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I spent some of my formidable years scalping and brokering event (mostly broadway) tickets in various forms. The company I co-founded made a few million and I l

I spent some of my formidable years scalping and brokering event (mostly broadway) tickets in various forms. The company I co-founded made a few million and I learned an expensive lesson in equity at age 18 (I opted instead for the $14/hr salary). We worked in broadway (meaning the style of show, not just the street), and I met the Wiseguys folks at secondary market trade shows, but I had no idea they were this big, and to be honest didn't care. We always got tickets long before they ever went on sale, as does almost anyone who has been in the game a while. We would buy tickets up to 18 months in advance, and we're a security blanket of guaranteed sales for the artists and venues. We thought the retail sales were always a losing bet (except for, ironically, the artists and venues that tried to fight scalpers). When we started figuring out how to circumvent the safeguards (deciding deliberately not to use bots or "spinners" as they used to be called), we realized we didn't need to because most of the venues loved us. Just like the wiseguys, they didn't want to be in the business of scalping and arbitrage, they just wanted to move all of their tickets quickly and efficiently with as little loss as possible. So if we wanted to buy 5,000 of 10,000 seats for a show they were thrilled, and we'd get a discount. When a show was about to go on sale they'd call us. Then thy may turn around and say "sorry tickets are on the secondary market, we don't like scalpers" but usually that was PR-style BS. They wanted someone to absorb that risk. There are certainly artists and venues (e.g. Metallica) that hate scalpers and try to fight them. But we noticed that really only eliminates the "beer money" scalpers and leaves all of the money to the more sophisticated one. I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing, and I find that most venues and artists want to maximize profits and, more importantly, minimize risk anyway.

koolba 10y ago
> I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing, and I find that most venues and artists want to maximize profits anyway. How would a scalper get around ticketing that requires presenting ID that matches the name of the person on the ticket? I've been to a few shows that were like that for pickup up tickets at the will call booth. I suppose you could get them there and hand them off to the true purchaser but that would require boots on the ground at each show. Also, not sure how do deal with ID presented at the door to get into the venue if it has to match the ticket purchaser. (All of this assumes no resales to rename the ticket owner)
- xur17 10y ago
  > How would a scalper get around ticketing that requires presenting ID that matches the name of the person on the ticket? The article mentions a workaround for this: > So-called "paperless" tickets are an antiscalping measure that requires the purchasing credit card to be presented at the venue on the night of the concert. This requirement makes scalpers' lives much harder but is regularly circumvented by the most serious operations. Wiseguy, for instance, told its wholesalers to ask their customers for their credit cards before a sale happened. Wiseguy then used its bot to buy paperless tickets directly on fans' credit cards.
  - austenallred 10y ago
    That's one way. There are a few more. I know people who would have three credit cards, buy 24 tickets, and fly around the country picking them up. One guy I talked to had seen Metallica every time they played in the past 10 years and made a good chunk of cash doing so.
- cb21 10y ago
  The scalper could "sell" their front-row ticket to someone else who buys a cheap nosebleed. Then they get in with the cheap seat and go sit at the better spot. Clumsy but it would work.
  - chrisseaton 10y ago
    > who buys a cheap nosebleed What does this mean? That the person gets punched in the face? Do you just mean mugging people?
    - mikekchar 10y ago
      Nosebleed seat means a seat at the very back of the house. Because it is usually very high up, the idea is that the atmosphere is thin and it makes your nose bleed. Basically what the person is saying is that the fan can buy a very cheap ticket and exchange it for a much more expensive ticket that the scalper bought.
TorKlingberg 10y ago
> I spent some of my formidable years scalping I think you mean formative years. Did you ever get hit buying lots of tickets for a show and then unable to sell them?
- austenallred 10y ago
  Damnit, and now it won't let me edit. Nah, when we bought big sets we knew they would sell. We had a model that could predict it somewhat accurately. Worst case scenario we'd sell for face. In the early days when we had no data things were much more difficult, at a few $200 tickets, but wasn't a huge deal.
- kbenson 10y ago
  > Did you ever get hit buying lots of tickets for a show and then unable to sell them? This happens, but it's not too common. More common by far is selling at under cost. it's a market like any other, and brokers absorb some of the risk for the hope that it pays out. Put it this way, you may not want to spend $60+ per ticket to see an artist you are interested in, but at $50 a ticket? or $30? At some point, you can usually move them, and depending on how many you have, the trick is moving them while not crashing the market at the same time (not to imply huge amounts of tickets, for events not selling well there may not be much on the market to begin with).
deleted 10y ago
[deleted]
SilasX 10y ago
>I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing, and I find that most venues and artists want to maximize profits and, more importantly, minimize risk anyway. What about charging more, so there is less (or zero) spread between what scalpers can charge vs. the official price (or whatever they call it)?
- austenallred 10y ago
  Well, there's that ;) But there are reasons they keep prices low as well. There's a "full house effect" that comes when every seat is full (can you imagine being at a play where half of the seats are empty), as well as just offloading the risk and getting cash in advance. It was hard to find someone with 500k to put into tickets speculatively.
  - SilasX 10y ago
    Right, I just have a hard time believing that filling up the house is just so risky and difficult that they'll take an ~80% loss on revenue (5x scalper markup) just to be sure of it. That model would require a level of risk aversion from the sellers that implies they should just be buying government bonds with their capital rather than running concerts.
    - austenallred 10y ago
      Well most of the time there isn't a 5x markup, either.
- closeparen 10y ago
  How do scalpers beat will call with photo ID?
  - austenallred 10y ago
    That spikes the prices of big shows insanely high. Buy 8, sell 7, meet at venue. I've seen Metallica tickets that were $100 face go for $5,000 each because of this.
gpawl 10y ago
> The company I co-founded made a few million and I learned an expensive lesson in equity at age 18 (I opted instead for the $14/hr salary). Don't feel bad; even if you got equity, your savvier business partner like would have found a way to devalue it. I once got "equity" in the form of 0.0001% of a 6-person non-VC-funded startup.
- austenallred 10y ago
  Nah, I had an option to take 30% in lieu of salary. Was doing $3m/yr in profit. Equity isn't inherently evil.
  - pricechild 10y ago
    Surely you were offered the 30% before the company was making £3m/yr in profit? I think that's the parent's point.
    - austenallred 10y ago
      Yes, isn't that the point of equity? I can do math
Paul-ish 10y ago
>I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing, and I find that most venues and artists want to maximize profits and, more importantly, minimize risk anyway. Say that a tickets market value is $500. What if they charged $500, then gave a $400 rebate after you walk in the door? They would of course limit the number of rebates per person. A more concrete implementation that might work well if people are uncomfortable dealing with money in this way: give away goodies valued at the difference at the door. eg everyone get the album, a T-shirt, 2 free drink tickets, etc...
- kodablah 10y ago
  As the article mentioned, they forward customer credit cards to purchase the tickets, even two levels deep. So the bot can use credit card numbers from the actual fans.
  - Paul-ish 10y ago
    You would definitely have to stop bots.
TwiztidK 10y ago
> I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing, I have seen such a system. A festival near me has a limited number of tickets available each year (due to site and staff restrictions) with surprisingly high demand. Their solution is to do a lottery that gives people an opportunity to buy tickets, requiring the name of each individual ticket recipient at purchase, then they match the names on each ticket to IDs at the gates. The only way to defeat this system is with fake ids.
- austenallred 10y ago
  I can think of a half dozen ways to beat that, at varying levels of legality
  - droopyEyelids 10y ago
    Go on... You're describing something that's incredibly puzzling and leaving everyone's curiosity burning!
- ams6110 10y ago
  Sell by auction. Let buyers bid up to the natural market value. Avoid sniping by running it like a real auction: having no fixed ending time and only finalizing a sale when there have been no bids for a period of time to be sure everyone has a chance to bid up to whatever it's worth to them.
  - cgag 10y ago
    But I want tickets below market value. It's only fair I should have them.
  - austenallred 10y ago
    Ok that actually works, but market value will change drastically over time, and fans would be in an uproar
    - 10y ago
21 10y ago
The London New Year Eve fireworks required a ticket for the best areas, with your name on it and with photo ID check. I think the reason for the photo ID check is for a security background check against that name, so I would assume they would be very serious when checking the ID. Anyway around that?
notliketherest 10y ago
"I have never yet seen a system that cannot be beat by scalpers" easy, ID linked tickets that you pick up after entering the venue and get transacted at that point, and you cannot reenter.
- digler999 10y ago
  You'd then need to have some nontrivial anti-counterfeit technology on the ticket. Otherwise, the name is just a label, and the barcode is a UUID that actually means it's a valid ticket. Someone could make a high quality copy of the ticket, keep the UUID and put new persons name over it. What I would try is a "credit card required at entry", so at the gate the only person who gets is the one who inserts the (valid) CC# that was used to buy the ticket.
  - austenallred 10y ago
    Gift debit cards (some are technically indistinguishable from normal) mapped to fake addresses, escort people in and leave.
monksy 10y ago
> Metallica That didn't work. Tickets for the Chicago show this morning under fanclub presale sold out within seconds. I tried to get them. (Even with a unique code) There are bundles of tickets being resold for nearly 4x their original cost. (Fan presale codes limit to 2 per person) Original prices: 85/155: https://www.stubhub.com/metallica-tickets-metallica-with-avenged-sevenfold-chicago-soldier-field-6-18-2017/event/9823767/?mbox=1&rS=6&abbyo=true&sliderpos=true&qtyq=false&qtyddab=false&sort=price+asc&mapState=zone&qty=1&zid=250783 https://www.stubhub.com/metallica-tickets-metallica-with-ave...
RangerScience 10y ago
Do you have a scalper's view on Burning Man tickets? AFAIK, it's not that no-one scalps them, but that it's a definite minority, due to community standards, slick moves by the Borg, and invalidating tickets that they find out get scalped.
- austenallred 10y ago
  Have never paid attention

koolba 10y ago

> I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing, and I find that most venues and artists want to maximize profits anyway. How would a scalper get around ticketing that requires presenting ID that matches the name of the person on the ticket? I've been to a few shows that were like that for pickup up tickets at the will call booth. I suppose you could get them there and hand them off to the true purchaser but that would require boots on the ground at each show. Also, not sure how do deal with ID presented at the door to get into the venue if it has to match the ticket purchaser. (All of this assumes no resales to rename the ticket owner)

xur17 10y ago
> How would a scalper get around ticketing that requires presenting ID that matches the name of the person on the ticket? The article mentions a workaround for this: > So-called "paperless" tickets are an antiscalping measure that requires the purchasing credit card to be presented at the venue on the night of the concert. This requirement makes scalpers' lives much harder but is regularly circumvented by the most serious operations. Wiseguy, for instance, told its wholesalers to ask their customers for their credit cards before a sale happened. Wiseguy then used its bot to buy paperless tickets directly on fans' credit cards.
- austenallred 10y ago
  That's one way. There are a few more. I know people who would have three credit cards, buy 24 tickets, and fly around the country picking them up. One guy I talked to had seen Metallica every time they played in the past 10 years and made a good chunk of cash doing so.
cb21 10y ago
The scalper could "sell" their front-row ticket to someone else who buys a cheap nosebleed. Then they get in with the cheap seat and go sit at the better spot. Clumsy but it would work.
- chrisseaton 10y ago
  > who buys a cheap nosebleed What does this mean? That the person gets punched in the face? Do you just mean mugging people?
  - mikekchar 10y ago
    Nosebleed seat means a seat at the very back of the house. Because it is usually very high up, the idea is that the atmosphere is thin and it makes your nose bleed. Basically what the person is saying is that the fan can buy a very cheap ticket and exchange it for a much more expensive ticket that the scalper bought.

TorKlingberg 10y ago

> I spent some of my formidable years scalping I think you mean formative years. Did you ever get hit buying lots of tickets for a show and then unable to sell them?

austenallred 10y ago
Damnit, and now it won't let me edit. Nah, when we bought big sets we knew they would sell. We had a model that could predict it somewhat accurately. Worst case scenario we'd sell for face. In the early days when we had no data things were much more difficult, at a few $200 tickets, but wasn't a huge deal.
kbenson 10y ago
> Did you ever get hit buying lots of tickets for a show and then unable to sell them? This happens, but it's not too common. More common by far is selling at under cost. it's a market like any other, and brokers absorb some of the risk for the hope that it pays out. Put it this way, you may not want to spend $60+ per ticket to see an artist you are interested in, but at $50 a ticket? or $30? At some point, you can usually move them, and depending on how many you have, the trick is moving them while not crashing the market at the same time (not to imply huge amounts of tickets, for events not selling well there may not be much on the market to begin with).

deleted 10y ago

[deleted]

SilasX 10y ago

>I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing, and I find that most venues and artists want to maximize profits and, more importantly, minimize risk anyway. What about charging more, so there is less (or zero) spread between what scalpers can charge vs. the official price (or whatever they call it)?

austenallred 10y ago
Well, there's that ;) But there are reasons they keep prices low as well. There's a "full house effect" that comes when every seat is full (can you imagine being at a play where half of the seats are empty), as well as just offloading the risk and getting cash in advance. It was hard to find someone with 500k to put into tickets speculatively.
- SilasX 10y ago
  Right, I just have a hard time believing that filling up the house is just so risky and difficult that they'll take an ~80% loss on revenue (5x scalper markup) just to be sure of it. That model would require a level of risk aversion from the sellers that implies they should just be buying government bonds with their capital rather than running concerts.
  - austenallred 10y ago
    Well most of the time there isn't a 5x markup, either.
closeparen 10y ago
How do scalpers beat will call with photo ID?
- austenallred 10y ago
  That spikes the prices of big shows insanely high. Buy 8, sell 7, meet at venue. I've seen Metallica tickets that were $100 face go for $5,000 each because of this.

gpawl 10y ago

> The company I co-founded made a few million and I learned an expensive lesson in equity at age 18 (I opted instead for the $14/hr salary). Don't feel bad; even if you got equity, your savvier business partner like would have found a way to devalue it. I once got "equity" in the form of 0.0001% of a 6-person non-VC-funded startup.

austenallred 10y ago
Nah, I had an option to take 30% in lieu of salary. Was doing $3m/yr in profit. Equity isn't inherently evil.
- pricechild 10y ago
  Surely you were offered the 30% before the company was making £3m/yr in profit? I think that's the parent's point.
  - austenallred 10y ago
    Yes, isn't that the point of equity? I can do math

Paul-ish 10y ago

>I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing, and I find that most venues and artists want to maximize profits and, more importantly, minimize risk anyway. Say that a tickets market value is $500. What if they charged $500, then gave a $400 rebate after you walk in the door? They would of course limit the number of rebates per person. A more concrete implementation that might work well if people are uncomfortable dealing with money in this way: give away goodies valued at the difference at the door. eg everyone get the album, a T-shirt, 2 free drink tickets, etc...

kodablah 10y ago
As the article mentioned, they forward customer credit cards to purchase the tickets, even two levels deep. So the bot can use credit card numbers from the actual fans.
- Paul-ish 10y ago
  You would definitely have to stop bots.

TwiztidK 10y ago

> I have never yet seen a system that cannot be beat by scalpers, including paperless ticketing, I have seen such a system. A festival near me has a limited number of tickets available each year (due to site and staff restrictions) with surprisingly high demand. Their solution is to do a lottery that gives people an opportunity to buy tickets, requiring the name of each individual ticket recipient at purchase, then they match the names on each ticket to IDs at the gates. The only way to defeat this system is with fake ids.

austenallred 10y ago
I can think of a half dozen ways to beat that, at varying levels of legality
- droopyEyelids 10y ago
  Go on... You're describing something that's incredibly puzzling and leaving everyone's curiosity burning!
ams6110 10y ago
Sell by auction. Let buyers bid up to the natural market value. Avoid sniping by running it like a real auction: having no fixed ending time and only finalizing a sale when there have been no bids for a period of time to be sure everyone has a chance to bid up to whatever it's worth to them.
- cgag 10y ago
  But I want tickets below market value. It's only fair I should have them.
- austenallred 10y ago
  Ok that actually works, but market value will change drastically over time, and fans would be in an uproar
  - 10y ago

21 10y ago

The London New Year Eve fireworks required a ticket for the best areas, with your name on it and with photo ID check. I think the reason for the photo ID check is for a security background check against that name, so I would assume they would be very serious when checking the ID. Anyway around that?

notliketherest 10y ago

"I have never yet seen a system that cannot be beat by scalpers" easy, ID linked tickets that you pick up after entering the venue and get transacted at that point, and you cannot reenter.

digler999 10y ago
You'd then need to have some nontrivial anti-counterfeit technology on the ticket. Otherwise, the name is just a label, and the barcode is a UUID that actually means it's a valid ticket. Someone could make a high quality copy of the ticket, keep the UUID and put new persons name over it. What I would try is a "credit card required at entry", so at the gate the only person who gets is the one who inserts the (valid) CC# that was used to buy the ticket.
- austenallred 10y ago
  Gift debit cards (some are technically indistinguishable from normal) mapped to fake addresses, escort people in and leave.

monksy 10y ago

> Metallica That didn't work. Tickets for the Chicago show this morning under fanclub presale sold out within seconds. I tried to get them. (Even with a unique code) There are bundles of tickets being resold for nearly 4x their original cost. (Fan presale codes limit to 2 per person) Original prices: 85/155: https://www.stubhub.com/metallica-tickets-metallica-with-avenged-sevenfold-chicago-soldier-field-6-18-2017/event/9823767/?mbox=1&rS=6&abbyo=true&sliderpos=true&qtyq=false&qtyddab=false&sort=price+asc&mapState=zone&qty=1&zid=250783 https://www.stubhub.com/metallica-tickets-metallica-with-ave...

RangerScience 10y ago

Do you have a scalper's view on Burning Man tickets? AFAIK, it's not that no-one scalps them, but that it's a definite minority, due to community standards, slick moves by the Borg, and invalidating tickets that they find out get scalped.

austenallred 10y ago
Have never paid attention