BUSINESS

Ticketmaster’s Secret Scalping Program: TradeDesk

Canadian journalists have unraveled Ticketmaster's cunning secondary market scheme.

A team of Canadian journalists from the CBC reported on Wednesday that Ticketmaster has developed a secret tool called TradeDesk. The tool assists professional scalpers with re-selling tickets in ways that seem to violate Ticketmaster’s own rules.

Previously, over the past decade, Live Nation has markedly changed course in its position on ticket resales. In 2009, Live Nation’s then-CEO, Irving Azoff, told the Senate Judiciary antitrust subcommittee that he believed scalping should be illegal.

The Undercover Investigation

Two CBC journalists went undercover with hidden cameras and posed as professional resellers attending the Ticket Summit 2018. The Ticket Summit is a trade convention that was held in July at Caesars Palace in Las Vegas. A CBC journalist also obtained access to an online video conference demonstration of the TradeDesk platform back in March.

TradeDesk Ticketmaster

In footage obtained by the journalists, a man purported to be a TradeDesk sales representative told them that the resellers he works with have “literally a couple of hundred” Ticketmaster.com accounts apiece. This clearly is a violation of Ticketmaster’s own terms of use. However, they can buy huge swaths of tickets for resale. Furthermore, Ticketmaster’s “buyer abuse” division does not investigate at least some TradeDesk users.

Additionally, a Ticketmaster employee claimed that several resellers across North America were already using TradeDesk to sell large amounts of tickets per year.  The employee also estimated that their largest broker most likely obtained around five million tickets.

The CBC made public a document which says it is Ticketmaster’s handbook for resellers. The handbook outlines a reward system for resellers. For example, the CBC writes, “As scalpers hit milestones such as $500,000 or $1 million in annual sales, Ticketmaster will knock a percentage point off its fees.”

Profitability

The journalists asserted that resold tickets are “particularly lucrative” for Ticketmaster. This is because the company profits from two separate sets of charges collected from the same ticket.  For example, if Ticketmaster collects $25.75 on a $209.50 ticket on the initial sale, when the owner posts it for resale for $400 on the site, the company stands to collect an additional $76 on the same ticket.

Ticketmaster

The Canadian report compounds some pressure on both Live Nation and Ticketmaster. According to reporting earlier this year from The New York Times, the Justice Department is in the process of reviewing complaints that the concert giant “has used its control over concert tours to pressure venues into contracting with its subsidiary, Ticketmaster.”

Ticketmaster responds

In the wake of allegations, Ticketmaster president Jared Smith has stated that the company is planning to take a closer look at its own secondary-market policies.

He states the following:

We absolutely do not turn a blind eye to the misuse of our products.

Smith denies that Ticketmaster is complicit in the scalping of its own tickets. He further denied that the company is motivated to move primary inventory to the secondary market because Ticketmaster gets paid twice for each ticket. However, he conceded that the company is not aggressively monitoring TradeDesk for violations of its terms and conditions. Specifically, he states that Ticketmaster can be more aggressive in enforcing their own rules and blocking people who attempt to buy a lot of tickets.

In response to the accuracy of the story, Jared Smith stated the following:

The story is predicated on misinformation and a misunderstanding that paints the company very differently than it actually is.

According to Jared, TradeDesk is an inventory management tool that allows professional sellers to pull all of the inventory that they have, which is mostly gathered in legitimate ways. He further explains that there are similar tools out on the marketplace. He sites StubHub’s Ticket Utils and VividSeats’ SkyBox as examples. The main difference with TradeDesk is that Ticketmaster verifies that the tickets are real and valid.

More Information

  • Original CBC article on the investigation.

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David G.
the authorDavid G.