"We don't condone it and we are going to make sure that we don't have people that are clearly violating our policies,” Smith says of the video.
Smith spoke to Billboard in an exclusive interview about his company's plans to address the TradeDesk controversy. Below is an edited version of that interview.
What is your reaction to the Toronto Star/CBC story?
I think it's frustrating at the basic level. It’s always frustrating when there's that big of a gap between how the company is perceived and the great many people who work for us. I've been doing this for 15 years and I've been in this chair for five. In between the folks at Live Nation and the folks at Ticketmaster, I’ve never been more proud of the people that we work with.
Was the story accurate?
The story is predicated on misinformation and a misunderstanding that paints the company very differently than it actually is. That's frustrating. That being said, there's clearly some things that we're not doing well enough. We'll learn from it and we'll make some changes. I'm happy to make those changes. We think we should make those changes.
What are those things that you think you’re not doing very well?
I think everybody out there -- really the vast majority of people -- don't actually understand what resale is. They believe that all resale is bad and scalpers are buying tickets and selling them for massive profit. The reality is, there's a clear distinction in the resale market between ticket brokers, generally, most of which are legitimate and play a role in the ecosystem that lots of people rely upon. That is separate and distinct from cheaters and people who use bots and make up fake accounts, doing all of these things to try and get as many tickets as they can, mostly for the high-demand shows. Those are the people that we're absolutely waking up every day trying to find.
Does Ticketmaster allow the resellers it works with to pull tickets before fans get a crack at good seats?
We do not provide preference in any way for any group of people, professional or otherwise, nor do we provide tools or programs that allow them to buy tickets in bulk or gain an advantage over fans. Period. We do not do that. We never have. We never will. TradeDesk is an inventory management tool that allows professional sellers, which do not cheat, to pull all of the inventory that they have, which is mostly gathered in very, very legitimate ways. There’s lot of these tools out there; Ticketmaster is not the only one. StubHub has product called Ticket Utils and VividSeats has product called SkyBox.
Are those products similar to TradeDesk?
For the most part, they all do the same thing. The difference between our tool and everybody else's tool is that we verify the tickets. We make sure that every one of those tickets are real. When it comes into the Ticketmaster system, it's validated and we make sure that we own every barcode once they post it to us. And then when we sell it, we reissue brand-new barcodes to the customer. So it's exactly the same as the primary ticket. It’s in their name, they own it, they control it, all those types of things. It's an advantage for us because we have a source for that inventory that is not fraudulent.
In the video, the sales rep seems to indicate that brokers are using TradeDesk in a way that violates terms of service. What is your response to what he said?
We absolutely do not turn a blind eye to the misuse of our products. As you know, we spend a ton of money and a ton of time doing things like building software that prevents bots from buying tickets. These tools are not perfect, but we continue to improve those tools that identify suspicious activity. We have gotten pretty effective at blocking people from buying lots of tickets, and we take it seriously. Where the distinction has been made and where we have to improve, I think, is on the backside of those products. We probably don't do enough to look into TradeDesk even though it's hard and it's not as obvious as people are suggesting it is.
Does that mean enforcing primary ticket limits on TradeDesk?
The reality is, yeah, they could have more than their ticket limit, but they could have bought those tickets very legitimately. They could have bought them from other resellers or directly from the venue. You can't just go back and say, "Hey, you have 50 tickets. The ticket limit was 10 and therefore you're a criminal and we're canceling all your tickets." It's not that easy. Can we do more? Yes, we can do more. We're going to look at all of those accounts and make sure that we've got tighter practices in place to identify suspicious activity. But to say that we turn a blind eye to this for the sole purpose of making an extra buck is just not accurate. If we were really interested in doing that, we wouldn't do any of the things that I just mentioned.
How can Ticketmaster justify taking a public position against scalpers, while also operating a ticket-resale platform?
At the end of the day, the secondary market is going to exist. People are going to buy these tickets, whether they use TradeDesk or not. If tomorrow we said, “OK, we're in conflict, we're going to shut down TradeDesk," all that's going to happen is that these tickets are going to go someplace else. [Brokers] aren't going to stop trying to buy tickets. They’ll buy the tickets, they’ll put them in a different marketplace, the tickets won't be validated and fans will be worse off. The real solution is in the ticket. We've got to get rid of PDFs, we've got to get rid of the barcode, and we’ve got to expand identity-based ticketing. We have to use Verified Fan and digital tickets so the artist has the tools that they need to be able to dictate how those tickets are sold.
Is Ticketmaster’s business model to sell the ticket twice -- first through the primary sale and then through the secondary sale?
No. Resale is a much, much smaller portion of where the company makes money. The resale market does exist and it needs to be serviced and if we weren't in it then other people would be. Number two, if the artists wants to be able to say "I know my ticket's worth $500, but I only want my fans to pay $100,” they should have the ability to make those tickets nontransferable and digital. Until those things happen, we feel we've gotten an obligation to provide a secondary market.
What about what the person in the video said, that he can't think of a single person who didn't have multiple accounts and that one can't really make any money selling a few tickets at a time. What do you say to people who were stunned to hear that?
Number one, we absolutely don't condone what he said. What he said doesn't represent our policies. It doesn't represent what we stand for and it doesn't represent who we are. Number two, people have multiple accounts that have tickets that they acquired from multiple locations, very legitimately. These are ticket brokers and many do this for a living now. Do some individuals have too many accounts? That's where we need to make sure that we're diligent and regularly checking on the backside and not only relying on all of the protections, of which there are many, on the front side to ensure that 100 percent of those tickets are sourced cleanly and within our policy.