"A public relations nightmare": Ticketmaster recruits pros for a secret scalping program

LATEST UPDATES:

• After the publication of this story, Ticketmaster issued a statement to CBC News saying it was "categorically wrong that Ticketmaster had a program in place to allow resellers to purchase large volumes of tickets." He also indicated that he had already started an internal review of professional reseller accounts and employee practices prior to the release of the CBC News story.

According to a CBC News / Toronto Star survey, box office giant Ticketmaster is recruiting professional scalpers who cheat on its own system to expand its resale business and withdraw more money from fans.

In July, the media sent two undercover journalists to Ticket Summit 2018, a ticketing and live entertainment convention at Caesars Palace in Las Vegas.

Positioned as scalpers and equipped with hidden cameras, the reporters were introduced to Ticketmaster's professional reseller program.

Company representatives told them that Ticketmaster's resale division turns a blind eye to scalpers who use ticket-buying bots and fake identities to get tickets and resell them on the site for inflated prices. These expensive resale tickets include additional fees for Ticketmaster.

"I have brokers who literally have a few hundred accounts," said a sales representative. "It's not something we look at or report on."

CBC shared his findings with Alan Cross, a veteran music journalist and host of the radio show The story continues of the new music, who suspects that the ticket buying public will be far from impressed: "This is going to be a PR nightmare".

He said that there were "rumors about it in the community of ticket sellers, but this has never been described as that before".

"It sounds a little stinky, is not it?"

In combining with scalpers, Ticketmaster faced his position less than ten years ago when Irving Azoff's CEO told US lawmakers: "I think scalping and resale should be illegal. "

Two-storey above Caesars' slot machines and blackjack tables, Ticketmaster was one of the dozens of salespeople and speakers at the conference, which presents itself as a unique networking event for business leaders and business people. small enterprises.

CBC reporter Dave Seglins is listed as "David Geoffrey", a small scalper from Toronto with a fictional company, DGS Promotions.

With the broadcast of hidden cameras, he mingled with some of the most successful scalpers in the world, documenting candid testimonials from players in this notoriously secretive industry.

Casey Klein, director of Ticketmaster Resale, held a session that was closed to the media and called "We value your partnership: more brokers are listed with Ticketmaster than ever before."

The hearing learned that Ticketmaster has developed a professional reseller program and in the past year has launched TradeDesk, a web-based inventory management system for scalpers. The company presents it as "the most powerful ticket selling tool."

TradeDesk allows scalpers to download large amounts of tickets purchased from the Ticketmaster website and quickly index them for resale. In one click, scalpers can hike or discount on tons of tickets on the Ticketmaster website based on their assessment of fan demand.

Neither TradeDesk nor the professional reseller program is mentioned on Ticketmaster's website or in its corporate reports. To access the company TradeDesk website, a person must first send an application for registration.

Do not build a "better mousetrap"

On the show, a handful of Ticketmaster sellers distributed cupcakes, and at two workstations, they provided online TradeDesk demos.

One of the presenters, who was unaware that he was talking to undercover journalists, insisted that Ticketmaster's resale division did not want to know if customers were using automated software and fake identities to bypass the limits of ticket purchase.

"If you want to get a good show and the number of tickets is limited to six or eight, you will not win six or eight tickets," he said.

Watch as CBC News goes undercover to expose Ticketmaster's secret scalping program:

While Ticketmaster has an "unfair buyer" division looking for suspiciously suspicious online activities, the presenter said the resale division is not monitoring TradeDesk users.

"We do not share reports, we do not share names, we do not share account information with the main site." Period, "he said when asked if scalpers use robots to buy their tickets.

CBC heard the same message from a Ticketmaster employee during an online demonstration of the TradeDesk video conference at an earlier stage of the secret investigation in March.

"We've spent millions of dollars on this tool, the last thing we want to do is make sure brokers are not able to sell stocks with us," he told Ticketmaster. – purchase limits – a direct violation of the company conditions of use.

"We are not trying to build a better mousetrap."

Scalping pays

Ticketmaster, owned by Live Nation, the world's largest promoter of concerts, has made it clear to shareholders that it plans to expand further into the resale market.

As part 1 of the CBC News / Toronto Star investigation revealed yesterday, resale tickets are particularly lucrative for Ticketmaster as the company charges a fee twice on the same ticket.

So, for example, if Ticketmaster receives $ 25.75 on a $ 209.50 ticket on the initial sale, when the owner registers it for resale at $ 400 on the site, the company may collect $ 76 extra on the same ticket.

CBC News got a copy of Ticketmaster's Official Reseller Handbook, who describes these fees. It also details the Ticketmaster reward system for scalpers. As scalpers take steps such as annual sales of $ 500,000 or $ 1 million, Ticketmaster will reduce its costs by one point.

the The Ticketmaster employee who gave the videoconference demonstration in March said that 100 scalpers in North America, including a handful in Canada, used TradeDesk to transport a few thousand and several million tickets a year.

"I think our biggest broker probably caught about $ 5 million," he said.

Cross, who has spent the last two years researching online ticket sales, thinks that some fans will read about it and conclude that Ticketmaster is working with scalpers.

"On the one hand, they say," We do not like robots ", but on the other hand," we have all those customers who can use robots "."

Writer Alan Cross answers readers' questions on how to avoid paying exorbitant prices for concert tickets:

Imbalance of supply and demand

Ticketmaster declined several requests from CBC and Toronto Star for an interview. CBC and the Toronto Star have submitted a list of specific questions about the company's scalping program. In a statement to CBC News, the company made no mention of the program, nor commented on its recruitment efforts in Las Vegas.

On Thursday, Ticketmaster made a statement to CBC News.

"It is categorically wrong that Ticketmaster has put in place a program allowing resellers to buy large volumes of tickets at the expense of consumers," the statement said. "The Ticketmaster Vendor Code of Conduct specifically prohibits resellers from purchasing tickets that exceed the posted ticket limit for an event."

However, the CBC report makes no claims on a ticket purchase system, but rather on TradeDesk, an online tool that helps scalpers resell their inventory by instantly synchronizing their Ticketmaster.com accounts on resale sites. . including Ticketmaster.

The company also said Thursday that even before the publication of the CBC's history, it had already begun an internal review of professional reseller accounts and employee practices.

In an earlier statement to the CBC, Ticketmaster said that as long as there is an imbalance between supply and demand for live events, "there will inevitably be a secondary market".

"As the leading ticketing platform in the world, representing thousands of teams, artists and venues, we believe it is our job to provide a safe and fair market for fans who buy, sell and sell. sell tickets on the primary and secondary markets. Says Catherine Martin, Los Angeles-based Senior Vice President of Communications.

But Richard Powers, an associate professor at the Rotman School of Management at the University of Toronto, says that what Ticketmaster does is unethical.

Given his near-monopoly over tickets at the box office, Ticketmaster should also not be allowed to take advantage of the scalping of these tickets, he says.

"Helping to create a secondary market where buyers are fooled into paying higher prices and securing a second commission should be illegal."

For Alan Cross, the program raises a series of ethical questions:

• Is this a legitimate form of commerce?
• Does this violate consumer protection laws?
• Is it transparent and fair to consumers?

"It will probably trigger some questions," he said, "and if not governments, certainly the general public."

With the files of the Robert Star of Toronto and Marco Chown Oved