The current system for allocating tickets to popular events leaves a lot to be desired. Most tickets for the most popular shows are pre-allocated to fan clubs, VIP clubs, credit-card deals and to managers and artists, who then resell those tickets.
Other ticket resellers operating within that system have in recent years deployed “bots” – software designed to buy up tickets to “scalp,” or resell them on secondary ticket websites. The volume of tickets captured by bots is less than 1 percent of all tickets sold per year.
The BOTS Act—recently passed by Congress and on its way to President Barack Obama’s desk—criminalizes the circumvention of technical measures used by online ticket sellers to stop bots. Those who support the bill say it will level the playing field for people to buy tickets. But will it? I recently participated in a podcast discussion with Evan Swarztrauber of TechFreedom on this topic.
Resold tickets better represent the market value that fans are willing to pay to attend various events. The secondary market makes tickets available to those who desire them the most, rather than those lucky enough to click the “purchase” button at the right time. Scalpers also take on the risk of stale inventory from venues. If the tickets don’t sell, scalpers have to move their tickets at below face value, thus clearing the market and ensuring that the venue fills.
The BOTS Act is unnecessary and introduces unintended consequences. There’s already state legislation and private litigation to punish bots. Such legislation stalls innovation in technologies that look to better match ticket buyers and sellers, such as better user interfaces or ways of incorporating dynamic pricing algorithms for the hottest tickets.
So why is Live Nation pushing the bill? Probably because the BOTS Act will shift enforcement costs from the ticket-selling industry to the Federal Trade Commission. The precedent is a dangerous one: to have the federal government enforce private companies’ terms of service.
Focusing ire on bots detracts from other ways to make tickets more accessible. Artists can follow Garth Brook’s lead and add concerts to cities based on demand. Venues can invest in virtual reality technologies so fans can experience concerts live without needing to purchase a seat. The BOTS Act would solidify the way tickets are currently sold, which harms fans.
Image by Dim Dimich