Online ticket search leads to bill, tug-of-war By Judy Lin -- Bee Capitol Bureau
Published 12:01 am PDT Sunday, July 16, 2006
Story appeared on Page A1 of The Bee
What started as a staff effort to see an Eagles concert has led one state senator into the competitive and territorial world of ticket sales.
Last fall, Sen. Jim Battin and his staff mounted what they thought would be a surefire plan to nab tickets by working the phones and computers in his district office.
"Everybody was in their offices and we were all coordinated. I'm calling, I'm going online. And no one could get through," said Battin, R-Palm Desert.
Frustrated by his experience, Battin set out to write a bill that would improve the online ticket purchasing odds for members of the general public -- a constituency he views as disadvantaged by rising prices, technological changes and preferential treatment to season-ticket holders and corporate sponsors.
Battin introduced legislation seeking to ban "pinging" -- an electronic manipulation of online ticket sales orchestrated by hackers to capture as many tickets as possible so they can be resold at a profit.
Battin didn't anticipate his anti-scalping bill would become the focus of a vitriolic tug-of-war with venues, ticketing agencies, brokers and online auction sites all clamoring to maintain their share of the nation's $3.1 billion concert ticket industry, not to mention sporting events and theater performances.
Backed by Ticketmaster, the world's largest ticketing company, Senate Bill 1602 makes "pinging" punishable by up to a fine of $5,000 and six months in jail for the first violation, $10,000 for the second.
Ticketmaster representatives say the company doesn't have a problem with brokers or auction sites; it has a problem with hackers gobbling up seats and frustrating the company's customers.
"Computers have been able to get through our defenses in certain cases and acquire tickets. We devote a lot of time and energy and money to counteracting their ability to do this," said Ed Weiss, executive vice president and general counsel for Ticketmaster.
It's unclear, though, how widespread the "pinging" problem is right now.
Weiss said more companies are being forced to use electronic safeguards, such as CAPTCHA -- a test that requires ticket buyers to read a distorted image and type the letters, in order to filter out computers from humans and thwart the hackers. It's an acronym that stands for "Completely Automated Public Turing test to tell Computers and Humans Apart."
Even as companies try to protect themselves, hackers are constantly finding new ways to beat them, Ticketmaster officials say. Ticketmaster declined to say how much it spends on firewall protection, but the company noted that it drives up the cost of tickets.
"It's a never-ending battle and the stakes grow higher," said Kerry Samovar, senior vice president of policy for Ticketmaster.
But some in the cyber world question whether there is a problem. Pradeep Khosla, dean of engineering at Carnegie Mellon University and director of CyLab, which developed CAPTCHA, said that while it is possible for hackers to attack ticketing systems, a more likely scenario is that servers are being overloaded when tickets go on sale.
"It's like me calling you all the time so your phone will always be busy. But it doesn't mean you have picked up and I'm talking to you," Khosla said. "I think it could be happening, but my gut feeling is Ticketmaster is exaggerating."
Khosla said lawmakers should do their homework and get a better understanding of what's happening with new technology before drawing up legislation. For example, he noted that anti-spam legislation has done little to reduce junk ads.
Battin's bill doesn't stop at pinging. It makes it a misdemeanor for anyone who buys more than the ticket limit for a specific event -- sometimes as low as two tickets -- to resell the extras at a profit. The bill allows for fines up to $1,000 and six months in jail.
That has sent ticket resellers reeling.
Auction site eBay voiced concern that its customers wouldn't be able to sell Giants or Kings tickets online. And licensed ticket brokers said they would be put out of business.
"We want to avoid any legislation that would have a blanket impact on the secondary market," said eBay spokeswoman Catherine England.
Kurt Autenrieth, president of SC Tix Inc., likened West Hollywood-based Ticketmaster's moves to a "300-pound gorilla" trying to monopolize both primary and secondary ticket sales.
"The only entity on board with this legislation is Ticketmaster," said Autenrieth, an active member of the California Association of Ticketing Agencies -- a loose-knit group of brokers who successfully lobbied the state to legitimize the secondary ticketing industry in the 1980s.
Already the public has limited access to limited tickets because a portion of seats are held for VIPs, especially in cases of high-demand concerts such as Barbra Streisand and the Rolling Stones. Autenrieth estimates that California's 200 licensed ticket brokers sell a fraction of what's left.
"Never, never, never has there been a time when we have sold more than 5 percent of gross tickets for one event," Autenrieth said.
Regular concertgoers like Matthew Hargrove and his wife, Darcy, say that if they want a ticket, they have to use Ticketmaster.
Ticketmaster's owner, IAC/ InterActiveCorp, reported $245.7 million in revenues from its ticketing business, according to the company's most recent quarterly earnings. That's up 16 percent from the previous year.
Hargrove, 36, said he's gotten savvy about buying tickets online. He snagged front-row tickets to a Black Crowes concert for $20 on Ticketmaster.com the day before the concert.
"The worst time is when they go on sale," said the Sacramento resident. "We learned that four or five years ago trying to buy Neil Young tickets."
He theorizes that because venues, promoters and advertisers start out holding on to good seats, it takes time for any unused tickets to make their way to the general market.
Samovar of Ticketmaster didn't dispute that: "We offer the best available seat based on what tickets are released to Ticketmaster by its clients."
The measure, still pending in the Senate, has a long way to go to win approval before lawmakers adjourn next month. Battin says he's hoping to rewrite the bill in a way that will address the problem without disrupting the industry.
He ended up making the Eagles concert in the Coachella Valley after the Recording Industry Association of America gave him the tickets.
"I'm not carrying anybody's water on this," Battin said of his bill. "I just want consumers to be able to get those tickets."
