The Anti-Scalper BOTS Act, Currently On Its Way to Obama's Desk, Called a 'Partial Victory' By Some

Ticket Scalper
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The new legislation is no panacea for the ticketing industry.

It has become so hard to get good tickets to hot concerts that Congress has taken action -- in the form of the Better Online Ticket Sales Act, or BOTS Act. The bill makes it illegal to circumvent the limits online sites put on ticket purchases, which bots do in order to buy tickets for resale, and on Wednesday it was sent to President Obama, who is expected to sign it. 

Almost everyone in the music business sees this as good news. “We think this is a great first step toward artists controlling tickets and getting tickets into the hands of fans,” says Daryl Friedman, Chief Advocacy & Industry Relations Officer for the Recording Academy. 

It remains to be seen how effective the law will be, however, because some of the scalpers who operate bots do so beyond the easy reach of U.S. law, while others access the Internet in ways that disguise their physical location. And although bots buy up a striking number of tickets -- one purchased more than a thousand seats for a U2 concert within a minute, according to a report by New York State Attorney General Eric Schneiderman -- they’re only part of a larger problem. As long as musicians sell concert tickets for less than their market value, there will be money to be made in reselling them -- and online ticket marketplaces make that easier than ever.

The battle against bots is actually best understood as part of a larger war that pits musicians and Live Nation’s Ticketmaster against ticket-reselling companies like Stubhub over how -- and for how much -- concert tickets are sold. A few years ago the two companies and their proxies fought over the issue of “paperless ticketing," which requires concertgoers to present the credit card they used to purchase a ticket in order to get in, and which was more about control than convenience. (Ticketmaster, which dominates the primary ticket-sales market, would prefer that ticket re-sales happen on its proprietary platform.) This year, Hamilton creator Lin-Manuel Miranda brought the issue to national attention as the tickets to the show reached four figures on sites like Stubhub. In August, Miranda announced his support for the BOTS Act at a press conference with Chuck Schumer.

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This year, top managers like Irving Azoff have become more vocal about the fact that Stubhub makes so much money from the concert business but makes little investment into it. (The site does more business selling tickets to sports events, where fans are more tolerant of high prices.) Now that the internet makes it obvious just how much fans are willing to pay, more artists are introducing VIP programs that sell top seats, often with a souvenir and access to an event, for higher prices. But few want to raise the prices for all tickets, which creates opportunities for scalpers.

At a Senate Subcommittee hearing in September, representatives from both sides praised the bill while taking subtle digs at each other. Some, like Hamilton producer Jeff Seller, see the BOTS Act represents as a promising start to regulations that give performers more control over the ticketing process. Stubhub wants lawmakers to look at how many tickets are held back from going on sale -- more than half the seats to some shows, according to Schneiderman’s report.

The BOTS Act is, at least in part, the result of the two sides lobbying against each other in Washington. “The Bots act was supposed to be a locomotive pulling along a whole set of issues,” according to one lobbyist involved with the bill. However, both sides managed to remove the provisions that would have been hurt them, “And now it’s just the locomotive that’s left -- it’s not pulling anything,” the lobbyist says. “It’s not bad for either side, but we’re essentially left with the same set of issues we were before.”

Music business lobbyists believe that further federal legislation on the subject is unlikely -- partly because each side has the power to block the other. That could send the battle to states like New York, where Governor Andrew Cuomo at the end of November signed an even tougher version of the BOTS Act. But it’s difficult to enforce state laws when it comes to online platforms that do business in every state. 

“As an industry, we have to come up with a technological solution that guarantees we’re getting tickets to real fans at face value - even if that’s well below market value,” says Fielding Logan, who oversees touring for Eric Church and other acts at Q Prime Artist Management. “We handled Eric Church's recent fan club presales in an entirely new way, and we overwhelmingly saw the best tickets going to real fans instead of scalpers.”

The BOTS Act is important “because it shows that legislators are taking the problem seriously,” says Everybody’s Management founder Adam Tudhope, who works with Mumford & Sons and Keane, among others. “It’s only a partial victory, though.” Truly changing the ticket market, he says, would require legislation that limits scalping, as well as bots, and puts some of the responsibility for enforcement on ticket resale sites. 

That’s unlikely to happen soon -- partly because Silicon Valley lobbies against any effort to give companies that run platforms legal responsibility for what happens on them. But it could be important for the concert business. “The artists I work with care about this because they don’t want their fans to get ripped off,” says Tudhope. “As a business guy I also think about where that money would have been spent instead -- a T-shirt, an album, a concert of another band?”