Sheeran manager condemns ‘absurd’ resale prices
Ed Sheeran’s manager, Stuart Camp, has testified in court against touts selling tickets for a charity concert for almost 1,000 times above face value.
Speaking at Leeds crown court in the UK, Camp told the jury that he had decided to take action against resellers after spotting tickets for a £75-ticket charity show flogged for £7,000 on secondary ticketing site Viagogo.
No artist fee had been charged for the show, which took place at London’s Royal Albert Hall in March 2017, in aid of the Teenage Cancer Trust.
“I bet none was donated to charity,” Sheeran’s manager told the jury. “This is absurd. We just really wanted to make sure we weren’t in that situation again.”
The defendants in the trial – Peter Hunter (trading name Ticket Wiz) and David Smith (BZZ) – reportedly spent over £4 million from June 2015 to December 2017 buying tickets on primary sites using automated ticket-buying software, or bots. The pair then sold the tickets through secondary platforms for a total of £10.8m. Both men deny the charges.
Following the incident, Camp implemented a no-resale policy for tickets to all stadium dates of Sheeran’s record-breaking ÷ (Divide) world tour, the highest grossing in history.
Ticket sales were limited to a small number of primary sellers, with only resales through dedicated fan-to-fan platforms permitted. Fans were informed that tickets bought through secondary platforms would not be valid and told to bring the credit or debit card used to purchase the tickets to guarantee entry.
“Our theory is that we want everybody to be able to come to a show. We’d rather put on a million more shows for a lower price,” explained Camp.
“Our theory is that we want everybody to be able to come to a show”
“I’d rather keep people happy and people saying ‘you know what, we’ll do that again some time’.”
The manager stated that Viagogo, which last month made headlines for its US$4bn purchase of fellow secondary ticketer StubHub and its reappearance on Google advertising, “ignored” the policy.
However, a Viagogo spokesperson claims the letter “wasn’t ignored”. Rather, says the spokesperson, “we disagreed with his [Camp’s] approach.”
“Our position is, and always has been, that it is unfair to restrict fans’ access to an event just because of where or how they purchased their ticket,” continues the spokesperson. “We now list restrictions clearly at the top of the web page in line with those of the venue and our customers are always protected by our ticket guarantee. However, we fundamentally believe the consumer should be allowed to sell on tickets they either no longer want or can’t use, as part of a competitive market.”
The scheme received criticism from some fans who claimed the regulations made it impossible to shift unwanted tickets.
At the time, a spokesperson from Kilimanjaro Live, who co-promoted Sheeran’s UK stadium dates, said,“Whilst we understand the frustration of someone who is unable to resell and wants to drop the price accordingly to give themselves a better chance of recouping some of their money, unfortunately this throws up more questions than answers.
“From the outset we have tried to find a way to be fair to fans, to facilitate the ethical resale of tickets and to leave as many fans as happy as possible whilst preventing the daily horror stories of them being ripped off by ticket touts profiting from the panic to get a ticket to see Ed. We have undoubtedly had a huge impact here.”
Photo: © User:Colin /Wikimedia Commons/ CC BY-SA-4.0
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US Congress investigates ticketing industry
The United States House of Representatives’ Energy and Commerce Committee yesterday (21 November) opened an investigation into what it deems the “potentially unfair and deceptive practices” of the primary and secondary ticketing market.
Members of the Energy and Commerce Committee sent letters to Live Nation/Ticketmaster, AEG, StubHub, Vivid Seats, TicketNetwork and Tickets.com, requesting information pertaining to the companies’ ticketing policies.
“The Committee, which has broad jurisdiction over consumer protection issues, is concerned about potentially unfair and deceptive practices occurring in the primary and secondary ticket marketplace, many of which have been documented in consumer complaints, press stories, and government reports,” write committee leaders.
In particular, representatives express concern over “high, hidden fees”; a “lack of transparency” surrounding ticket availability; the presence of speculative tickets – or those not yet in the possession of the seller – on secondary sites; the use of “deceptive” practices by white-label websites; and “limiting” restrictions on the transferability of tickets.
“This information will help demonstrate why we must pass my Boss Act to finally put into law hard regulation of the marketplace”
The Energy and Commerce Committee has previously taken action “to protect consumers”, such as banning tickets bots, or the use of software to bulk-buy tickets. In June, the Congress reintroduced the pro-transparency Boss Act (Better Oversight of Secondary Sales and Accountability in Concert Ticketing), following a workshop by the Federal Trade Commission into online ticket sales.
The act’s provisions include forcing primary sellers to disclose how many tickets will be offered for sale and make clear any fees up front, as well as prohibiting promoters and ticketing companies from restricting where buyers can resell their tickets.
Congressman Bill Pascrell, the principle sponsor of the act, comments that there is currently a “glaring lack of regulation” in the US ticketing marketplace.
“That one of Congress’s most powerful committees is investigating the worst anticompetitive and anti-consumer behaviour in the marketplace is a watershed moment,” continues Pascrell. “This information will help demonstrate why we must pass my Boss Act to finally put into law hard regulation of the marketplace.”
The ticketing companies have until Thursday 12 December to respond to the Energy and Commerce Committee’s request for information.
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FTC workshop calls for greater enforcement of bot ban
The US Federal Trade Commission (FTC) on Tuesday held its first workshop examining online ticket sales, inviting lawmakers, academics and industry representatives from both the primary and secondary markets to examine consumer protection issues in how event tickets are sold on the internet.
Announced last October, the 11 June event included contributions from Ticketmaster’s head of music in North America, David Marcus, Live Nation president of US concerts Bob Roux, SeatGeek founder Russell D’Souza and International Association of Venue Managers (IAVM) chair Michael Marion, among others, and tackled alleged anti-competitive practices in the primary market, as well as greater enforcement on the US ban on ticket bots.
According to Law360 (via CMU), Joe Ridout of consumer rights group Consumer Action said the FTC being able to fine those using automated software to buy tickets is not a big enough deterrent. “The penalties just aren’t sufficient to deter bad actors without criminal penalties,” he told the panel, adding that the FTC should also bring tech firms into the debate on bots: “We need to do more if we’re going to get to the bottom of who’s behind bots”.
Addressing whether fees should be applied to the price of tickets up front, as in several other countries, Vox reports that both primary and secondary ticketers appeared to welcome a move towards that model. “Essentially every person on the panel agreed, appearing to politely beg the FTC to regulate them so that people would like them again,” the site reports, referencing customer dissatisfaction with ticket fees.
Gary Adler, executive director and counsel of the National Association of Ticket Brokers (NATB), which lobbies on behalf of ticket resellers, says both primary and secondary sellers appeared united on the need to increase transparency and end deceptive practices in the US ticketing market.
“There was a lot of mutual interest at the workshop, specifically around reducing fraud and deceit in the market and increasing transparency”
“I am happy the FTC invited me to participate, and I hope we can harness the momentum from the workshop to see some positive change,” he comments. “The workshop marks an an important day for anyone who enjoys live events and purchases tickets, or who works in the ticketing business and competes with large and powerful companies that control most of the supply of tickets and their price. There was a lot of mutual interest at the workshop, specifically around reducing fraud and deceit in the market and increasing transparency for consumers when it comes to ticket prices and fees.”
Adler says regulators must now push for a system in which consumers are informed of the number of ticket holdbacks and comps at the time they go on sale. “At the workshop it was revealed again that for high-demand events, oftentimes large percentages of tickets never go on sale to the public,” he comments. “Fixing this central problem should be a top priority so that consumers have the information they consider meaningful when deciding whether or not they are being offered a fair deal on tickets.”
Efforts to introduce similar transparency measures elsewhere have been unsuccessful: in 2017, Ontario, Canada, dropped plans for legislation that would have required ticket sellers to disclose how many tickets are available to the public for a given event seven days before they go on sale, allegedly under pressure from the primary sector.
“This begins most importantly with the first, initial sale of the ticket, but also during any resale of that ticket too,” continues Adler. “Hopefully the workshop is the catalyst for much-needed change in the ticketing system – as there is existing authority at the FTC as it relates to deceptive advertising and marketing practices which means the commission can act now, and where new authority is needed, there were renewed calls at the workshop for federal legislation to provide that authority or to create new rules for the ticketing market.”
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“Landmark” EU legislation against ticket bots
Members of European Parliament (MEPs) have voted to outlaw the use of automated ticket-buying software or ticket bots, directly addressing the issue of ticket resale for the first time.
The new legislation also requires resellers to declare whether they are professional traders, strengthens existing regulations, and sets the minimum standard by which EU members must abide.
Ticket bots are at the forefront of discussions surrounding secondary ticketing, enabling touts to bulk buy concert tickets and resell at inflated prices. A recent study revealed that bots generate nearly 40% of all ticketing traffic, impacting both primary and secondary ticketing sites.
This is the first time that the European Parliament has set a common standard for ticket resale in cultural and sports events.
The legislation will form part of Annex 1 (#23a) of a revised Unfair Commercial Practices Directive, which lists commercial practices which are unfair in all circumstances and will read: “reselling event tickets to consumers if the trader acquired them by using automated means to circumvent any imposed limit on the number of tickets that a person can buy or any other rules applicable to the purchase of tickets.”
“Everyone apart from touts loses out from bot bulk-buying of tickets”
Conservative MEP Daniel Dalton led the move to implement the legislation as part of the New Deal for Consumers initiative, which aims to strengthen consumer rights. It is hoped that the ruling will allow for more stringent provisions at national level.
“Everyone apart from touts loses out from bot bulk-buying of tickets,” says Dalton. “Real fans are either unable to see their favourite team or artist or are forced to pay many times the face value price, whilst event organisers are seeing their purchasing limits flagrantly violated.
“This first ban at a European level is an important first step, with the possibility to go further in future depending on how the ban works in practice.”
“We welcome the move to curb the use of bots in this first Europe-wide anti-touting law,” states Katie O’Leary of the Face-Value European Alliance for Ticketing (FEAT), an anti-ticket touting organisation dedicated to tackling resale from a continent-wide approach.
“As well as requiring professional sellers to identify themselves, it also enables member states to go further and potentially regulate the resale price of tickets.
“This [harmonised] approach is critical as secondary ticketing companies tend to exploit regulatory gaps between countries”
“Most importantly, this represents the first step in harmonising regulation across Europe. This approach is critical as secondary ticketing companies tend to exploit regulatory gaps between countries. There is still much to be done and we will be campaigning for tougher legislation in the next parliamentary term,” adds O’Leary.
Dr Johannes Ulbricht, a lawyer for German Music Promoters Association BDKV says his company supports the FEAT initiative, calling it “a step in the right direction”. FEAT is also supported by FanFair Alliance, Prodiss and the European Music Managers’ Alliance.
The European Council will formally adopt the legislation in June. Member states will then have a maximum of approximately two years to transpose the amendments into national law. The exact deadline will be set out in the directive once finalised.
In the UK, the ruling will be applicable throughout the two-year Brexit transition period, forming part of the country’s incumbent laws on consumer rights. The new legislation will aid national bodies such as the Competition and Markets Authority and the Advertising Standards Authority.
The UK introduced its own law criminalising ticket bots in 2017. The EU ruling follows the introduction of targeted bot legislation by other governments, including those in the United States, Ontario, British Columbia, South Australia and New South Wales.
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British Columbia introduces ticket sales act
The Legislative Assembly of of British Columbia (B.C.), Canada’s westernmost province, has introduced a new Ticket Sales Act to establish a regulatory framework for the sale and resale of tickets to live events.
The ticketing bill prohibits the use of bots or automated ticket-buying software and introduces transparency requirements for both primary and secondary ticket sellers, including the declaration of the total price and face value of any ticket, as well as any additional fees or service charges.
Under the act, secondary ticket sellers must issue a refund guarantee to purchasers, as well as disclosing their identity, location and contact information.
The new legislation also places a ban on speculative tickets and on the sale of tickets that sellers do not have in their possession or control.
“These changes are going to make our live event industry in B.C. even better for the people who matter most — the fans,” says Mike Farnworth, minister of public safety and solicitor general.
“The new laws will make the ticket buying process more transparent and equitable for consumers, so that everyone in our province will have a fair chance of getting tickets for their favourite acts and events,” comments Farnworth.
“The new laws will make the ticket buying process more transparent and equitable for consumers”
The Ticket Sales Act comes following a government consultation into British Columbian perspectives on the current ticketing process. The subsequent report reveals the main concerns among the public to be the difficulty of obtaining tickets on the primary market and the “unfair” pricing of tickets on secondary platforms.
The Canadian Live Music Association has congratulated the British Columbia government on the act. “This legislation is good for fans and it’s good for the growth and momentum of BC’s incredible concert sector which creates almost 7,000 jobs and contributes $815 million to BC’s economy,” says Erin Benjamin, president and chief executive of Canada’s national industry association.
Benjamin commends Farnsworth and his team for “their commitment to working with the live music industry” in developing the bill.
According to the International Ticketing Yearbook 2018, StubHub is the resale market leader in Canada. Ticketmaster is also involved in the resale business, through its Verified programme.
Canada’s most populous province, Ontario, introduced its own Ticket Sales Act on 1 July 2018, which banned bots and overhauled other areas of ticket selling. Ontario’s act also placed a resale price cap of 50% above face value on tickets which, along with other elements, proved controversial within the industry.
Alberta introduced its own ticket-selling legislation in August, with Manitoba following suit in December.
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Study: bots generate 40% of all ticketing traffic
Distil Networks, a global leader in bot mitigation, has released an in-depth study into the impact of bots on the ticketing industry, finding that nearly 40% of ticketing traffic is comprised of “bad bots”.
The study, developed by the Distil Research Lab, analysed 26.3 billion requests from 180 domains between September and December 2018. The results show that ticket bots – the automated software used by scalpers to bulk buy concert tickets and resell at inflated prices – are major drivers of traffic on ticketing platforms.
Bots lead to high infrastructure costs and poor website performance. The activity also “compromises the integrity of ticketing websites and impacts the user experience,” according to Distil Networks.
The study finds that primary ticketing markets are the main targets of bot activity, experiencing a higher volume of traffic from bots (42%) than secondary ticketing platforms (24%) and venues (27%).
The vast majority of bots launched against ticketing companies (85%) originated in North America, and 78% of bots classified as sophisticated or moderately sophisticated, often evading detection.
“Although the ticketing industry has led the way in terms of bot legislation, websites still face a huge hurdle when protecting against bad bots,” says Tiffany Kleemann, chief executive of Distil Networks.
“Although the ticketing industry has led the way in terms of bot legislation, websites still face a huge hurdle when protecting against bad bots”
“These automated tools attack ticketing websites every day, leveraging more advanced and nuanced techniques that evade detection. Any website that sells tickets can fall prey to this criminal activity, and a better understanding of the threat landscape can ensure the proper protective protocol is put in place,” adds Kleemann.
The usage of bots has come to the forefront of the music industry’s consciousness in recent years. Former US president Barack Obama passed the Better Online Ticket Sales (Bots) Act in December 2016, making the use of ticket-buying software a crime nationwide. The state of New York had previously initiated a statewide ban on bots.
The UK government followed suit in 2018, criminalising the usage of ticketing bots, along with Ontario, Canada, and the Australian states of Adelaide and New South Wales.
Distil Networks’ figures indicate the prevalence of ticketing bots and may serve to assuage concerns among music industry professionals that ticketing bots are a “red herring” in the debate concerning secondary ticketing.
Suspicions have arisen surrounding the lack of correspondence between the implementation of anti-bot technology and the prevalence of secondary ticketing, as well as the support that secondary ticketing platforms have voiced for the banning of ticketing bots.
A full version of the Distil Networks report can be found here.
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UK govt bolsters secondary ticketing regs
The British government has announced new regulations intended to protect UK consumers from “rip-off” secondary ticket prices.
Under the new rules, which come into force in April, resellers will be required to provide information about tickets, including the location of seats, disclosure of any restrictions and the original price of the ticket itself, as required by the Consumer Rights Act 2015.
For the first time, secondary sellers will also have to supply a unique ticket number (UTN) if the event promoter or primary seller specifies one, helping consumers identify the ticket’s seat, standing area or location.
Businesses who fail to comply are liable to face a fine of up to £5,000 for each breach, according to guidance published today.
Consumer minister Andrew Griffiths (pictured) says: “All too often, people are left feeling ripped off when buying tickets from resale websites. Whether it’s a major music festival or a stadium concert, people want to know they’re paying a fair price for tickets to see the events they love.
“If properly enforced, we believe these updates will better protect UK audiences and event organisers”
“We are already taking steps to crack down on touts using bots to bulk buy tickets for resale and the CMA is investigating suspected breaches of consumer protection law online, and today we are going even further, making it easier for consumers to understand what they are buying to help save them from rip off ticket prices.”
“Later this year, we will also publish a consumer green paper which will examine how we can help people to engage with markets to find the best deals,” he adds.
Adam Webb, campaign manager for anti-touting group FanFair Alliance, welcomes the announcement, saying that, “if properly enforced, we believe these updates will better protect UK audiences and event organisers. They should also provide greater clarity to secondary ticketing platforms of their legal responsibilities, and increase overall transparency in what is frequently a murky and under-regulated sector.”
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Ticketmaster blasts pro-bot ticket touts as “delusional”
Ticketmaster has hit back at what it calls “delusional posturing” by big-time ticket touting operation Prestige Entertainment, after the latter had the “temerity” to claim in court its alleged hoovering up of tickets to Broadway hit Hamilton using bots was “beneficial to Ticketmaster and its consumers”.
Ticketmaster accuses Connecticut-based Prestige of using an army of bots to purchase from its site around 30,000 tickets for Hamilton and other shows – a violation of its terms of service and, since the passage of the Bots Act in December 2016, illegal in the United States. According to the US$10m lawsuit, filed in the US district court for central California last October, Prestige was, over a period of 20 months, able to acquire 30–40% of TM’s total Hamilton inventory.
According to court documents, Prestige “commandeer[s] significant portions of available tickets for popular events, and, overall, have placed at least 313,528 ticket orders from 9,047 different accounts”.
Prestige has since sought to have the suit dismissed, arguing that Ticketmaster’s lawyers’ argument – that the use of bots, which need to repeatedly copy website pages “far in excess” of normal browsing in order to operate, violates the company’s copyright – would make any normal ticket buyer a copyright infringer, as as all web browsers download pages in order to display them.
“It would be impossible for anyone to access plaintiff’s [Ticketmaster’s] website without exposure to a claim of infringement and violation of law, with plaintiff having the right to pick and choose who gets prosecuted,” wrote Prestige’s attorneys (H/T TicketNews/Law360).
“It is Ticketmaster that bears the brunt of consumer discontent for a perceived lack of fairness in the ticket market”
It is also allegedly told Ticketmaster its buying up of thousands of tickets for hot shows is a good thing for the Live Nation-owned business, the world’s largest primary ticket reseller.
The ‘everyone’s a copyright infringer’ argument, say TM lawyers Manatt, Phelps and Phillips, is a “straw man”: While the company “expressly permits” its customers to “view” the site for non-commercial purposes – ie ‘normal’ ticket buying – copying “excessive pages at an excessive speed in order to purchase an excessive quantity of tickets for the purposes of reselling them” is in clear violation of Ticketmaster’s terms of use.
“Online commerce – and online ticketing especially – is under constant attack from illicit bot use,” Ticketmaster attorney Robert H. Platt told judge Otis D. Wright on Monday. “Ticketmaster has spent years in a war of attrition with users of bots, diverting substantial time, energy and resources in an often-vain effort to maintain a level playing field for consumers who simply want a fair chance to buy a ticket. California, New York, and the federal government have passed laws expressly prohibiting the use of bots to buy tickets, but defendants [Prestige], addicted to unseemly ticket-resale profits, remain undeterred. Ticketmaster therefore turns, as it has successfully in the past, to litigation against major bot offenders.”
“In their motion to dismiss Ticketmaster’s complaint,” Platt added, “defendants have the temerity to describe their prolific bot use as beneficial to Ticketmaster and its consumers”. “Such delusional posturing”, he said, is “no substitute for valid legal argument”, recommending the request to dismiss be “denied in its entirety”.
“Such delusional posturing is “no substitute for valid legal argument”
Should the suit continue, Ticketmaster is hoping for unspecified compensatory and punitive damages, believed to be around $10 million, and a court order to stop Prestige’s bot use.
Highlighting the perceived damage to the Ticketmaster brand by resale operations such as Prestige, Platt says: “Even assuming […] defendants pay stated ticket prices and fees when purchasing tickets, they still inflict significant harm on Ticketmaster, its clients, and legitimate consumers who simply want a fair chance to buy tickets without resorting to extortionate resale prices.
“By using bots and other methods to angle for an unfair advantage, defendants interfere with the ability of Ticketmaster and its clients to gauge and manage ticket demand [and] circumvent flows of commerce on the website and mobile app, and require Ticketmaster to go to extraordinary lengths and expense to try to detect and prevent the use of bots and to cancel purchases where bot use is timely detected.
“To the extent these nefarious efforts succeed, it is Ticketmaster that bears the brunt of consumer discontent for a perceived lack of fairness in the ticket market.”
The next hearing is set for 5 February.
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NSW outlines plans for 10% ticket resale cap
Ticket prices to entertainment and sports events in New South Wales (NSW) will be capped at a maximum +10% of their face value under proposed amendments to the Australian state’s consumer legislation.
The proposed changes to the Fair Trading Act 1987 form part of a “suite of ‘consumers first’ reforms”, which will also include measures to ban ticket bots, currently being prepared by the NSW government.
Matt Kean MP (pictured), the NSW minister for better regulation, says the amendments would make tickets more accessible to ordinary fans – and also eliminate the threat for those with secondary market tickets of being shut out of the venue.
“The reforms also aim to make it clear that tickets resold within the new laws should not be cancelled by event organisers or venues simply because the ticket has been acquired in the secondary market,” he says.
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Ken Lowson: Confessions of a supertout
Ken Lowson, the former ‘supertout’ who, as CEO of notorious ticket-harvesting operation Wiseguy Tickets, built a $25m secondary ticketing empire using one of the first-ever ticket bots, has spoken to IQ about his transformation from scourge of the industry to a campaigner against “corruption” in ticketing – and his belief that the ongoing war on bots is a distraction from a “dirty” business model that prevents fans from knowing how many tickets are put on sale.
In a phone call from the LA office of his new business, Tixfan, Lowson (pictured) – an energetic, sharp-minded obsessive-compulsive who gets by on a couple of hours sleep a night – speaks candidly about his troubled legal and personal history, the rise and fall of Wiseguy and his current efforts to clean up what he calls the “swamp” of the primary ticketing market.
By 2010, Wiseguy had bought and resold around 1.5m tickets and generated profits of more than $25m
The lightbulb moment
Though it eventually became (in)famous for its use of ticket-buying software, Wiseguy in the beginning was actually a rather traditional affair: a room full of ‘pullers’ – all of whom became known to Ticketmaster telesales staff – calling the company on, or just before, every major onsale and sweet-talking sales reps into reserving them a block of tickets. “We became über-good at begging,” jokes Lowson. “They used to tease that they couldn’t buy tickets for us, but then still bang the sequence of keys [to buy tickets] at exactly the moment the event we wanted went on sale. Begging was easy for people without shame…”
The introduction of widespread over-the-phone ticket sales by Ticketmaster – Wiseguy’s main target – was key to the growth of large-scale ticket touting, says Lowson, and transformed ticketing from a local/regional set-up (before, “you’d have brokers buying seats out the back door, [or later] bribing managers of record stores,” he explains) into a truly national phenomenon.
“All of a sudden a guy in California like me would be able to get tickets for row two at Madison Square Garden,” Lowson explains – tickets he could resell for a huge mark-up before the day was over.
However, what really propelled Wiseguy – Lowson’s fourth business, founded in 1999 after a spell selling employers’ liability insurance – into the big leagues was the move into online ticket buying – and, ultimately, the creation of ticket bots.
After trialling using software to automate some of the more tedious aspects of buying from Ticketmaster’s website – ticking checkboxes, filling in forms and the like – Lowson enlisted a 17-year-old Bulgarian developer to develop a program that could automatically respond to Ticketmaster’s captcha (the challenge-response test, usually in the form of ‘fuzzy’ or distorted letters, that aims to determine whether a user is human) to buy tickets faster than any mortal could.
Largely as a result of its use of bots, Wiseguy had by 2010 bought and resold around 1.5m tickets – what Lowson now calls his “franken-bot empire” – and generated profits of more than US$25 million. The business was based in plush new offices in LA’s Century City, where staff rubbed shoulders with bankers and financiers.
But, in the immortal words of the Alan Parsons Project, what goes up must come down – and by this time Wiseguy had attracted the attention of not just Ticketmaster, but the Federal Bureau of Investigation.
“How can bots be responsible for the whole problem if only 20% of tickets are on general sale in the first place?”
The beginning of the end
The eventual demise of Wiseguy was set in motion by one Jason Nissen – a ticket broker who, in a twist of fate, now stands accused of conning investors out of $32m to prop up an elaborate ponzi scheme. “There was this Hannah Montana show,” Lowson recalls. “I’m sitting there with Disney and Ticketmaster, and I remember them talking about how they were only going to sell 5% of the tickets. I said, ‘Are you nuts? This is way too big. You’re going to cause major problems.’
“But Mike Leshinsky, Jason Nissen’s partner, goes ahead and lists 400 tickets he doesn’t have yet to a show in Kansas City. He doesn’t deliver, and the day of the show comes and there are 400 girls outside the venue crying.
“One of them turns out to be the daughter of a senator. They went to Nissen and he told them Wiseguy had promised the tickets. I’d never even met the guy.”
Wiseguy was in 2010 based in the “old AEG offices” in a skyscraper in Century City, Los Angeles, also home to a number of financial services firms. “We were on the 25th floor,” Lowson explains. “All of a sudden I’m getting raided.
“This was after the mortgage crisis in America – talk about a real crime! – and I’m like, ‘You’re here for the bankers, right?'”
The FBI agents made it clear that, no, they weren’t there for the bankers, and Lowson protested his innocence. “I was saying, ‘What did we do? All we do is buy tickets and resell them!’ I wasn’t very nice – I found out later that you don’t do that.”
When the Wiseguy case went to trial, the judge was sympathetic, says Lowson, telling him and business partners Joel Stevenson and Kristofer Kirsch that “‘I’m not putting these guys in jail.’ I’m like, ‘Great, can I leave?’, and they [prosecutors] say, ‘No, you don’t understand: we don’t lose.’”
Lowson ultimately took a plea bargain, pleading guilty to one count of wire fraud. “I had one Russian programmer who asked to be paid in Amazon vouchers,” he explains. “I asked my COO – my dad – and he said, ‘Don’t do it’, so I didn’t. They said there was a conspiracy [as I had the email asking to be paid in gift cards], and I’m like, ‘How am I supposed to be prevent people sending me emails?!’”
“This was after the mortgage crisis in America, and I’m like, ‘You’re here for the bankers, right?”
In a press release issued after Lowson’s guilty plea, the FBI said the three defendants had “acknowledged that ticket vendors were unwilling to sell tickets in large quantities for commercial resale” and so developed a network of “captcha bots” to impersonate individual visitors and allow them to “flood vendors’ computers at the exact moment that event tickets went on sale”.
The pleas, said US attorney Paul Fishman, proved that, “no matter what [Wiseguy] called their activities, they were criminal violations of federal law”.
Lowson, however, remains insistent the company at no times broke any laws, and argued as such in his court hearing in New Jersey. Much legal wrangling centred on whether Wiseguy had employed OCR, or optical character recognition, to circumvent Ticketmaster’s captchas. It hadn’t: Wiseguy’s bot simply downloaded and memorised every possible permutation of the then-static captcha, which were then typed in manually by Wiseguy employees.
As Lowson’s lawyer noted at his hearing, the “captcha was not hacked… It was responded to by a computer.” (“We had to pay a law firm $100,000 to say we never hacked Ticketmaster once,” adds Lowson.)
The black hole of Calcutta
Despite Lowson’s belief that the case against Wiseguy was flimsy and mainly concerned with making an example of the three defendants, he says he has “no hard feelings”, and that the demise of Wiseguy paved the way for him to do the “right thing” by music fans with Tixfan – as well as, finally, get sober.
“I started drinking at 14 or 15 years old,” he explains, “and found out that I was more normal drunk than I was sober. I drank every day and all day – right through to the raid by the Feds [FBI].”
The story of how he eventually got clean involves that old travellers’ cliché – spinning a globe and stopping it with one’s finger – and a faecal epiphany during the resulting trip to India. “I span a globe, found Calcutta and went there,” says Lowson. “It was in Calcutta that I had my last drink.
“I was at the bottom of the barrel after 27 years of drinking. After a four-day bender, I woke up and there was this naked guy taking a shit on the street right in front of me.
“A mental flash is all I remember… It was freaking Obi-Wan [Kenobi] speaking: ‘Ken, now you understand the power of the Force. Stop scalping the fan. You will find peace when you serve the fan. You’re tried and dying. You’re not meant for the dark side.’
“It was the best and most worthwhile moment of my life, and I knew everything had to change.”
When Lowson stopped drinking, he says, he learnt the difference between “good money and bad money”. “A couple of things happen when you’re sober: You get guilt and a conscience,” he continues. “I found it pretty hard to make money now that I had ethics.
“I put my remaining funds in my dad’s control. He said, ‘I’m 70 years old, you’re in your 40s; step up and be a man’. He said he’d take the money, but that the next business I started I had to do it the right way.
“These last few years have been a real learning experience. I’ve had to become resourceful and get used to not just buying my way out of problems.”
“A mental flash is all I remember… It was freaking Obi-Wan speaking: ‘You will find peace when you serve the fan’”
The “moment of disruption”
Tixfan, Lowson’s newest venture, launched at the beginning of 2016, following the dissolution of short-lived start-up Fair2Fan (“it wasn’t going anywhere,” says Lawson). Tixfan’s purpose is simple, he says: to get the maximum possible number of tickets into fans’ hands by introducing total transparency into the buying/selling process.
Lowson says he waited to go public with Tixfan until the introduction of the bill that became the Bots (Better Online Ticket Sales) Act, signed into law by former US president Barack Obama in December. “I was waiting for what I’d call a moment of disruption,” he explains, “and that was it.”
Echoing comments made by FanFair Alliance in the UK after the US bot ban – campaign manager Adam Webb noted a ban was “supported by companies who run secondary ticketing services” – Lowson says the reason the bill was passed so easily is that the secondary ticketers know ticket-buying software is not responsible for most large-scale ticket touting.
“How can bots be responsible for the whole problem if only 15–20% of tickets are on general sale in the first place?” he asks.
“My face was all over the news. I was held up as ‘the reason you can’t get tickets’. But I was a distraction.”
By empowering artists, venues and promoters to create a “level playing field” for ticket buyers by “show[ing] everyone exactly where the tickets are going”, Tixfan also hopes to raise awareness of the inner workings of the industry, which has so far been as resistant to disruption as “big oil, big tobacco [and] government”, says Lawson.
“There are good guys in the industry – the Radioheads, the Pearl Jams, who won’t take the bribe to screw their fans, as well as Bill Silva, [Louis] Messina, ATC and Brian Message; these guys don’t scalp – but it’s all so corrupted,” he continues. “I have to tell people to take the red pill – and don’t forget even Neo took a few days to accept his Matrix reality…”
In spite of his criticism of the Bots Act, Lowson says the passing of the law “let the genie out of the bottle” and further raised awareness of how ticketing operates in the minds of the media and general public.
“This secretive, Boardwalk Empire, 20th-century world can’t survive in the age of WikiLeaks,” he says. “If you want to scalp your own tickets, you’re not going to be able to get away with it. Is it worth the hit to your brand?” (As IQ spoke to Lawson, Live Nation Italy remains under investigation after a TV programme exposed its passing of tickets directly to secondary site Viagogo.)
“If we can clean up the ticket swamp, maybe we can fix the world”
The future
What next, then, for Tixfan – which is so far financed entirely with Lowson’s own cash? Seed funding factors into his future plans, he says, but the first order is a business is finding a major client with whom to demonstrate the capabilities of the platform.
“The first round [of enquiries] was all about exposure; the second is the selection of a proof-of-concept client,” he explains. “Someone’s going to win big, and it’s going to be this client – they’re going to be branded as a superhero. So whoever’s got the biggest balls: step up, please!”
Ultimately, Lowson says, he wants to bring an end to a system in which “artist and fan have no part of the supply and demand” of tickets, and make artists – and himself – more money in the process. “My mission statement is to take $10bn from scalpers, give $9bn to artists and keep $1bn for myself,” he says. (In the same breath, however, Lowson says he is “big believer in altruism” and reveals he is launching a new, Tixfan-backed charity, Big Four – before quickly catching himself, as if temporarily possessed by the Ken Lowson of old, “going too far” with what he calls “the sober humbleness”. “I know people are gonna call me a communist, or a Robin Hood figure, but I’m really a capitalist pig,” he jokes.)
“It’s a corrupt system, and corruption is like a cancer – you’ve just got to cut it out.”
Between Tixfan and Big Four (which aims to combat the world’s ‘big four’ wants: nourishment, shelter, medicine and education), Lowson is upbeat about the future – and the potential for transparent, tout-free ticketing, backed by a charitable foundation, to effect change even beyond live music.
“I’m compelled now by what’s the right thing, what’s correct,” he explains. “If I take a step back I’m going to die.
“We want to create a level playing field for fans. We want to give them the knowledge, to show them exactly where the tickets are going. If we can clean up the ticket swamp… maybe we can fix the world.”
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