Ticketmaster is using its software — and your data — to take on ticket-buying bots

Courtesy of ReCode:

It’s an $8 billion problem for the live events business.

Ticketmaster is fighting back against ticket-buying bots, using a combination of technology and its customers’ personal data to take on an $8 billion problem.

Live Nation’s ticketing giant is rolling out a “Verified Fan” program that’s supposed to cut down on automated ticket scalping by profiling ticket buyers and determining if they’re humans or machines.

In many cases, bot-enabled scalping is already illegal — last year, for instance, Barack Obama signed a law specifically targeting ticket-buying technology. But laws alone won’t beat bots.

Ticketmaster has been testing the program with smaller tours over the past few months, but now it is giving it a push by using it with an Ed Sheeran tour that went on sale this week.

 So far, so good, says David Marcus, Ticketmaster’s head of music in North America. He says less than 1 percent of tickets sold through the Verified Fan program so far have ended up in secondary ticket markets. Normally that number is a double-digit percentage, he says.

Right now, Ticketmaster uses Verified Fan for concert “pre-sales,” a ticket-buying window that is supposed to be limited to fans but is usually swamped by ticket-buying bots.

Ticketmaster’s software asks fans to provide personal information including their phone number, email and social info, like their Facebook account. Then Ticketmaster takes time to figure out if they’re human, looking for clues like past ticket-buying history and social posts, and lets ticket-buyers know if they’ve made the cut.

 “Bots are about speed, and if you make distribution about speed, you’re fighting a very hard battle,” Marcus said. “If you make it about identity, it’s much different.”

If Verified Fan works at scale, Ticketmaster could move it beyond pre-sales, which represent a minority of tickets for each event, and use the ticketing method for entire shows, Marcus says.

And in theory that could generate significant revenue for Ticketmaster and the acts it works with, since they could cut out middlemen and sell tickets directly to the customers.

But for the flip side of that argument, ask Marcus’s boss: Live Nation CEO Michael Rapino.

When I talked to Rapino for the Recode Media podcast last year, he was skeptical that tech could ever defeat scalpers, because scalpers were able to generate some $8 billion in secondary sales each year. “That’s like cocaine money. That’s going to attract a lot of good people” to take on whatever measures Ticketmaster and other vendors use, he said.

The real answer, he says, would be for artists, sports leagues and other people who sell live event tickets to raise their ticket prices at the start, so there wouldn’t be any economic incentive to resell the tickets. “We can have the best technology, we can try to stop it, we can try to isolate it. But you can’t ever fix this when you leave that much money off the table.”