance of Zoostation the night of the concert.

Meanwhile, back at Tower Records, people start peeling off toward home, flashing terrible looks at Horsman, especially since a scalper we’ll call Max walked in. A local regular who specializes in Warfield and Fillmore tickets, Max is an elderly African-American gentleman who has cultivated a relationship with Horsman over the months. On days like this, she expects to see him along with other regular ticket buyers.

“How bad is it?” he asks Horsman.

“It’s bad,” she says.

“You’re not letting that guy cut in front, are you?” blurts a fan in line.

“No,” responds Horsman, who looks back toward her monitor. Max doesn’t even bother going to the end of the line. He walks off, while Horsman tries to pull six individual seats from throughout the HP Pavilion and sell them together in a package. “You won’t be able to sit together, but at least you’ll get in,” she tells the customer.

The system continues to drag, and a new message pops up on the screen: “The machine’s internal temperature is reaching a critical level.”

Horsman has never seen this message before. She keeps pecking at her keyboard and searching for individual tickets behind the stage, or wherever.

“If I were you, I’d go to a cybercafe and try to log on there,” she shouts toward the back of the line. More people groan and walk off, dejected.

By 11:05 a.m., Horsman smells smoke. Her computer overheats and shuts itself down. Truthfully, she’s kind of glad it’s over. Tickets are just sold out: more than 30,000 in 45 minutes. Fans never even had a shot at floor seats.

“This was horrible,” she tells another clerk.

But aside from the hassle, it’s been no real skin off her back. She feels her customers’ pain, but also has to concede, “All the employees here hate U2.”

How to Buy Scarce Tickets

Seven tips to help you beat the scalpers.

Scoring good seats to the November 8 and 9 U2 shows just scheduled for the Oakland Arena no longer requires long, cold nights camped out in front of some record store or venue. Nowadays, the sleepover tactic can prove downright stupid. Real fans plan ahead. And they use technology to their advantage. A few tips:

1. Register with the fan club. Some big bands want true fans to get first crack at tickets, and will offer presales to registered members of their fan clubs. At a cost of around $20, registered U2 fans got a special password granting access to a secret corner of Ticketmaster.com almost a week prior to the general sale. The catch: fans weren’t the only ones passionate enough to plunk down a few extra bucks for access. Scalpers bought multiple fan club memberships under different names and used the access to troll for pay dirt. The system jammed, and real fans fumed.

2. Plan your attack. Scalpers make money off the laziness of concertgoers, so know the ins and outs of the three main ticket-dispersal systems: online, phone, and in person. Bookmark the Ticketmaster.com page and familiarize yourself with its structure. You can even enter payment information ahead of time so the site can process your order in a speedy, seat-saving click. Put the hotline on speed dial. Know where tickets are going on sale, and at what time. Lastly, know your payment options. The buyer’s name, shipping address, and billing address often have to match, or you’ll be nose-bleeding it with the other rubes who paid double.

3. Take multiple routes. Even simple water molecules take the easiest route downhill, so why are you trying to muscle out a dozen jarheads in front of Tower Records in Emeryville? Get online at work with six of your buddies. Get those same six buddies on the phone to Ticketmaster. Recruit siblings and spouses to help with the total assault on the phone lines, modems, and ticket centers. Communicate via cell phone, and you have a dozen stabs compared to one. Swarm attacks put you in the 98th percentile of effective ticket buyers.

4. Get e-savvy. When the Web floodgates open at 10:00 a.m. on a ticket sale day, hundreds of thousands of fans and scalpers bum-rush the virtual door. The gatekeeper is a character recognition test designed to keep out automated ticket-buying programs. Problem is, everyone gets stuck in the bottleneck. Hit “refresh” in your browser when the word-test page lags. Enter the new word and hit “enter.” When the page freezes again, repeat until you get through.

5. Travel to obscure locations. It’s the fanboy’s dream: The entire world is clamoring for Radiohead tickets, and you’re in the basement of some suburban Nordstrom at the most underexposed ticket center in the Western Hemisphere. No lines, no hassle. There aren’t that many secret spots anymore, but the experienced advise simply heading inland. Walnut Creek, Concord, Davis — the farther you are from urban civilization, the fewer people have heard of the Walkmen or Amon Tobin, and the shorter the lines.

6. Seek out competent clerks. So you made it to your remote location, or you were the first in line at Tower Records in San Francisco. You’ll still need a Ticketmaster MacGyver to negotiate your transaction amid hundreds of thousands of orders clogging the system. A lot of ticket centers have one guru who knows more than anyone else about scoring seats. Do your homework and make sure he or she is there, or be prepared for the loudspeaker announcement of, “Ummmm, can I get some help at the ticket desk?”

7. Ignore the lemmings. It sounds crazy, but maybe you should try to seek out less-hyped music. For every scalper-frenzied, sold-out superband concert with optional DVD, there are approximately a million unexpected, intimate encounters between fans and their creators. Get indie cred and help feed starving locals. Seek out bands asking $5 at the door. Even if you hate the music, the cost is still a thirtieth of the price of a $150 U2 seat. And you can use the rest to buy rounds for the poor and hungry that Bono is always crooning about.

Happy hunting. — D2

Scalping the Scalpers

The ticket industry takes steps to quash illicit resellers — and take a cut itself.

Artists, venues, and ticket services would love to do business in a scalper-free world. It would mean more money, less fraud, and less bad publicity. So over the last few years, they’ve beefed up bot detection, toughened ticket-buyer identification, and laid even bigger plans to drain the scalper swamp of its estimated $15-$30 billion in annual revenue.

But to truly end scalping, ticket agencies may basically end up becoming scalpers themselves.

Primary ticket sellers like Ticketmaster have moved into eBay-style auctions and scalper-style ticket resale to scoop up profits that would otherwise go to scalpers. Ticket sellers also are personalizing tickets as the airlines do, making them nontransferable and hence unscalpable.

Ticketmaster began reselling — effectively scalping — tickets on its own TicketExchange Web site in 2002 and began auctioning tickets in 2003. Since then, Ticketmaster has conducted two hundred eBay-style auctions in less than two years, and more roll out every month. Ticketmaster prefers to call its auctions “dynamic pricing,” which responds to the changing value of the ticket as supplies become scarce and showtime approaches.

“Currently a top artist is paid for an arena full of seats that were sold at face value, even though some of those seats were resold at many times their face value,” observes ticket broker Zennie Abraham of Oakland’s Sports Business Simulations. “Why doesn’t the artist just buy the whole ticket inventory from Ticketmaster and auction off the tickets on eBay? Then again, why doesn’t Ticketmaster auction the tickets without selling them to the artists?”

That’s precisely the plan. Instead of a scalper getting a ticket with a $50 face value and reselling it for $300, Ticketmaster auctions the ticket for what it can get, splitting the rewards with all the important parties.

Elsewhere, Ticketmaster’s TeamExchange lets season ticket holders of certain teams resell their tickets on a Web page maintained by Ticketmaster, sidestepping the occasional uncertainty of shopping on eBay or Craigslist. This clean, well-lighted place to scalp charges another service fee of $25. Twenty teams including the Warriors now use TeamExchange.

But the real rumbling in ticketland comes from moves toward airline-style prevention of resale — a move to slay the ticket resale industry and permanently restrict fan freedom. “We do so little in terms of security to know who goes into a venue of 18,000,” says Ticketmaster VP David Goldberg. “Ultimately, we’re going to have a duty to be able to provide it.” Tickets would be bought with names printed on them, and fans would flash identification to enter venues with those tickets.

“What we’ll see is the elimination of paper tickets,” Abraham speculates. “They’ll be replaced with some sort of electronic process that will be much more difficult to counterfeit. Street scalpers will carry wireless devices capable of transferring ticket ownership.”

Scalpers, place your BlackBerry orders, pronto. — D2


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