A suggestion for the Hannah Montana problem

The Wall Street Journal had a story on Friday about a lawsuit by Ticketmaster against a ticket scalper.

IAC/InterActiveCorp's Ticketmaster earlier this year filed a federal lawsuit in U.S. District Court in Los Angeles against RMG Technologies Inc., a small Pittsburgh-based company that runs TicketBrokerTools.com. According to papers filed with the lawsuit, RMG rents to scalpers software that can inundate Ticketmaster's computers with thousands of requests for seats, "in effect allowing them to cut in line," according to Joe Freeman, a Ticketmaster vice president.

Last month, Ticketmaster filed a motion for a preliminary injunction that would prohibit RMG from selling such software; Judge Audrey B. Collins is expected to rule on the motion this month.

[...]

The Internet era has brought speed and convenience to all sorts of consumer transactions. For concertgoers, however, it has also led to ever-faster sellouts for hot events. Ticketmaster deploys technology that is supposed to stop brokers from gaining access to large numbers of seats via online sales. But it says brokers' software circumvents the company's protections.

That has placed large numbers of seats in the hands of brokers who use eBay Inc.'s StubHub, Craigslist and other online venues to resell the tickets at a big mark up.

One situation roiling consumers involves the 54-concert "Best of Both Worlds" tour in which singer-actress Miley Cyrus is performing sets as herself and as her fictional alter ego, Hannah Montana. Parents and children have found finding tickets for the shows difficult and expensive. The issue is drawing the attention of government officials. On Thursday -- in a rare Internet-age example of authorities enforcing antiscalping laws -- the attorneys general of Missouri and Arkansas filed lawsuits against people accused of illegally reselling Hannah Montana tickets.

According to StubHub, tickets for "Best of Both Worlds" are currently selling for an average $237, making them pricier than seats for the Police ($209), Justin Timberlake ($182) and Beyoncé ($212). The highest face value for a ticket on the Hannah Montana tour: $63.

Salon's Farhad Manjoo has a suggestion for how to deal with this:

There is a simple way Ticketmaster and entertainers could address this problem -- they could just raise prices. As Silicon Alley points out, if people are willing to pay $200 to watch Miley Cyrus, "Hannah Montana"'s 14-year-old star, why are her concert promoters selling tickets for just $60?

But that solution defeats the scalpers only by adopting their ways -- and the fans would still be stuck with expensive tickets. I propose a better way: Make people take a quiz to get tickets to their favorite acts. I'm serious.

Here's what I mean. When you select "Hannah Montana" on the Ticketmaster site, the system would ask you three or four multiple-choice questions about the show. Only if you get them right will it let you in to buy tickets. It's like a CAPTCHA, but instead of separating robots from humans, it separates true fans from scalpers and occasional enthusiasts.

Ticketmaster could draw its questions from a long list in order to keep the scalpers from learning all of them. To be sure, the scalpers might still find ways to get around the measure -- they could, for instance, hire a "Hannah Montana" expert. Still, it would trip them up, especially if Ticketmaster imposes the plan across all acts. Are the scalpers going to hire Bruce Springsteen expert, a Justin Timberlake expert, and a Genesis expert, too?

One commenter thinks Google and Wikipedia would defeat that scheme. I think the point is that a rotating set of questions would slow down the scalpers, which in turn would give more real customers a chance to buy. The auction idea proposed here has promise, but I think there's an easier way to go. Why not set prices on a sliding scale, where the first (say) 10% of tickets sold go at some multiple of "face value", the next 10% go for a smaller multiple, and on down to actual face value? This defeats the advantage for being first in line, which is what the scalpers use to leverage their market. And clearly, there are plenty of people willing to pay those prices for hot acts like Hannah Montana, so there shouldn't be any danger of those tickets going unsold; you can also build in a time factor for each price drop if need be. The main disadvantage to this is that people won't like it at first, but if it means greater availability, it'll eventually get accepted. At the very least, you'd think TicketMaster and the performers themselves would love the idea since the extra revenue would go to them instead of to third parties.

That's my suggestion, anyway. Feel free to tell me why it's as stupid or defeatable as all the other failed approaches have been so far.

Posted by Charles Kuffner on October 09, 2007 to Bidness