How Organizations Are (Nut)cracking Down on Ticket Scalping

This is the third installment in a research series focusing how digital ticket scalping is affecting the performing arts industry.

In many areas of the United States, ticket scalping has become the bane of ballet companies. Unfortunately, some savvy scalping agencies have devised calculated strategies that allow them to make high returns off of popular ballet performances while taking advantage of unsuspecting customers’ lack of awareness about what selling platforms are legitimate. Each ballet company has its own nuanced method of dealing with these scalping outfits, ranging from reactionary to more proactive and progressive. AMT Lab contributor Katie Grennan discussed prevention and damage control strategies with both The Pittsburgh Ballet Theatre (PBT) and Ballet Austin based on their recent experiences in order to find out how arts organizations can prevent damage to their reputation and to their organization caused by ticket scalpers.

Buying in bulk

Both the PBT and Ballet Austin cite that they have seen most of the scalping within their organizations occur for tickets to the Nutcracker. For years, Ballet Austin has offered tickets at a low price point of only $15 in order to maximize accessibility for this popular piece of programming. Unfortunately, scalpers seem to target this block of seats directly, and quickly wipe out this entire section in order to resell them through dummy sites for almost 10 times the price. This creates an array of issues from Ballet Austin’s perspective, but the main issues are how it impacts the overall customer experience and the atmosphere during show night. Says Senior Manager of Audience Sales and Services Aaron Majors, “sometimes, these guys aren’t able to offload all of their inventory. They don’t care though because their margin is so good, and they just let it go unsold. Then, we have empty areas of our hall, which has a negative impact on the ambiance. It’s a lose-lose situation for everyone, especially for the customer.”

Majors emphasizes what a big business Nutcracker ticket scalping is for this specific outfit based in Houston. In fact, he came across a YouTube video created by the head of the organization tailored specifically for training people in the Philippines on “best practices” for ticket scalping. “They have a browser that is designed specifically for this purpose. It opens up multiple sessions all at once, allowing individuals to place over 20 orders in a rapid fire manner around 3 AM, so we aren’t able to see it. They have their operations, are good at what they do, and the worst part about it – it’s totally legal.”

Playing their game

Much of the activity that occurs by the scalpers is technically legal due to a lack of regulation. Ballet Austin recognizes these industry dynamics, and has decided to take more of a progressive approach to this situation rather than focusing resources on coming up with tactics to stop the scalping activity from occurring:

"A lot of organizations are thinking along the lines of ‘how can we stop them? How can we block IP addresses or limit the tickets they buy?’ Basically, our philosophy is that we recognize they are taking advantage of us, and our time and energy is best spent by turning this into a positive. We know that any roadblock we put up will also have a negative impact on our customer, and the scalpers will likely find a way around it anyway."

For instance, Ballet Austin was able to dynamically price tickets so that when identified scalpers attempted to purchase tickets, it triggered a reaction in their system that caused the price to go up. However, this also slowed down purchase time for all customers, and the scalpers were usually able to go through a back purchasing channel via a proxy IP address.

Ballet Austin has identified tactics that they believe will allow them to minimize the effects of scalping in the long term. Rather than ignoring or shying away from the issue, their tactics focus on going head to head with the scalpers. For instance, they closely monitor the websites on which their tickets are resold, and actually put portions of their ticket inventory at face value on the very same sites. Ballet Austin hopes that having their appropriately priced tickets right next to comparable yet higher priced tickets will curb scalped ticket customer purchases. Majors explains, “I actively monitor the pricing of our product in the secondary market, and plug into all the KPIs to see the average price and where we compare.”

Additionally, Majors closely monitors what the online landscape looks like and keeps track of what the websites look like that are reselling their tickets. Like the PBT, Ballet Austin has had to issue cease and desist letters to the creators of the dummy websites that use copyrighted images and video from their own sites.

Finally, Majors mentions that Ballet Austin is reevaluating their pricing strategy, and would even consider adjustments that would encourage the scalpers to buy more inventory at certain points. “At the end of the day, nothing is stopping them from doing something negative to our customer, and it is out of our control. If we can somehow get more money from them when they are trying to take our inventory, it would ultimately be better for us, so we are trying to figure out how we can do that.” Aaron emphasizes that he ultimately hopes the Austin Ballet gets to the point that the scalpers will not have any incentive to continue targeting them, but remains skeptical. “They are only interested in our cheapest seats and their margin is insane. There isn’t a disincentive for them, so we need to figure out how we can best wound them.”

A delicate subject

Informing patrons that they purchased scalped tickets is complicated. People go to the ballet for a nice evening out and most ballet companies spend a good deal of effort on customer service to ensure a high quality of experience. Thus, telling someone upon arrival to the theater that they purchased tickets through a third party for an excessively high markup is not ideal. In order to gently raise awareness about this issue and protect the customers in the future, Ballet Austin inserts a blurb in all patron emails that states “If you feel like the price you paid is too high for your tickets, it probably was.  In the future, please buy directly through Ballet Austin for the lowest price possible.”

The Pittsburgh Ballet Theatre has taken similar measures to protect future purchases by their patrons. They recently created cards that they pass out to customers upon arrival at the theater that that informs them if they purchased through a third party and how to order directly through the PBT next time. They also raise awareness about the issue by inserting language in all program booklets that gives information about scalping and how to purchase through PBT instead. Says PBT’s Marketing Director Aimee DiAndrea, “we thought about putting the cards on every seat that was purchased through a third party, but the issue with that is we don’t have the resources to do that every time and we don’t want to ruin someone’s evening. They brought someone on a date, and then there’s a card that says ‘you’ve been duped’ isn’t how we want to go about things.”

Both the Pittsburgh Ballet Theatre and Ballet Austin have seen a wide range of customer reactions upon realizing that the tickets they purchased were sold to them through a third party at a marked up price. They cite that most are surprised, and some become upset, defensive, and even angry that they were taken advantage of. Majors recalls a time when a family showed up at the theater yet didn’t have any tickets reserved under their name. Ballet Austin realized that this family unknowingly purchased nosebleeds tickets through a scalper for thousands of dollars, and in order make up for what happened, they gave them complementary tickets to a better area of the theater. “It creates a customer service nightmare, because we don’t want to tell people that they did something wrong by purchasing through a fake site.”

A false demand

Ultimately, scalpers continue to get away with selling tickets at such a high markup to performing arts events like The Nutcracker because of the misconception that there is limited supply available to the public. Says DiAndrea, “There is a perception out there that nutcracker tickets are really hard to come by. This isn’t so – you can usually always get tickets to the nutcracker. They may not be the best in the house for a popular performance, but it is really rare that they will sell out of tickets to every single performance.” Majors echoes DiAndrea’s sentiment by contrasting the market for the Nutcracker against a Taylor Swift concert. “The secondary market for Taylor Swift exists because there is no inventory. For us, that’s not the issue. The scalpers are deceptively buying Google ad words in order to out-market us. It’s a different kind of scheme.”

Don’t dance around the issue

Ticket scalping is a practice that will likely continue to occur and evolve with technology as long as it is legal. Majors emphasizes, “Ticket scalping is a reality that already happens in many genres. All sectors of the arts are having to reevaluate our business model, address ticket scalping head on, and think a little differently about how we price our products to get it out there to customers.” Arts organizations must be informed about the ways in which they could specifically be targeted and keep a pulse on the various online channels that have the potential to sell their tickets in the future. Identifying proactive and creative ways to reach customers as opposed to exerting extensive resources on the scalpers alone will result in the greatest chance for success.