BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Brokers, Bots And Insiders: Why 'The Average Fan Has No Chance To Buy Tickets At Face Value'

This article is more than 8 years old.

According to a damning report released by the Office of New York State Attorney General Eric T. Schneiderman, "the average fan has no chance to buy tickets at face value." The report and investigation were prompted by regular complaints from New Yorkers who are unable to buy tickets to concerts and similar events that sell out immediately and are only available on ticket resale sits at exorbitant markups.

The report, which is titled "Obstructed View: What's Blocking New Yorkers from Getting Tickets," focuses on the ticket distribution system in New York, but many of these findings can be applied to the general public.

For in-demand events, tickets can sell out in minutes upon release.

The problem is not simply that demand for prime seats exceeds supply. Ticketing, to put it bluntly, is a fixed game... On December 8, 2014, when tickets first went on sale for a tour by the rock band U2, a single broker purchased 1,012 tickets to one show at Madison Square Garden in a single minute, despite the ticket vendor's claim of a '4 ticket limit.' By the end of the day, the same broker and one other has amassed more than 15,000 tickets to U2's shows across North America.

This volume is astronomical, but how much brokers invest in ticket purchases is even more astounding. The report gives examples of twelve brokers who purchased more than $3 million on Ticketmaster for events in New York and the greater area.

This trend shows no sign of stopping. Tickets for Adele's upcoming tour sold out in 10 minutes and due to overwhelming internet traffic, fans were unable to access the ticketing page for over 45 minutes. given the record-breaking success of her 25 album, the prices for resale tickets will likely be exorbitant.

Some brokers leverage their relationships with venues and sports teams, take advantage of ticket pre-sales and employ multiple credit cards. But most primarily utilize illegal technology to block fans from buying tickets.

It's nigh impossible for fans to compete with "Ticket Bots," a form of illegal software.

Many brokers use Bots to buy hundreds and thousands of tickets in minutes. The New York Times reported in 2013 that Ticketmaster estimated "60% of the most desirable tickets for some shows" on the secondary market are bought by Bots.

Prevention measures such as the CAPTCHA test ("Completely Automated Turing test to tell Computers and Humans Apart") and ticket limits are less than effective. The blurry images that strain your eyes are easily bypassed by many Bots. As for ticket limits, they are inconsistently enforced by ticketing platforms and have an easy loophole. For instance, Ticketmaster's ticket limit only applies to single transactions. This means that Ticketmaster permits a user to make multiple purchases of eight tickets each.

Music artists in addition to fans are frustrated with the current situation. In February 2011, band LCD Soundsystem spoke out against brokers in a blog post titled, "[expletive] you scalpers. terminal 5 shows added."

we’ve come up with the best solution i can think of, as quickly as possible so as to deflate the market for those scalping scum[expletive]...we’re going to play 4 shows at terminal 5 in nyc leading up to the msg show. i just want to give people who actually want to see us a chance to see us. for a reasonable ticket price...oh—and a small thing to scalpers: “it’s legal” is what people say when they don’t have ethics.

LCD Soundsystem's response--while generous--also reflects how artists have little recourse when it comes to brokers. Ticketmaster can investigate violations of the the ticket limit but will only do so if an artist specifically requests the audit.

Price-gauging is rampant on the resale market.

This situation is exacerbated by how brokers escalate prices on the secondary market. Sometimes brokers resell tickets at prices over 1000% of the face value. According to the NYAG's analysis of six ticket brokers, the average markup was 49% of the face value.

This also applies to events that intended to be free to the public. For instance, some tickets to Pope Francis's New York visit had asking prices of over $5,000 per ticket.

Does this phenomenon occur outside of New York? Absolutely. For Super Bowl 50, the average ticket on the secondary market is reselling for $5,335. For the most desirable seats, tickets have sold for more than $10,000, which is much higher than that of the previous five Super Bowls.

The majority of tickets for in-demand concerts are allocated to holds and pre-sales, not the general public.

The NYAG found that on average, only 46% of tickets are reserved for the public. This means a substantial number of tickets are never available to the average fan.

For most popular concerts, over half of tickets are put on "hold" either for industry insiders, such as venues, artists, and promoters, or are set aside for "pre-sale" events for non-public groups. On average, 16% of tickets are allocated to these insiders. "Approximately 38% of tickets to in-demand shows in New York are reserved for select groups of fans and cardholders of major banks and financial institutions, including American Express, Citibank, and Chase," the report states.

The state of the "fixed game"

Between brokers, bots, and industry insiders, it's no wonder that members of the general public are frustrated with ticketing distribution system. The average fan has few methods of recourse when it comes to these systematic issues.

That said, public criticism is not entirely ineffective. Recently, the story of a customer's outrage with StubHub went viral. Laker's fan Jesse Sandler lost his tickets to Kobe Bryant's last home game because the seller cancelled his purchase. Following Kobe's announcement, ticket prices for the game jumped nearly 1,000%. There is a 20% penalty fee for sellers that cancel an order, but the seller would profit more by paying the fee and selling the tickets again at the higher price. StubHub has tried to remedy the situation, but clearly their reputation has been damaged.

However, it's a David and Goliath situation. Brokers have technology and lax enforcement on their side. Rebelling against the secondary market means missing out on desirable events. The situation probably won't change in time for you to see Adele at Madison Square Garden in September.

The original report proposes solutions and additional findings regarding the ticketing system inequity. If you're one of many fans that has been shut out by the resale market, I recommend you give it a read.


Findings reported by the State of the New York Attorney General. All graphics are from the NYAG's report, "Obstructed View: What's Blocking New Yorkers from Getting Tickets."