Miley Cyrus fights scalpers with paperless tickets

Sun Jun 21, 2009 1:26am EDT

U.S. actress Miley Cyrus arrives for the German film premiere 'Hannah Montana-The Movie' in Munich April 25, 2009. REUTERS/Michaela Rehle

U.S. actress Miley Cyrus arrives for the German film premiere 'Hannah Montana-The Movie' in Munich April 25, 2009.

Credit: Reuters/Michaela Rehle

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NASHVILLE (Billboard) - As Miley Cyrus prepares to hit the road this fall, the spotlight is shining on what was once a relatively minor piece of the touring puzzle: the ticket.

Or in this case, the lack thereof. Cyrus' tour will use paperless tickets, and that's causing a commotion, mostly among the scalpers who infamously made so much money from her last tour.

The 2007-08 Hannah Montana/Miley Cyrus Best of Both Worlds trek grossed $55 million and sold about 1 million tickets to 70 shows reported to Billboard Boxscore. But it also provided outraged parents with a bitter introduction to secondary vendors, who scooped up tickets and sold them at huge markups. The resulting controversy made Cyrus the poster child for what many perceived as an out-of-control resale market.

Now Cyrus' fall tour will make history as the first arena-level trek to embrace paperless ticketing in an attempt to thwart resellers. As is the case with airlines, those who purchase the tickets must be on hand with their credit card to gain admission.

"The focus was, 'How do we take all the information we gathered last time out and do a better job of it?'" says Jason Morey, Cyrus' manager and president of Morey Management Group, an affiliate of Ticketmaster Entertainment's Front Line Management. "It was important to us to address the issue of demand. We thought that of every single option that was available out there, this was a really viable option, to go with the paperless ticketing."

Those associated with the tour say public feedback has been generally favorable and that tickets are selling well, with nearly 500,000 purchased already. The fact that they're not blowing out immediately as they did on the last tour is evidence that brokers aren't flooding the system, they say.

Meanwhile, secondary market players are crying foul, protesting that they're being shut out from buying Cyrus tickets, or at least hindered, and predicting entrance chaos, and a consumer backlash, at concerts.

Sean Pate, director of communications at the secondary market leader StubHub, says the number of tickets sold by resellers during the 2007-08 tour has been overstated. "There was a lot of misperception that brokers had gobbled all the available inventory and posted it on StubHub or anywhere else," he says. "The reality was that StubHub sold roughly 5%-6% (of seats) at any one of the venues she played in terms of the total seats in the arena."

Don Vaccaro, CEO of the secondary ticket aggregator Ticket Network, wonders aloud whether paperless ticketing might violate antitrust laws.

"Ticketmaster's actions are trying to restrain the secondary market from dealing in Miley Cyrus tickets and restraining consumers from being able to sell their rights to admission to that venue," Vaccaro says.

Morey disagrees. "Scalping is a really important issue to Miley," he says, "but really the focus is about giving the regular fan an opportunity to buy a really good ticket at face value."

Cyrus is not the first major touring act to turn to paperless ticketing. For AC/DC's North American tour last year, some 3,000-4,000 tickets per show were paperless. At a Metallica show in September at the O2 arena in London, all tickets were paperless. Both operations went smoothly, according to Ticketmaster chief technology officer Brian Pike.

"Most of the lines ran at roughly the same speed as a normal night," Pike says. "When people come with four tickets, it's actually sometimes faster than scanning four different pieces of paper. We think this technology has been well-tested and is ready for this challenge."

Chuck LaVallee, director of music relations for StubHub, begs to differ. "On AC/DC they were swiping cards and shoving fans through," he says. "If they didn't have time to check IDs on 3,000 tickets, they're not going to have time to check them on 18,000. I think the whole thing's a mess."

A PERFECT TEST CASE

In many ways a Cyrus tour is the perfect test market for paperless ticketing. Not many 11-year-old girls have credit cards, but their parents do, and many of them will surely be on hand for the shows. "Not many parents would send a 10-year-old to Staples Center (in Los Angeles) and drop them off for a concert," AEG Live president Randy Phillips says.

The Cyrus tour was sold in three stages: a Miley World fan club presale Monday, an American Express presale Wednesday and the general public on-sale Saturday. Prices range from $39.50 to $79.50, with I Love All Access (a division of Front Line) premium seats in the first 25 rows with perks like merchandise and services selling for about $295.

"Nobody cares about (the add-ons), they just want their tickets in the first 25 rows," LaVallee says.

Forty-five shows put on sale have sold slightly fewer than 500,000 tickets. "This is what on-sales used to look like before brokers got into our business," says Debra Rathwell, senior VP at AEG Live, which is promoting the tour. "Now you're dealing with the public, the public has their own time that they go about doing things, and I think we're off to a fantastic start."

The fact that tickets didn't blow out is a sign that brokers aren't flooding the system, Rathwell adds. "I can tell you last time brokers went in with their machines and it was ugly," she says. "That had to be shut down and stopped this year. The good news is the best tickets in all of these venues are in the hands of the public."

But LaVallee thinks the fact that the tour didn't sell out immediately means one of two things. "Either Miley Cyrus is not as hot as they thought she was," he says, "or the fans have spoken and they don't like paperless."

StubHub isn't carrying any Cyrus tickets for "philosophical" reasons," LaVallee says.

"Our company prides itself on being able to fulfill any ticket we sell, and we guarantee our client base that they will always get what they want," he says. "We couldn't guarantee (that to) our customers and Miley Cyrus fans who chose to buy tickets on our site. I do believe, had the paperless tickets been transferable, we would have done a healthy business on it."

RESELLERS STILL ACTIVE

Rathwell acknowledges that paperless ticketing hasn't completely shut down resellers, who can buy more than one ticket and then accompany their buyers to a venue. "I saw some of their postings," she says. "$2,600? Get a life. I don't think the big companies have postings, but you're always going to drag around the dregs."

LaVallee argues that paperless ticketing hasn't prevented brokers from buying up the same number of tickets as they normally would.

"The only thing this is going to do is shore up the local broker, take the business right back into the dark alleys, increase the amount of fraud," he says. "Joe Blow Broker in St. Louis doesn't have a 'fan protect.'"

And how would this Joe Blow Broker get his paperless tickets? "They're buying a crappy seat in the upper bowl and then some good seats below to walk people in," LaVallee says, adding that the potential for fraudulent tickets increases "exponentially" without a company like StubHub involved.

Fans who want to avoid fraud should go to Ticketmaster or the primary ticketer if it's not a Ticketmaster building, Morey says. "We've made this the most safe experience for a consumer to go to Ticketmaster, buy a face-value ticket and not deal with the chance that you go to a secondary site and either buy a fake ticket or meet somebody in a parking lot," he says.

In terms of pulling this off, it certainly can't hurt that the management company and ticketing company in question share an owner.

"There's definitely synergy," Morey says. "Ticketmaster wants to please us just like they want to please their other clients. This isn't something Ticketmaster tried to shove down my throat, this is something that I requested. They've literally moved mountains to try to make this right for this tour."

(Editing by Dean Gooodman at Reuters)

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