What's missing from the public debate about bots and ticket scalping, however, is a nuanced understanding of how the primary and secondary ticket markets work, and how ticket brokers have a fundamental advantage at buying tickets than the average fan, bots or not. For many brokers, buying tickets is their livelihood, and they're far more obsessive and more motivated to get to tickets first. After all, how much time have you spent studying the underlying architecture and quirks of the Ticketmaster site, researching presale passwords, signing up for fan clubs, or enrolling in presale-specific credit cards?
"Bots are one piece of the puzzle, but a lot of the industry operates in nakedly improper ways"
Most importantly, he's just generally good at talking; I would regularly call up Lowson to clarify a small point for the article and 40 minutes later he'd still be explaining Ticketmaster's CAPTCHA system or the reasons why presales are built for scalpers, not fans. This gift for talking came in handy before Wiseguy was using bots, back in the early days when it bought tickets on the phone.Founded in 1999, Wiseguy employed about a dozen ticket "pullers" to work Ticketmaster's phone lines, memorizing the quickest ways through automated phone trees and sweet talking the company's representatives into reserving tickets for them the second they went on sale. It worked like this: Lowson and his pullers, who worked in Wiseguy's cubicle farm in Las Vegas, would call Ticketmaster customer service a few minutes before a hot show went on sale (most sales happen at 10 AM local time).
"I'd do three or four calls at once and time it out and I'd flirt with the reps"
A Wiseguy puller would push through the phone tree and ask a sales representative for assistance on something completely unrelated—maybe ask questions about when tickets from a previous order would be shipped. Because they called under the guise of getting help rather than buying tickets, customer service didn't kick them off the line for calling in too early, which was Ticketmaster protocol at the time. Then, just before 10 AM, the puller would say something to the effect of "Oh, by-the-way, would you mind reserving tickets for the Springsteen show when it goes on sale in 30 seconds?""I'd do three or four calls at once and time it out and I'd flirt with the reps. I'd say, 'I know the buttons you need to push to grab the tickets—F2, 10, return. Sometimes I'd get them to chant it. 'F2, 10, return, F2, 10, return,'" Lowson said. "Then I'd get center row two at Madison Square Garden for Springsteen. I'd buy a ticket for $80 and sell it for $700. The tickets were sold the same day, the profits were earned the same day. The money came right away."Ticketmaster was already selling tickets online at this point, but Wiseguy didn't have success buying online at first even though it had invested in low-latency T1 internet connections for its pullers. The problem, Lowson realized, was that his people were slow. He began to look for a way to automate the process, and managed to find a 17-year-old Bulgarian on a programming forum who was up to the task.
"You think I give a fuck if scalpers lose $10 billion to make a billion for myself? The fans save $9 billion, right?"
"He kept saying 'I can do more,' but I kept holding him back because I was paranoid he'd start his own company," Lowson said. "Finally I took the training wheels off and told him to do it."The last piece of the puzzle was Ticketmaster's anti-bot CAPTCHA system, which requires a human to type in crossed out or fuzzy words to prove he or she isn't a robot. Wiseguy learned that Ticketmaster's CAPTCHA system had only loaded 30,000 unique images into its database, rather than millions. So Lowson's team downloaded every image they could find as a .jpeg file, stayed up all night typing them out, and taught their bot how to match the images."Ticketmaster left it that way for years," Lowson said. "Once we realized the CAPTCHA database was static, we went to look at the seats we could pull, and bam!—I saw the best seats available for Springsteen. That's when we really knew we had something."
"CAPTCHA was not hacked. It was responded to. It was responded to by a computer."
"What was done here was simple, almost like the kids memory game of match. The computer program matches in a .jpeg database that was created by a number of individuals here," Lowson's lawyer argued at his hearing. "CAPTCHA was not hacked. It was responded to. It was responded to by a computer … the computer acted as an individual and answered the CAPTCHA response correctly, which allowed them—the computer, to then go to the buy page to order tickets."
Wiseguy leased dozens of servers and thousands of IP addresses all over the country
The company realized connection bandwidth and latency were the most important factors in getting tickets quickly. Wiseguy leased dozens of servers and thousands of IP addresses all over the country after realizing that some connections were able to get into a sale slightly earlier than others. At the height of its operation, the company was spending between $500 and $800 per month on each server.
"We eventually stopped letting our clients tell us how much to buy. We told them what tickets they had to buy from us and told them how much they were going to pay us"
The NY Attorney General's report determined that "the majority of tickets for the most popular concerts are not reserved for the general public." Instead, some are sold in presales, which—bots or not—favor brokers because they have access to databases of passwords and access to all credit card-specific presales. Others are put on "hold" for promoters, advertisers, radio stations, venues, VIP packages, and corporate sponsors, or sold directly to scalpers by venues themselves.When tickets go on "public sale," an average of only 46 percent of tickets go on sale to the public, according to the report. For more popular events, the percentage available in public sales can be much lower. It's rare for the public to see ticket charts that venues and promoters are privy to, but in 2009, a seating chart for Taylor Swift's concert at Nashville's Bridgestone Arena became public: 11,720 of the 13,330 seats in the venue were accounted for before the "public sale."
Ticketmaster has a "ticket limit" for almost every show it puts on sale, which is ostensibly designed to stop scalpers from buying a ton of tickets. Careful scalpers easily circumvent this by using multiple credit cards with multiple addresses. Most don't even worry about it, because Ticketmaster usually doesn't cancel tickets that have already been sold. Lowson told me he always ignored ticket limits and only had tickets cancelled by the Allman Brothers. Ticketmaster disputes this claim and says it regularly and strictly cancels tickets.The NY Attorney General noted that historically, tickets have only been canceled if artists request a special audit after tickets go on sale. "A sophisticated representative of several top artists playing the largest arenas told NYAG they had been unaware that Ticketmaster required a separate auditing request to enforce limits the artist had already requested, and had therefore never made such a request."
An invite-only website called ShowsOnSale provides its members with an exhaustive list of every presale (and presale password) and public sale in the world, which is pulled from signing up for thousands of venue and artist mailing lists and signing up for specific credit cards.This means that scalpers can and do buy in every presale that's supposedly meant for fans, and the average scalper probably knows about more presale opportunities than a casual fan does.
If there's a reliably profitable secondary market for tickets, that means tickets are being priced too inexpensively by the artist. Pricing tickets too low is an understandable decision for an artist to make, because obviously no one wants to play to an empty venue and no artist wants to be seen as greedily extracting as much money as possible from fans. When face value ticket prices increase, scalpers generally respond by sitting sales out, meaning less competition for fans during public onsales.
Big time brokers look down on so-called "beer money brokers" and "soccer moms" who casually scalp tickets to major events that are nearly certain to be profitable. When I was scalping tickets, for instance, any ticket to a Taylor Swift concert anywhere in the country was bound to let me double my money, and so I, a college kid living in Maryland, would wake up on a Saturday morning and buy tickets in New York, Philadelphia, New York, and Boston before I left my bed. Then I'd take a shower, buy tickets in Chicago, Houston, Dallas, and Kansas City. Eat breakfast, buy tickets in Denver, Los Angeles, and Seattle. By lunch, I may have already had 40 tickets."The biggest issue why fans can't get tickets is not bots or even because there are professional scalpers involved," Dean Budnick, coauthor of Ticket Masters: The Rise of the Concert Industry and How the Public Got Scalped, told me. "There are just so many amateurs who can buy from anywhere in the world and flip them on StubHub a few minutes later."
Stubhub, which dominates the secondary ticketing market, has started making deals with artists such as Jennifer Lopez to sell some premium seats directly on its platform. This "blended marketplace," as StubHub calls it, means that the primary and secondary market will exist side by side. There are upshots to this: If a fan is able to see all tickets that are on sale for any event at any time, they can make a more informed decision about what to buy.StubHub's Holtzman told me that such schemes allow artists more control over the price of their tickets. "I don't know of a lot of artists that sell directly on us, but I think they should," he said. The flip side of this is that fans will have a harder time determining what is a "face value" ticket is or where and when it actually goes on sale.
The NY Attorney General's office makes clear that bots are still exerting pressure on the primary ticket market. A spokesperson at the agency told me that the office believes many brokers use ineffective, off-the-shelf software that can be bought for a few thousand dollars, but big time brokers program their own bespoke bot solutions, as Wiseguy did."The sophisticated and successful ones are constantly revising their bot software, waiting for Ticketmaster to make changes and changing with them," the spokesperson said.When Congress passed the law banning bots, many of my friends cheered, thinking that it would suddenly be easier to get tickets. That hasn't been the case. A Dallas Observer article from last month notes that the "bill designed to prevent bots from buying up concert tickets didn't help U2 fans," who once again found it difficult to get tickets to the band's new tour. This is in part because of the reasons I've listed, but it's also because there's nothing stopping a bot-using broker from moving their operation overseas, where US laws are harder to enforce.Ticketmaster agrees that anti-bot legislation isn't likely to greatly change bot activity. The company said it blocked 5 billion bot attempts in 2015, and that bot activity increased 10 percent between 2015 and 2016."Legislative efforts are effective in raising awareness, but there must be stronger criminal penalties and civil fines to disincentive those who profit from bots," Mulkey said. "The battle against bots is constantly changing."
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.Because paperless tickets weed out casual scalpers, operations that are able to bypass the requirement are usually able to make more profits because there is less competition on the secondary market.The concert industry relies on scalpers to buy tickets
After the anti-bot law was passed, brokers on the ShowsOnSale forum cheered. Brokers who don't use bots hate the "BotBoys" who do, and brokers who hire human ticket pullers or pull tickets themselves hate that scalpers are automatically assumed by the public to be using bots.
"At a top level, we see bots still as a real and serious issue," a Ticketmaster spokesperson told me. "We are successful at fighting them every day, but it's an arms race."Ticketmaster's site is much different today than it was when Lowson was buying tickets, and the company says that the level of sophistication it's fighting has increased dramatically."Over the last decade, and especially the last few years, we've made significant investments in both our technology and our team to be the best at aggressively blocking bots and all bad actors," Mulkey said. "Scalpers and bots impact the playing field. Even though ticket scalping has always existed it has evolved over the years with the advancement of technology, and that makes fighting bots even harder."Ticketmaster sees the frustration of ticket buying as a fundamental problem with both supply and demand and a pricing gap: "There are more people who want to go to a show than there are tickets available," a company spokesperson said. "For example the 2015 Adele onsale, there were about 10 million people lining up to get tickets and we only had a little over 400,000 tickets. There's a big difference there and we're sensitive to the emotions behind these on sales for passionate fans."
"We didn't think we were doing anything illegal. We never did anything illegal, ever"
"What Ken did was extraordinary, the scale of it," Budnick, coauthor of Ticket Masters said. "They mystified people in that they were so bold about it. They lived large, like the way people imagined criminal gangsters on TV and films. When it came time for trial, there were a lot of people who supported and said what they were doing was legal. I think the clean way out for everyone was just to have the plea and put the whole thing to bed."The intervening years haven't been great for Lowson. Soon after his arrest, his brother was killed by a drunk driver. Lowson got divorced and fought drug addiction and alcoholism for the early part of the decade. He rarely speaks to most of the people who helped him build Wiseguy; he says the federal investigation spooked most of the crew. A year spent in India mellowed him out and sobered him up. For the last year, he's been planning his comeback.He doesn't apologize for running Wiseguy, and he doesn't think that ticket scalping is inherently immoral. In fact, he got into it because the secondary ticket market is one of the freest markets in American capitalism."Before this, I was selling workman's comp insurance, which felt like such a dishonest industry," Lowson said. "With tickets, you might not like the number you pay, but you're getting the exact seat, the exact section—you're getting exactly what you bought from me, and there's no grayness. I felt like it was really straight up."Lowson says he's uniquely placed to fix the ticket buying experience. Many of the revelations about the ticket industry I've highlighted were discovered in part because Wiseguy's ticket bot was so much better than its competitors that he got a better picture of what was actually going on sale to the public than any other person outside of the primary ticketing industry.The bot taught him that the tickets the public thought were going on sale often weren't. Often, the best tickets weren't put on sale at all, or only certain sections went on sale, with the rest held back for corporate sponsors, radio stations, VIP packages, or other "holds." Presales meant for fans disproportionately benefit scalpers.Because ticket scalpers can buy tickets for any show and are better at buying tickets than fans, the main problem is not banning bots; it's making sure that the opportunity to buy face-value tickets are targeted directly to fans and not at scalpers. Lowson says bands, sports teams, and Ticketmaster can't continue to decry scalping while continuing to cut backroom deals that only help scalpers."The game is rigged, and this secrecy can't survive in a WikiLeaks world," he said. His new venture, TIXFAN, is a consultancy firm that will work directly with teams and artists to plug the holes he exploited. Published ticket limits will be enforced. Presales will be microtargeted at specific groups in hopes of keeping scalpers out, and tickets won't be sold to known scalpers."I have hundreds of ideas," Lowson said. "And now that bots have been made illegal, I've become a hot commodity. It sounds good, right? 'We hired the ticket bot king to work for us to make sure the other ticket bots aren't taking tickets from the fans.'"Lowson says once his case was made public, dozens of copycat brokers started making and commissioning their own bots. He says he's ready to fight for the fans by airing out the industry's dirty laundry to the artists and teams who want to make sure their fans get tickets—and build a company that has even more influence than Wiseguy did."You think I give a fuck if scalpers lose $10 billion to make a billion for myself?" Lowson said. "If I do that, the fans save $9 billion, right?"If you are a ticket broker or work in the live events industry and have anything to share about how it works, you can contact me securely here.
"With tickets, you might not like the number you pay, but you're getting the exact seat, the exact section—you're getting exactly what you bought from me"