The Hidden World of Insider Scalpers

How scalpers collude with industry to screw you without you even noticing

Are you here to see your favorite artist at your favorite venue? They might be colluding with scalpers to screw you out of your money.
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As a frequent concert-goer, I know how much scalping sucks. In another article, I show how scalping damages the entire industry. Scalpers create a poor experience for fans. A poor fan experience reflects badly on artists. Unhappy fans and artists reflect badly on the venue. In some cases, venues or artists use scalping to their own benefit, even at the expense of their fans.

Sometimes venues, promoters, artists, or ticket issuers manipulate the ticket supply, or sell directly on secondary markets. We call this insider scalping.

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Ticket Issuers Collude with Scalpers

Ticket issuers will partner with brokers — *cough* scalpers — who will get access to large amounts of tickets ahead of the general public. Venues will get paid up-front or earn a kickback on secondary sales. In an undercover investigation, CBC learned that Ticketmaster was colluding with scalpers on its re-seller program, TradeDeck. In return for preferential treatment, TradeDeck users would sell their tickets at an inflated price through Ticketmaster’s resale platform, generating further income for the ticketing giant. Ticketmaster denied CBC’s findings, though a class-action lawsuit was filed as a result.

Ticketing issuers sometimes use scarcity marketing to sell higher priced tickets. While not directly scalping, scarcity marketing favors scalpers, at fans’ expense. When consumers feel a sense of urgency and perceive scarcity, they are more likely to purchase an item. For a common example, think of those “going-out-of-business” sales that go on for years.

Viagogo, a major ticket resale marketplace, came under fire for flat-out lying about scarcity and overloading users with a false sense of urgency to get them to purchase overpriced tickets. ticketing platforms essentially offer scalpers a platform where they can list grossly overpriced tickets as if their prices were justified by scarcity. Viagogo has faced dozens of high-profile legal actions as a result of their pro-scalping tactics.

Venues and Promoters Collude with Scalpers

Like ticketing platforms, venues and promoters can issue pre-sales or holds to a target audience. They take advantage of these non-ordinary sales to offer tickets to broker groups, sponsors, radio stations, and VIPs. Sometimes brokers will promise venues a kickback, though these relationships could mean fraud.

Sometimes, venues will open pre-sales for fans, with the expectation to earn revenue on early buy-ins. Unfortunately, scalpers benefit disproportionately from any pre-sale. After all, they have access to the same sales as fans and are simply better at buying tickets.

Smaller players engage in scalping as well. Venue employees and artists’ families often have access to a guest list, where they can reserve spots for themselves and several friends. Those with access to a guest list will often sell spots to earn a quick dollar.

Artists Sell their own Tickets

Artists participate in scalping in much the same way as the broker-scalpers mentioned above. The Wall Street Journal reported that artists like Bon Jovi, Celine Dion, Van Halen, Billy Joel, and Elton John have withheld tickets and sold them directly on the secondary markets. Resales sometimes earn artists ten times face value. Imagine how those fans—paying thousands of dollars to go see their favorite performer—would feel to learn that they are getting ripped off by their idol.

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Many view scalpers as shady operators that take advantage of fans on street corners or behind computer screens. As it turns out, ticketing platforms, venues, promoters, managers, and even artists use their positions to take advantage of fans themselves.

While the situation may feel hopeless, many are working to create better experiences for fans. For example, we here at Foria are striving to help fans discover incredible shows and access low-cost tickets.

If you have any thoughts on the article, or want to learn more about how to fight scalping, you can contact me securely here.