The Weird World Of Economics

The Economics Of Scalping

LISA SENAUKE, a Bruce Springsteen fan since 1973, tried to get tickets to his Oct. 26 concert in Oakland, Calif. The tickets were to go on sale at 10 a.m. on Sept. 17, and starting at 9:58 a.m., she logged into her Ticketmaster.com account, credit card in hand. But though she tried again and again for the next hour to buy tickets, she was always told the same thing: nothing available.

“I never even had a chance,” she said the other day. “Who, then, got those tickets? How many people managed to log in, in between me, and sweep up the tickets?”

Ms. Senauke’s frustration is not isolated. The coming concerts of 14-year-old Miley Cyrus, the daughter of the country singer Billy Ray Cyrus and the star of the Disney show “Hannah Montana,” sold out in minutes. And the same thing happened with tickets to recent reunion tours by the Police and Van Halen.

While some fans just quietly give up, others have complained to government officials, particularly after they found tickets to the same concerts or sporting events available — sometimes at many times the face value — on secondary sellers like Stubhub.com and TicketsNow minutes after the public sale began.

After hearing from some would-be ticket buyers, the Missouri attorney general announced Thursday that the state was suing three ticket resellers on charges they violated state consumer protection laws. That same day, the Arkansas attorney general said he was seeking documents from five resellers. And the attorney general’s office in Pennsylvania is also looking into the ticket sale business after receiving several hundred complaints over the recent sale of tickets for a Hannah Montana concert in Pittsburgh, said a spokesman, Nils Frederiksen.

“All hell broke loose with Hannah Montana,” said Justin Allen, the chief deputy attorney general in Arkansas. “The tickets were gone in 12 minutes and when people turned around, they were selling at online sites for sometimes as much as 10 times the face value.”

Ticketmaster, the subsidiary of the IAC/Interactive Corporation that bills itself as the biggest seller of concert and sports tickets in the world, is also facing questions from angry fans and has sent representatives to meet with state and local officials. They argue, in part, that the number of tickets available to the public at a concert is often far less than the total number of seats in the arena.

Ticketmaster has also filed a lawsuit in Federal District Court in Los Angeles against a software company based in Pittsburgh, RMG Technologies, and several ticket brokers contending that they have discovered a way to get around Ticketmaster’s defenses.

They “are bombarding Ticketmaster’s Web site with millions of automated ticket requests that can constitute up to 80 percent of all ticket requests made,” Ticketmaster states in its suit. These actions deny “the public access to tens of thousands of tickets so that RMG’s customers can purchase and resell those tickets to the same public at inflated prices,” it contends.

A lawyer for RMG, Jay M. Coggan, denied the allegations. He said in an interview that RMG provides a specialized browser for ticket brokers but would not discuss the company’s services in detail, saying such information was proprietary. He added, “Ticketmaster isn’t losing any money — they’re getting paid full dollar for every ticket sold.”

A hearing on Ticketmaster’s suit is scheduled for Oct. 15.

The fact that tickets to popular events sell out so quickly — and that brokers and online resellers obtain them with such velocity — is clouding the business, many in the music industry say. It is enough, some longtime concertgoers say, to make them long for the days when all they had to do to obtain tickets was camp out overnight.

Joseph Freeman, the assistant general counsel for Ticketmaster, said that in some cases, demand for tickets simply exceeded the supply. Even in large arenas, a certain number of tickets are reserved by the artist, the promoter and the concert site and some may also be set aside for fan clubs or presales, like ones frequently held by American Express or Visa. But thousands of tickets are still typically left to be sold to the general public.

In Kansas City, for example, there were “only 11,000 seats available for the Hannah Montana concert,” Mr. Freeman said. “We got about 8,400. Of those, half went to the fan club while the other half was sold to the general public.” Mr. Freeman added that more tickets are often released after the initial sale date once the stage configuration is known.

While Ticketmaster refused to disclose how many hits it receives when tickets go on sale, Mr. Freeman said the company had the ability to sell several thousand seats a minute.

But how do hundreds of tickets show up on online sites minutes after individuals have been shut out? Officials at resellers like Stubhub.com, now owned by eBay, guarantee the authenticity of the tickets. “What’s often mistaken about our marketplace,” Sean Pate, a spokesman for Stubhub, said in a statement, “is that we procure and price tickets when, to the contrary, we simply provide a secure and managed online marketplace for those who wish to sell tickets they possess.”

The Ticketmaster suit includes a statement from a former ticket broker, Chris Kovach, who was originally named as defendant but later settled with Ticketmaster. He said that he used RMG’s “automated devices to enable me to access Ticketmaster’s Web site.” Mr. Kovach said in the statement that he paid a monthly fee for access to RMG’s site and that its software enabled him to simultaneously search and request tickets — sometimes more than 100 sets at a time.

Mr. Kovach asserted in the statement that RMG’s system is “specifically designed to navigate or otherwise avoid various security measures on Ticketmaster’s Web site,” including what is known as the Captcha feature — those squiggly letters in a box that users must retype before they can proceed.

In denying the allegations, Mr. Coggan, RMG’s lawyer, said, “Ticketmaster didn’t get it right.”

So what’s a dedicated fan to do? If tickets sell out within minutes, keep checking the online ticketing company for tickets in case additional seats are released. Don’t rush to buy from brokers or online sites because prices sometimes come down if resellers find they have acquired too many seats, Mr. Pate of Stubhub said. And sometimes, the artist decides to add an extra show, which can provide extra tickets — at face value — to satisfy demand.

In the meantime, potential ticket buyers continue to try various means to capture their prey. Lisa Nicholls of Houston, for example, had already been unsuccessful last winter in buying tickets to a Hannah Montana concert for her children, Alexandra, 10 and Robbie, 8. When the Toyota Center, the Houston arena, announced a new concert, her husband, Rob, sat at home with three computers logged on to the arena’s site at precisely 10 a.m., when tickets were to go on sale.

Mrs. Nicholls, meanwhile, had left the house hours earlier to wait at a ticket outlet at a local supermarket. Despite arriving at 7:30 a.m., she was not the first on line. Still, within minutes, she and her husband were both out of luck.

“I went there thinking we would hedge our bets and do it every which way,” Mrs. Nicholls said. “But only the first person on line got tickets — and I was 10th.”

Jessica Fricke, a Minnesota mother who also failed to get Hanna Montana tickets, tried to put the best face on it. “We are trying to teach our children the law of supply and demand. It’s a lesson for our family. It’s a hard one for an 8- year-old, but a good one.”

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