I'm William Brangham and this is "Horizons."

Ticket prices for concerts and live events have gone through the roof and fans are increasingly frustrated by how complex the whole process has become.

As bots and other AI agents swarm the system and displace real fans, what can be done to protect consumers?

The Wild West of buying tickets to live events, coming up next.

♪ Narrator: Support for "Horizons" has been provided by Steve and Marilyn Kerman and the Gordon and Betty Moore Foundation.

Additional support is provided by Friends of the News Hour.

♪ This program was made possible by contributions to your PBS station from viewers like you.

Thank you.

From the David M. Rubenstein Studio at WETA in Washington, here is William Brangham.

Welcome to "Horizons."

Anyone who has bought a ticket to a live music or sporting event recently knows that prices are skyrocketing.

According to one analysis, the cost of admission to one of the top 100 biggest-selling shows has jumped by almost 50 percent in just seven years.

Some of this is driven by bigger production costs.

A lot of major artists today are deploying Hollywood-scale sets and lights, and these spectacles are costly to put on.

But a lot of this rise is also driven by how tickets are sold.

Ticket sales are dominated by a few major corporations.

Live Nation, which owns Ticketmaster, reportedly controls 80% of all ticket sales in the U.S., and it tacks on hefty surcharges to every sale.

Then there's ticket resale sites like StubHub and SeatGeek and VividSeats.

Add to that another wrinkle, swarms of bots and A.I.

agents trained to scoop up hundreds of tickets in order to make a profit reselling them at higher prices.

And then there's also dynamic pricing, where algorithms will change the price of a ticket on a minute-by-minute basis, sometimes based on demand, but other times based on what it knows about you, the buyer.

It is enough to leave the average consumer feeling frustrated and ensnared in a Byzantine technological web.

So, for more on all of this, we turn to Brian Shearer.

He's the director of competition and regulatory policy at Vanderbilt University's Policy Accelerator.

He was formerly at the Consumer Financial Protection Bureau in Washington, D.C.

And Ben Sisario covers music and the music industry for The New York Times, including the multibillion-dollar business of concert tours.

Gentlemen, thank you so much for being here.

Really appreciate you being here for this conversation.

Brian Shearer, to you first.

You did a report recently where you were looking at the increasing level of cost that has been passed on to consumers.

And in this report, you documented that concert and sporting event prices have risen $11 billion total per year passed on to consumers.

Broadly speaking, how did we get here, where those costs are now dumped on consumers?

Thanks for having me.

So, the $11 billion is a combination of the upcharge that resellers are adding to tickets and also the service charges that platforms like Ticketmaster are adding.

You know, ticket sales went online in probably the 1990s, and since that time, the industry has evolved.

At first, it was just platforms for selling tickets, and resellers were sort of street scalpers that went online.

And that's really evolved in the last 30 years to the point where now we're seeing hedge fund-like companies that are engaging in arbitrage with trading desks and HR departments using technology to purchase tickets and then resell it at a substantial upcharge.

In addition, we have so much concentration in the ticket platform markets.

I mean, Ticketmaster has 80% of all concert ticket contracts that they're able to charge a huge surcharge for every ticket sale.

They charge 20%.

And these are just websites, right?

I mean, websites aren't... I mean, obviously, it's an advanced website.

It's got a lot of ins and outs, but still, it's ultimately just a website, and yet they're charging over $10 billion a year to run it.

Ben, what would you add to this?

I mean, I think for a lot of our audience, including myself, I'm old enough to remember the days when, if you wanted a concert ticket, you went and stood outside the amphitheater with other people in line.

Hopefully, you got a ticket to see that artist you love.

Obviously, that feels like a long, long time ago.

You have covered this industry for decades.

How did we get to where we are today?

It's a pretty long story.

It reminds me of a famous clip of Kurt Cobain from Nirvana who is horrified to learn that Madonna charges $50 for a ticket to one of her concerts.

Brangham: $50.

How could they possibly charge that much money?

That would be an unbelievable bargain today.

I think part of what happened is that around 30 years ago, I don't think there's a way to pinpoint it, but with the rise of the Internet and also some of the disruption that happened in the music industry after Napster, the music industry began to really look at concert tickets and see that this was, to them, an undervalued commodity, that seeing Madonna do a big show at a big venue really is worth more than $50 and people are willing to pay more than $50.

There's been a gradual effort to raise those prices, to persuade the artists to charge more, and to sometimes justify that increased price with things like higher production, that now you may be charging or you may be paying hundreds and hundreds of dollars to see a big show, and so you want to see something impressive.

So that's part of what has happened, that this didn't just sort of occur randomly.

There's been a concerted effort by the concert promoters, the ticketers, the artist managers, to see how can we charge more for our tickets and not catch too much heat for that.

Brangham: Right, exactly.

Brian, this point you were making before, that the elephant in the room in all of this is Live Nation and Ticketmaster, there was just a settlement of a major antitrust case that the federal government had brought alleging that they use their market power in a monopolistic way to the detriment of consumers.

Can you just talk a little bit more about how did it come to be that Ticketmaster, a company like that, owns so much of this commerce?

So it's sometimes called a tying arrangement.

Brangham: Tying, like tying my shoes?

Yeah, like tying your shoes.

So what Live Nation has done is they've tied their ticketing business to their musician promotion business to their venue business, which means that if you're a Live Nation venue, you have to use Ticketmaster.

If you're a Live Nation venue, you have to only show musicians that they promote.

And so they were able to build a huge market share in Ticketmaster off of the ties to its big market share in the venue market.

And so that's how they got what is now a monopoly in the primary ticketing market.

Now, there's still other companies that compete and have a lot of market share in the resale market.

So StubHub, SeatGeek, they still resell a lot of tickets.

But Ticketmaster really has cornered the market for that first sale of a ticket.

Ben, again, for our older audience, and I include myself in this, who think of resale of a ticket as a scalper, as a guy standing outside Madison Square Garden holding up a sign saying, "Two tickets for Bruce Springsteen, "come talk to me."

And you have to haggle with the guy.

That is, again, an artifact of a bygone era.

What are these resellers?

How do they operate in this ecosystem?

Well, first of all, they prefer to call themselves brokers, kind of a PR move.

But as Brian was saying, this is a very big industry, and there are hedge funds and other financial players that capitalize these companies very heavily.

There was just a case recently of a large broker that had a billion dollars to spend buying tickets, and they netted a profit, I think the number was $120 million by reselling.

There was one particular Beyoncé concert where this one broker had about 7000 tickets in the house.

So this is far, far, far beyond the idea of just a scumbag with a trench coat outside of a venue trying to sell you a paper ticket.

These are huge businesses, and it's a very murky world.

The questions about how they get the tickets exactly, how many they have, whether there's any participation in the industry is a big question.

It's been investigated somewhat by law enforcement, but really not that much.

So it's a very opaque world, and really its only purpose, the only thing that they do is find a way to sort of grab the ticket before a fan gets it to them and then charge them more for it.

That's really what it's all about.

Brangham: So they're scooping up available tickets when a concert is announced.

Somehow they are getting in there before all those other people who in the old days would line up but who nowadays would just try, they're a fan, they try to buy it online.

And those resellers, those brokers, scoop up a huge swath of them and then just inflate the price and resell them.

That's the deal.

That's basically the deal.

And they have a bunch of tools to do this, and one are called bots.

They're basically computer programs that go roving around the internet, and they have been trained to look for all the sort of side doors into Ticketmaster to get their hands on those tickets before you do.

This is illegal.

There is a law on the books, a federal law, but it has rarely been enforced.

And it's a huge problem.

Any really high-profile concert, if you're going to try to see Harry Styles, if you're going to try to see Taylor Swift, sometimes Ticketmaster will show you something that they call the queue, where it'll say, "You are number 285,000 in the queue."

So there's 285,000 people ahead of you in line.

But the vast majority of them may be computer bots.

Brangham: Wow.

Shearer: To give you a sense of the scale of this issue, by some measures, something like 70 to 80% of all the tickets that are being resold on the resale market, StubHub, SeatGeek, are owned by these corporate reseller brokers.

So those are artificially... they're not real people who simply bought a ticket and are like, "Oh, I can't go tonight.

"I'm trying to put it on the marketplace."

They're people who intentionally grabbed them in order to just flip them, basically.

Shearer: That's right.

It's a business.

It's not P2P.

It's not person-to-person.

For the most part, those platforms are mostly selling corporate tickets.

Brangham: There was a wonderful singer named Ray who had this similar issue.

She just went to put... she was doing a very small show.

I believe it was in London.

She had 5,000 seats to sell.

And they put it up and they got something like some shockingly high number of quickly people scooping up all these tickets.

And she wrote this, protesting this whole thing.

She wrote, quote, "We received 1.8 million "signups for 5,000 seats.

"Sadly, our signup process was overwhelmed by scalpers "using AI bots to create hundreds of thousands "of fake registrations.

"It is a new world we are living in now," she wrote.

"I have never witnessed bots on this scale.

"It is so important to me that fans can buy tickets "at the face value price."

I understand now what they are, what Ray and her team are trying to do is somehow scrape through that list to find out who the humans are amongst the robots.

And they are, one of my colleagues was looking at some posting that they were apparently going to be asking questions about what do you know about Ray's music or can you name this one song of hers to try to determine if there is a real person behind there.

I mean, this is a dystopian future we have landed ourselves in.

Yeah, I mean, a lot of artists are trying to fight back best they can.

Famously, Billy Joel doesn't sell the front row tickets for his show because they are always picked up by resellers and then sold to very wealthy people or just nobody because sometimes what happens is resellers will purchase tickets for cheap and only sell them for extremely expensive prices and, if no one is going to buy them, then the seats just go empty.

And so Billy Joel doesn't sell the front row tickets of his shows to circumvent this reseller thing.

There are other artists like Noah Kahn who has also been doing a lot to try to push back on resale.

But there's not a lot they can do without a law on the books that prohibits this.

Brangham: Right.

Ben, you wanted to say?

Sisario: Yes.

As Brian was saying, it's mainly big brokers and it's not the peer-to-peer kind of thing.

But the marketing of a lot of these big reselling platforms, especially StubHub, that's been a big part of how they sell themselves is to say this is fan to fan.

Ticketmaster itself has a reselling platform and they also promote it that way.

And it's often marketed as, "Okay, you can't get a babysitter tonight, "you can't go to the show, "sell your ticket to another fan."

But it's been acknowledged and proved many times over the years that the majority of tickets being sold on those platforms are by these high-volume brokers.

And it even goes deeper than that.

Recently, the man who is the founder and CEO of StubHub was revealed that he runs his own ticket buying and scalping operation within StubHub.

It became a really big scandal in the industry that the CEO of the company that's telling people, "This is for fans to sell to other fans" is one of the scalpers.

Brangham: Wow.

He was doing with one hand and then doing the opposite with the other.

So it's a very serious problem.

And for Ticketmaster and for the venues and the artists, it's kind of a cat and mouse game that's been going on for a long time.

But nobody has really figured out how to solve this problem.

And the scalpers and the technology behind the scalpers are pretty ingenious.

I mean, every time they come up with some new way to block them or screen them, they find another way to do it.

A few years ago, the band The Cure toured.

And Robert Smith, the leader of The Cure, was insistent that ticket prices be low.

He was charging as little as $25 for an arena ticket, and he didn't want the tickets to be resold.

So what the scalpers did was they actually had fake Ticketmaster accounts that bought the tickets, and then they sold access to the account to the people who wanted to buy.

Brangham: Wow.

Genius.

Well, criminality is always on the hunt for the latest and greatest.

There's another factor here that I mentioned, which is, Brian, dynamic pricing.

People might have heard about that with regards to grocery prices or even surge pricing with an Uber account or something.

What is dynamic pricing with regards to tickets?

So I think the best example that people are familiar with is airlines, where the ticket will vacillate up and down depending on how close you are to the flight.

And we're seeing that now in concert tickets, too.

The ticket prices will vacillate up and down depending on supply and demand and whether the venue thinks they're going to sell out.

This is kind of a new thing with concerts.

Maybe in the last five, ten years it's been taking off.

And part of the reason that they're doing that is because they've seen with the resale market that effectively the resale market acts that way, where the brokers will increase and decrease the prices depending on how much they think they can get out of customers.

And so the primary market has started doing that, too.

Now, there are a lot of artists who don't want to do this and who don't, who set a firm price and stick to it.

And so it's not everyone who's doing it, but it's definitely growing as a trend.

Brangham: Ben, can I ask you a devil's advocate question here?

If I'm selling a car or a bicycle or my house, I would like the market to reflect the most that people would be willing to pay for that product.

What is the argument against that in this regard?

You mentioned before that $50 for a Madonna show would seem like an absolute steal to anyone, and anyone counseling Madonna nowadays would say, "Madonna, come on, it's got to be $300, $400.

"That's what the market will bear."

Isn't this just the basic laws of economics that supply and demand?

People are willing to pay this.

Ergo, this isn't really a nefarious thing at all.

This is really a key question in all of it is, what is a ticket?

Is it a piece of property like a car or your house that you can sell on an open market and that the market will be transparent and fair enough to find the correct price?

The alternative to that, the counter argument, is that it's not really a piece of property, but it's a license, that the venue is renting you access to the venue, to a seat, to a particular seat for a particular event at a particular time, and you're supposed to follow the rules that they set in doing that.

I think that's the way a lot of the venues and artists wish it were done, but I believe that the law primarily favors the open market model, that it is viewed as a piece of property, and venues sometimes have rules printed on the tickets or on their website, their terms of service, but those generally don't have the force of law.

It's an open question, and this is debated a lot, but I think part of what you're asking there of what will the market bear, how do you find what the market will bear?

For a long time, economists have really liked the secondary ticket market because it appeared transparent.

It appeared to show us in real life and in real time what sellers and buyers... how sellers and buyers can set tickets and arrive at a price, that if they charge too much, they might have to come down, and if they price low and it sells really fast, maybe they need to raise the price.

I think there's a lot of questions about how fairly and transparently the secondary platforms really operate, whether there is manipulation of that supply, but there's a lot of tricks that the sellers use to try to goose that price, to only trickle out a few at a time so that the supply is low.

But the other part of the question is demand.

For a long time, people in the music industry have been looking at this and saying, "How high can we go?

"We charged a lot for our last tour, "and it sold.

"Maybe we can charge more."

And every once in a while, there's a tour that bombs, that an artist goes on sale, and nobody buys the tickets, and it's a flop.

But those are relatively rare, and of the big tours, they're pretty thoroughly vetted about what they think the demand will be, and so far, they sell.

You know, most of the time, when a big tour goes out, they sell, because even if you are not willing to pay that price, somebody else will be.

So I don't think we've reached the ceiling yet.

Wow, Brian, in the last two minutes that we have, can you talk a little bit about what solutions there might be here?

You mentioned the absence of any good governing law on this regard.

What are the things that could protect consumers to keep people from falling victim to this kind of manipulation?

So we could pass laws that prohibit reselling tickets above face value, and we could pass laws to cap the service charges that the ticket platforms charge at a more reasonable price, like 10 percent.

This is a thing that a lot of countries in Europe and Japan have already done.

The U.K.

is considering doing it.

Ontario recently did it.

There's also states in the United States that have done it.

Rhode Island has had this law on the books for a while.

Massachusetts is currently considering one.

D.C.

just passed one very recently.

Brangham: It says that any ticket, so if you bought a ticket through Ticketmaster for Billie Eilish that was $100, you cannot then go and sell that for $300.

That's right.

Some of them allow, like, a 10 percent markup.

Some of them say you have to just, you know, you can resell it, but just at the face value.

The idea being, if you're a real person who buys the ticket and then you can't get a babysitter, you should be able to offload the ticket to someone else, sell it at face value, not make a profit off of it, but at least not lose that money.

But if you prohibit the ability to profit off of it, that would eliminate the business model of the, you know, corporate brokers.

You know, that would do it.

It's something that other countries have already done, so it's not a, you know, an exotic idea.

And so there is a playbook to fix this.

Well, we shall see if any of that actually comes to pass.

But in the meantime, we're just going to have to wade through all of this, the madness that is out there.

Brian Shearer of Vanderbilt University and Ben Sisario of The New York Times, thank you both so much for being here.

Really appreciate it.

Shearer: Thanks for having me.

Sisario: Thanks for having me.

And that is it for this episode of "Horizons."

Thank you so much for watching.

We will see you next week.

Narrator: Support for "Horizons" has been provided by Steve and Marilyn Kerman and the Gordon and Betty Moore Foundation.

Additional support is provided by Friends of the News Hour.

♪ This program was made possible by contributions to your PBS station from viewers like you.

Thank you.

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