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”
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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