Fans hold signs while attempting to sell extra tickets for a Bruce Springsteen concert in New Jersey in 2003 (Photo: Mario Tama/Getty Images)
Fans hold signs while attempting to sell extra tickets for a Bruce Springsteen concert in New Jersey in 2003 (Photo: Mario Tama/Getty Images)

BusinessApril 1, 2019

How a new ticketing platform is taking on the scalpers

Fans hold signs while attempting to sell extra tickets for a Bruce Springsteen concert in New Jersey in 2003 (Photo: Mario Tama/Getty Images)
Fans hold signs while attempting to sell extra tickets for a Bruce Springsteen concert in New Jersey in 2003 (Photo: Mario Tama/Getty Images)

A ticket retailer and a tech startup are joining forces to try and solve some of the industry’s biggest problems. Jihee Junn talks to the co-founders of iTICKET and Passphere on why they’re merging, what they hope to achieve with their new platform, and what they think about websites like Viagogo.

Last month, pre-sales for Metallica’s long-awaited Auckland gig finally went live. Within minutes, the outrage started flowing in, with a litany of complaints from fans: not being able to add tickets to their cart, being served error messages during purchasing, and valid credit cards failing to be accepted. Similarly, in October, Eminem fans also found themselves scrambling, with some buyers reporting online delays of up to half an hour.

The problems, of course, don’t stop there. When the day finally arrives and you’re waiting to get into the event, you might be met with more delays, like the dozens of cricket fans that were left stranded after a ‘technical issue’, or the hundreds of festival-goers forced to wait for over an hour in the searing heat due to a scanning issue at 2018’s Laneway.

Worse still, you might not even get in at all, like the 200 that were turned away at Six60’s Dunedin gig because their tickets turned out to be fake.

The ticketing industry, for all its advances, is plagued with headline-grabbing issues. It’s an industry languishing in legacy technology, and while efforts to improve have been made in the broader tech sphere (US startups like SeatGeek, Project Admission and Rival, for example), few advancements have been made on the local level, hence why iTICKET and Passphere’s merger seems notable.

Six60 perform on stage at Western Springs Stadium on February 23 in Auckland. At their Dunedin show, hundreds were turned away due to fraudulent tickets. (Photo: Dave Simpson/WireImage)

While it’s comparably smaller than its foreign competitors Ticketmaster and Ticketek, many will still be familiar with iTICKET, the Auckland-based online ticket retailer founded by Phil Jobbins and Reece Preston back in 2004. Far fewer, however, will be familiar with Passphere, a ticketing management and analytics platform founded by 24-year-old entrepreneur Ezel Kokcu. She started the business back in 2017, building it off the back of her two previous startups: Non-Stop Tix, another ticketing platform, and STQRY, an app that allows users to discover museums and events in their area. Now, the two have decided to join forces to create what they hope to be “the most powerful ticketing system” in New Zealand.

“Powers combined, this is what’s going to make the change… Ticketing is part of an experience. It should be really easy, really quick, and really straightforward,” says Preston. “We’ve heard all sorts of things in the news of people waiting in online queues for big concerts and when they think they’re going to get their ticket, all of a sudden they’re sold out. Then there’s the whole scalping issue [and] a lot of what’s going on right now isn’t proper.”

While several new features will focus on improving the ticketing experience for promoters behind the scenes (eg: customisable APIs, more customer data on demographics), on a consumer level, the new platform will also attempt to address concerns like scalping and ticket scams, particularly in light of the government’s decision to crack down on the practice. These measures are set to include a price cap on resale tickets, enforcing rules around information that need to be disclosed to consumers, and banning ticket-buying ‘bots’.

But legislation alone can only do so much, with established anti-scalping laws in the US proving to have little impact on the secondary ticket market. It’s why relevant businesses need to step up and also play their part in making the most of the tech out there.

“Scalping is the issue. Bots grabbing however many tickets and then selling them for three times the price is the issue,” says Preston. “The issue isn’t your average Joe buying a ticket and genuinely not being able to go because something’s happened. We want to help legitimate cases like that, so having an Airbnb-style flexible refund policy is an option [so that] if you book a ticket and you got it wrong, you can press the refund button within 24 hours.”

“We also want to create a safe place where people can resell tickets,” adds Kokcu. “The government [suggested that you can only resell] 10% more than a ticket’s face value, which is something we can control and manage in the backend. We can validate it, and if we see a ticket that’s come through our engine two or three times, we’ll know that’s not OK.”

The government announced in March that it would be cracking down on scalpers (Photo by Mark Tantrum/Getty Images)

Both Kokcu and Preston say they support a ban on third-party resale platforms like Viagogo, which they say are “doing it wrong”. Since 2017, the Commerce Commission has received more than 400 complaints about Viagogo over allegedly over-priced or invalid tickets. The ComCom recently took the company to the High Court, a move that’s been knocked back by a legal technicality around it being based in Switzerland.

“They’re selling illegitimate tickets and it’s hurting people,” says Preston. “People go onto Google, they search for a ticket, and they think [Viagogo] is the best place to buy… They’ve got a big marketing budget which is why they’re in the top Google results all the time.

“[But now] it’s going to the top (the government, the PM), which is what’s required. The courts are struggling to enforce the rules and the Commerce Commission can’t seem to quite get there. The government’s saying all the right things [but] I guess it’s a bit like whack-a-mole: you get one and then they pop up somewhere else.”

In response to this, a Viagogo spokesperson states that “all tickets on Viagogo are valid and it is perfectly legal to resell a ticket or give it to someone else if you want to… Viagogo is a marketplace and doesn’t buy or sell tickets. Viagogo does not set ticket prices, sellers set their own prices, which may be above or below the original face value. Where demand is high and tickets are limited, prices increase.”

In its statement, Viagogo also encouraged primary ticket sellers like iTICKET and Ticketmaster to use “far more stringent security and fraud prevention tools to stop credit card fraud” from occurring. It did not, however, comment over allegations of invalid tickets.

The Commerce Commission alleged in February that Viagogo sold nearly 1000 invalid All Blacks tickets (Photo by Phil Walter/Getty Images)

When it comes to the issue of bots, Kokcu says there’ll be improvements made to the server in the backend to help with the detection of them. There’ll also be the addition of more simple features, like limiting the number of tickets you can buy at one time (although purchasing limits are already enforced for many high-demand events).

The pair say there are also plans to make the ticket-buying experience more streamlined for customers. For example, if there’s a group of friends planning to attend an event, it’s often the case that one person is in charge of buying all the tickets. With the new platform, each ticket will be named and sent to individual attendees.

“You won’t have to print it out or physically give it to anyone,” says Preston. “You can use your mobile app, use the ticket with your name on it, and you won’t get confused about using the wrong ticket.”

Preston adds that having a feature that enables people to pay back their primary purchaser more easily is also being considered. “While I might pay for it, for you to accept the ticket you need to put in your payment details, which refunds me that portion. So it gets rid of a lot of that manual process that people do anyway (ie: bank transfers) and makes it part of the platform… [often] the person who bought the ticket ends up having to chase up their friends to pay them back.”

Passphere’s Ezel Kokcu (left) and iTICKET’s Reece Preston (Photo: Supplied)

As of yet, there’s no launch date for the platform, and with everything still under wraps, it remains to be seen whether iTICKET/Passphere will manage to deliver on its promises. In the meantime, it’s likely that scalpers will get smarter, bots will get better, and resellers like Viagogo will win at the end of the day. There’ll always be people trying to exploit the system, but “if we could all take on our responsibilities and say: ‘As a technology provider we’ll do this, as a promoter we’ll do this, and as the government we’ll do this’, hopefully, that trio will address the majority of issues that are happening at the moment,” says Kokcu.

“That’s a legacy I hope we leave behind as a company because ultimately it’s families, students and millennials getting ripped off. No one deserves to get turned away after they’ve paid $300 for a ticket because they just really want to see their favourite artist.

“It’s an atrocity what’s happening because it’s killing the events sector and the arts and culture sector. It doesn’t cut it altogether but it does address it head-on.”

* The following article has been amended to include comment from Viagogo

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