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Paradise Papers Expose Canadian Scalper's Multimillion-Dollar StubHub Scheme (www.cbc.ca)
An anonymous reader quotes a report from CBC.ca: When Adele fans went online to buy tickets to the pop superstar's world tour last year, they had no idea what exactly they were up against. An army of tech-savvy resellers that included a little-known Canadian superscalper named Julien Lavallee managed to vacuum up thousands of tickets in a matter of minutes in one of the quickest tour sellouts in history. The many fans who were shut out would have to pay scalpers like Lavallee a steep premium if they still wanted to see their favorite singer. An investigation by CBC/Radio-Canada and the Toronto Star, based in part on documents found in the Paradise Papers, rips the lid off Lavallee's multimillion-dollar operation based out of Quebec and reveals how ticket website StubHub not only enables but rewards industrial-scale scalpers who gouge fans around the world.
Lavallee's name appears over and over in the records, alongside the names of his wife, his father and other friends and family. The records show them somehow buying tickets from different locations around the world at the same time, placing orders from cities like Chicago, Los Angeles, London and Montreal. Lavallee, who got his start in his early 20s reselling hockey and concert tickets while living at home with his parents, now runs an international ticket harvesting operation. Financial records detail $7.9 million in gross sales in 2014 alone. [T]he CBC/Star investigation also discovered a password-protected portal exclusively for StubHub's top sellers who prove they can move more than $50,000 worth of tickets a year. The company offers them special software to upload and manage huge inventories of tickets. StubHub said in a statement: "StubHub agrees that the use of bots to procure tickets is unfair and anti-consumer. StubHub has always supported anti-bots legislation and encourages policy-makers to look comprehensively at the host of factors that impact a fan's ability to fairly access, buy, resell, or even give away tickets in a competitive ticket market."
Lavallee's name appears over and over in the records, alongside the names of his wife, his father and other friends and family. The records show them somehow buying tickets from different locations around the world at the same time, placing orders from cities like Chicago, Los Angeles, London and Montreal. Lavallee, who got his start in his early 20s reselling hockey and concert tickets while living at home with his parents, now runs an international ticket harvesting operation. Financial records detail $7.9 million in gross sales in 2014 alone. [T]he CBC/Star investigation also discovered a password-protected portal exclusively for StubHub's top sellers who prove they can move more than $50,000 worth of tickets a year. The company offers them special software to upload and manage huge inventories of tickets. StubHub said in a statement: "StubHub agrees that the use of bots to procure tickets is unfair and anti-consumer. StubHub has always supported anti-bots legislation and encourages policy-makers to look comprehensively at the host of factors that impact a fan's ability to fairly access, buy, resell, or even give away tickets in a competitive ticket market."
events should have a ticket lottery system so that it's more fair and for some say one a year events (more so across many time zones) and it can stop the untenanted multi buys say I want to go this event but I don't know If I can be online at the time / day it's due to open so you ask some to try to get them for you but you end getting in at the right time.
Also fixes the buy rush endless reloading game.
It would be so easy to shut out scalpers by selling tickets through dutch auctions. If you grab them all early, you pay a big markup.
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This wouldn't even be an issue if the concert promoters sold tickets at actual market value.
Just don't buy from scalpers. If they sit there with tickets for a million to a huge event that sees few actual visitors then it will highlight the problem even more.
It doesn't matter how much you want to go to a concert if you feed the scalping mafia at the same time.
Some events demands that you also provide the card used to pay for the ticket to make it valid in an effort to pull out the rug under the feets of the scalpers.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
It's good to see at least one business in Quebec made a profit. And almost nobody here watches the CBC. It's just too damn boring. Even for us.
Why not just sell the tickets at the market clearing price?
If you aren't sure what is the "correct" price, then just set it high, and drop the price a few percent each day until they all sell.
Then the profit goes to the artist and venue rather than the scalpers.
Scalpers are a result of a dysfunctional market. There are no scalpers selling milk outside the grocery store.
Absolutely. Scalpers...er...resellers are just an inevitable result of setting ticket prices too low.
I was just talking with a friend about the IPO frenzy in the lat '90s. Everyone cheered when a company would offer an IPO and the stock price would double or triple on opening day. I always wondered why people were so excited that the company left 50% of the cash on the table.
Require the ticket user's name be printed on the ticket, and confirm your ID matches before you're allowed in.
That the ticket sales sites don't implement such a simple solution suggests they actually like scalpers. The scalpers help guarantee an event sells out even if not all the seats are filled. i.e. The risk of a non-sellout is shifted from the ticket sales site to the scalpers, with the scalpers losing money if the event doesn't sell out, but pocketing the cash if the event does sell out. The ticket sales sites benefit from less variability in ticket sales, and thus more predictability in their income.
Simple solution: make tickets sold on-line non-transferable and marked with the name of the person they're for. When you buy tickets through a retail channel they have to collect a name for each ticket, which shouldn't be a problem for someone buying for a group of friends. At the door the ticket gets checked against identification and if the name doesn't match the ticket's no good.
If the primary outlet wants to allow resellers to buy for other people, they'd have to implement a reservation system where they can reserve (but not purchase yet) the number of tickets they expect to sell that day. They collect the credit-card information and names from the buyer, submit an order to the vendor against their reservation and send the tickets to the buyer when the purchase is confirmed. The reseller's profit would be the difference between the retail price of the tickets and what the reseller was charging buyers for them. Their daily reservation would be limited and the limit adjusted based on the average number of orders they submitted a day, with the reservation expiring at the end of the day. The primary vendor could also impose limits such as no more than 50% of the event's tickets being available to resellers.
Doesn't directly regulate the pricing, but now no one reseller can "lock up" the entire inventory for an event and control the price that way. If a reseller prices tickets too high, buyers will go somewhere else. And if someone gets the bright idea of setting up a network of reseller entities, they run into the problem of keeping the sales for each entity high enough to earn a big enough reservation block while simultaneously spreading the sales out enough to keep from having reservation blocks reduced for lack of sales on some entities.
Why not just sell the tickets at the market clearing price?
I know you won't believe this, but artists aren't all rich assholes who only want other rich assholes to see their performances.
Right of first sale here.
"Right of first sale" is not a universal principle, for instance you cannot resell a plane ticket, or a fishing license. In some jurisdictions, scalping is illegal.
Why not just sell the tickets at the market clearing price?
I know you won't believe this, but artists aren't all rich assholes who only want other rich assholes to see their performances.
They can donate as many tickets as they like. A simple free auction would handle this real quick if it was the real reason they are keeping prices artificially low. You must think these artists are monumentally stupid if they think low ticket prices help out consumers and not just scalpers.
The only reason scalpers can make money is the ticket brokers like the service they provide (mitigating risk, media buzz from immediately selling out, etc) There are numerous ways the ticket brokers could cut out all the scalpers if they wanted. Raising prices, auction, non-transferable tickets, and many others. The ticket brokers like scalpers, and this is the only reason they exist.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
I remember reading about a band more than decade ago who was concerned about this so they limited ticket sales to in-person sales with limit of how many each person can purchase. Now it still didn't stop the scalpers from paying someone from standing on the line to buy the tickets for them but many real fans got to purchase the tickets at a list price.
You must think these artists are monumentally stupid...
Well, not exactly the way I'd put it but... they act on principle a lot but aren't usually really detail oriented and tend not to want to spend a lot of time thinking about the numbers and logistics of it all so they prefer to leave that work up to others and therefore their agenda often gets railroaded by "smarter people." You don't have to dig hard to find numerous complaints from various performers that their fans can't afford their tickets because [the venue] has some exclusive deal with, say TicketMaster who is [doing evil] in their name.
I've no idea why shows sell tickets below the market price. Money aside, it is PITA for a top paying customer when I have to go to a reseller rather than buy the ticket directly.
Smart show company: Cirque de Soleil in Canada. In my limited experience tickets are always available for tomorow's show, in all or most price zones, at a price of course. I've just checked tomorrow's show in Toronto, and there are seats. I am happy customer.
Stupid company (okay, stupid in this particular aspect): Studio Ghibli museum in Tokyo. Just what tourist would think he needs to plan a visit to the museum a month in advance? Of course I've arrived in Japan and THEN started checking the museum's opening times. Oops. It has limited admission and is sold out beyond the date of my departure. I had to send a dozen emails, make a call, wait a day, then physically schlepp to a reseller in a different part of Tokyo to get the piece of paper (at 7x the price). Boy was that inconvenient. Why doesn't the museum reserve a few tickets a day and sell those at 10-20x the price right there at the entrance?
17779 eligible voters in a district, 17779 'vote' as one. This is Russia.
The ticket brokers like scalpers, and this is the only reason they exist.
. Some even have a financial stake in scalping operations. And just listen to these weasel words: “StubHub has always supported anti-bots legislation and encourages policy-makers to look comprehensively at the host of factors [...]”. Translation: “We support scalpin and we will continue to do so unless the low expressly forbids us, which we expect isn’t any time soon”.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
Most of the posts above believe the artist gets to set the price of tickets.
The artist gets paid their minimum amount when the contract is signed with the promoter. They may have a clause to get a % of the door, they may not. In many cases there is a deposit and a payment delivered to the artists before they go on stage.
This is independent of the promoter who is on the hook for the act in question. They are responsible for paying the artist, the location of the event, and all costs associated.
Scalpers make their living off of the difference between the promoter and the buying public - not directly to the artist.
The industry is full of "promoters" who have lost their shirts on sold out shows....
Which accomplishes NOTHING, since we're talking international borders.
And, meanwhile, they put into place apparatus to assist abusers in their endeavors.
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The companies selling tickets put no real controls in their system to stop the mass purchase & reselling of tickets. Companies without rules are enablers. After all, they just want to sell their stock and make their profit, so there's little incentive for them to change unless there are huge amounts of empty (but paid for) seats at events. These companies are the source of the problem, and it's up for them to fix it. The scalpers want to make a new market off of art appreciation, and thus resells items for ridiculous markups. Exploiting other people for more cash than something is worth = Shitty job for shitty humans who live in unsustainable bubbles. HOW ABOUT THIS FIX: Ticket companies sell 1 ticket per transaction. Purchased tickets are attached to a person's name, email, phone number, etc. People can only pick up these tickets at the event itself after verifying with their personal information / ID card. More options, like ticket transfers or extra rules, could and should be implemented to enable consumer choice & counteract successful scalpers who try to find exploits in this system.
I agree with this sentiment.
>Then there's the problem of what qualifies as an ID, especially with international events.
There is no such thing. Just fucking specify what is valid, and follow those rules. Just don't go full retard and think passports are supposed to be used for civilian identification.
You don't even need to do it properly, anything with name on is fine so long it looks like its real plastic. If it gets to the point where scammers has to run a card printing operation, with mismatched genders and name heritage, well thats at the least a cost they have to bear.
The problem is having a handful of individuals setting up a vast network to snap up all the tickets instantly. No matter what ticket price they set, these people will have the capital to buy huge chunks of the tickets to resell. Every time. Their systems are setup to snap up tickets faster than you can by going through the process legitimately.
If all the tickets get bought in a matter of seconds by scalpers ( who are helped by bots so good luck competing with them), your only option is either scalpers or not going to any shows that require a ticket for admission. BTW there is a neat trick to solve this problem: Tie every ticket to an ID or a passport, like the airlines are doing. There will be people who will complain, but they will be neckbeards who don't go to shows anyway, so there will be no loss.
These scumbags got hold of a bunch of tickets to a charity concert and sold them at a huge markup. None of that money went to charity, of course.
I've calculated my velocity with such exquisite precision that I have no idea where I am.
His strategy is extremely high-risk. If he guesses wrong about the demand for one major concert, he is through. The way to make long-term money on reselling tickets to anything is by charging a commission.
If I see a concert is sold out, I don't go. I also don't stand in line for movies or restaurants, because there are plenty of other options. And often, those options are still satisfying, cost less, and aren't as crowded or noisy. Movies eventually come out on DVD anyway. It's the same movie six months from now as it is in the theater. I'll admit the sound is better in the theater or concert, but I can still enjoy it. I don't have the hedonistic desire to have the 'best' experience, just to enjoy life to it's fullest. And that includes not standing in line or paying too much.
If more people stopped giving in to their 'gotta have it' hedonistic personality, the scalping market would dry up. It must be nice to have so much disposable income that one can spend hundreds of dollars on a concert, or take days off of work and ignore all obligations to wait in line to be first.
I rarely read replies, it's my opinion and if you thought about your opinion a little more, I'm OK with that.
This is why I just don't go to concerts. I would like to from time to time, but it just seems like each and every person in a seat is getting ripped off. I won't subject myself and my family to that. I hope that someone things of a fair and equitable way some day.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Not even close. Maybe live event scalping is different than product scalping though.
I tried, and ultimately failed, to sell into the toy market (action figures specifically). The issues as I see them are that "manufacturers" (they don't really manufacture) and retail outlets consolidated in the last 20 years. Hasbro, in particular, swallowed up _alot_ of competition. As the remaining players grew bigger, they did what every big company inevitably does - they made excuses about how hard it was to deal with small customers. I remember one story about how when Power Rangers was new, an independent shop went to reorder and found that Bandai had raised the minimum order from $10K to $90K overnight, which shut out the independent shop from dealing with Bandai ever again. So now they basically sell to Walmart, Target, TRU, and a handful of distributors.
Going through a distributor is a waste of time. It's actually cheaper for me to wait for one of the big three to run a sale. Even if it weren't, Hasbro in particular plays games with distributors, soliciting products with false delivery dates only to deliver months late after sales at the big three are slowing down. Then they deliver your product, at almost retail price, and immediately thereafter the big three do their clearances to undercut you. But...here's the other issue...the big three do a pretty lousy job with distribution. I live in a state where I can't buy toys at retail because they don't stock toys at retail (incidentally, why I thought I had a shot at success). So I have to wait for independent shops who still bother to put up with this bullshit to get their stock in...and sometime I just find other things to spend my money on. Then they all make retarded statements like how kids just don't like toys anymore. Or cry about Walmart being mean and controlling.
Prices aren't too low. Distribution is fucked up and competition is non-existent.
As it relates to event scalping...haven't alot of these events consolidated down to very small number of organizers and TicketMaster for distribution?
My variation of my question on this is why don't stars play a city longer?
If there is so much demand for Adele when she arrives in Toronto, why does't she play for ten nights?
Seems much more likely people will get tickets.
You see this a little bit with comedians - When a top act announces they're coming to town they announce one show. Then two weeks later "a second show has been added!" Then a month after that a second night... then a second show that second night.
Just create enough inventory in a market that the wind comes out of the scalpers' sails.
Scalpers can sell their tickets at a profit. Clearly they're charging what the market can bear. If venues raised their prices to near what the market can bear and sold tickets online directly using an easy-to-use system, the profit motive for scalping would go away. Real question is, why aren't venues selling directly at more of a profit?
the folks running major corporations that already get most of the H1-Bs all mostly sit on each other's board of directors. Plus I'm sure they'd take that opportunity to raise the number of visas. Put enough of 'em out there and the auctions won't go that high.
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There are numerous ways the ticket brokers could cut out all the scalpers if they wanted. Raising prices, auction, non-transferable tickets, and many others. The ticket brokers like scalpers, and this is the only reason they exist.
Exactly this. They could follow the lead of the airline. You could have a cheap ticket which requires a picture id to match someone in your party. If you have a party of 10, you would only have to check one id. You could also sell a certain percentage at auction. Most of these concerts are also sellouts so even allowing someone to sell it back so that someone else can rebuy it wouldn't hurt the venue.
I think the main reason they keep the prices low is not because they want it affordable to fans but because they want the perceived artificial scarcity. They want it to sell out in minutes. If it doesn't sell out in minutes, it makes the artist look less popular.
it doesn't work that way. Multiple bands have complained that nobody shows up at their shows because the tickets have been scalped like crazy. If I can sell 1000 tickets for $10 or 10 tickets for $2000 I'm going with option b. The reason event promoters can't do that is bands don't get a cut of ticket sales unless they're so huge they can fill arenas. Bands make their money selling merchandise, so if nobody shows up to the show they lose money on the tour even while the scalpers are making bank.
Plus the venue owners don't mind the scalpers one bit. All they care about is selling the tickets in the first place. The system lets the venue owners put the risk of actually putting people in seats in the hands of the scalper and the band, and super-fan "whales" (it's a free to play term that seems to fit here) mean the scalpers aren't taking much risk. They just need 10 guys with more money than they know what to do with to make an extra $10k like I mentioned above. The ones that get screwed are the bands when there's nobody to sell t-shirts & CDs to and when they die on the vine because folks lose interest because they can't afford to see them live.
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Two things, competition for the stadium where they play and wanting to visit multiple cities on their tour. The second is probably the biggest. Want to visit 300 cities in about a year, no time for spending 10 nights per city.
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There are no scalpers selling milk outside the grocery store.
Give it time. And no, they won't be taking Bitcoin.
I don't understand why you would not want me to go to the scalper.
If anything, the internet has shown that I can buy anything I want,
when I want, as long as I am willing to pay the price.
Don't get me wrong, I don't like to pay 3 times the ticket price. If i want
to see an artist, I'll pay. won't like it, but I'll pay.
When you have access, you can time your choices down to the day.
a good example for me was; I had a choice, pay 250 for a concert ticket,
or a cheap flight to Texas and see a rodeo the next day. The rodeo was
fun as heck since I've never seen one as big as this before.
the internet has given rise to amazing choices, but you need to balance
your choices. I can still find a lot of free concerts to go to or real cheap
open air concerts.
if you see me, smile and say hello.
A rather simple solution to that problem is ...
the scalper is the promoters hedge. Example :
the cost of the concert with the artist is 12 million.
I hedge the bet with selling the food concessions out to 3rd party
I hedge the bet with selling the parking concessions again to a 3rd party
I hedge the bet with selling the VIP concessions to another 3rd party.
those 3 will cover about 20% to 30% of my cost, and I might be able to
negotiate some back end too of those sales.
Now I price the tickets to sell @ 80% of my cost and keep the 20% of the rest
as premium tickets. scalpers come in and purchase blocks of it, they cover
the rest of my risk. I can safely goto stub hub or another venue to offer my
private inventory and really make a good profit.
scalpers are a hedging device of the promotor.
if you see me, smile and say hello.
By your reasoning, if I got an invitation to a party and couldn't come, I could sell it to someone, they could come to the party, and that's obviously happening because the price of the party invitations (free) was less than the market-clearing price (the price I managed to sell it for).
Unless you collect tickets and only bought the ticket to hang it on your wall, a ticket is just there to indicate the existence of an agreement. The performer didn't agree to let into his venue people who bought tickets from scalpers.
What an odd post. So, this article is about "Scalpers in Canada".. Yet you quote 17 U.S.C. 109 which is a US law?
Did you know that reselling tickets use to be against the law in Most of Canada (my home provice of Ontario for sure).
Did you know that the "right of first sale" is under constant attack in the US as well (see Omega vs Costco).
Ontario allowed reseling to try to let people sell their tickets for valid reasons (cant make teh event for example). But this encouraged electronic scalping with bots and Ontario is working on plans to fight this.
https://www.thestar.com/news/q...
you mean problem created. Now you have events where for that to be of any value you have to hire a massive set of people to check ID on the way in, raising ticket costs and massively increasing the time taken to get into events.
Or just have gate sales. Yeah, its a hassle queuing up, and a bummer if you came all the way to the venue from out of town and it is really sold out, but internet presales has proven itself to be so dysfunctional, that I still think it would be preferable.
"Right of first sale" is not a universal principle, for instance you cannot resell a plane ticket, or a fishing license. In some jurisdictions, scalping is illegal.
When New Zealand hosted the Rugby World Cup in 2011 they did exactly this. For this one event they made reselling tickets illegal to crack down on scalping. If you had extra tickets you could sell them back to the agency at face value and they managed all sales (and resales).
So it can tackled fairly easily, but the people selling the tickets need to want it, and this clearly isn't the case here.
Is that StubHub's whole statement? I ask because it's very telling. Sure, they say that bots are "unfair and anti-consumer" but that its the government's responsibility to come up with a solution, not theirs. I mean, we know SubHub doesn't care about consumers but it's almost refreshing to see them admit it.
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