Ed Sheeran has a carrot and stick approach to the secondary market.
The carrot is Ticketmaster's new Verified Fan program, requiring concert-goers to register in advance to purchase tickets for his upcoming Divide World Tour. The stick came in the form of 50,000 ticket cancelations aimed at scalpers, whose seats were revoked and then resold to fans who had already verified their identity with Ticketmaster.
"The Verified Fan program gives us some great tools to figure out who is a real fan, and who isn't," Ticketmaster's President of North America Jared Smith tells Billboard. "It changes the equation and puts new assets at our disposal to identify fans."
Smith explains that Verified Fan works because it slows transactions down and allows the company to scrub its list of bot and scalper purchases. Prior to Ed Sheeran's fan presale, an email was sent to fans encouraging them to register to purchase tickets in advance. Fans were required to provide Ticketmaster with an email address and a phone number, and then that contact data was scrubbed against a database of known resellers and accounts tied to scalpers.
The coordinated effort between Ticketmaster and the Messina Touring Group, which is promoting the Sheeran run, resulted in the sale of 350,000 tickets to verified fans.
The process takes about 48 hours and "gives us time to identify bots and be more thorough in how we identify fans," Smith says. "It's very difficult to do that during an onsale, which feels more like a race against the bots" as thousands of fans and scalpers try to log in at once to purchase tickets.
Once the list had been scrubbed, fans were sent a text message with a unique code to purchase tickets during the exclusive presale period. The presale tickets sold out immediately and, despite the scrubbed lists, thousands were immediately posted on secondary sites like StubHub.
"We had tons of inventory, but it couldn't meet the demands of the number of verified fans we had," MTG's Senior Touring Manager Haley McCollister tells Billboard. "That's when the postings on StubHub started happening. As soon as inventory is not available, the demand just goes up."
McCollister said she didn't believe the postings were coming from verified fans, but from "the same brokers who were speculating and realizing how hot the show was and increasing their pricing."
The verified fan presale took place on Monday (March 13) and by Friday (March 17), the remainder of the tickets went on sale to the general public. Those tickets also quickly sold out and McCollister and the MTG team spent the weekend poring over ticket sales reports trying to figure out how many tickets ended up in the hands of brokers. Just as country singer Eric Church had done a month prior through his management firm Q Prime South (MTG also promoted that tour), Sheeran's team examined sales reports for suspicious purchases and out of state buyers, looking for tickets they believed had been bought by scalpers.
"We ended up canceling over 50,000 tickets," she says, "Which is very disheartening. It's frustrating to see the real fans compete against so many bots and brokers, and that's why we want to do what we can to make sure we're giving them the opportunity to buy tickets."
The 50,000 canceled tickets were then offered back to fans who had previously registered for the verification program, and McCollister said those tickets have also been resold.
StubHub spokesperson tells Billboard his company is "aware of the cancelations and have taken proactive steps to ensure that fans that buy Ed Sheeran tickets on StubHub have a seamless, frictionless experience seeing his show."
While Sheeran's proactive stance on the secondary will help some fans, it will ultimately drive up the price of tickets for those who were unable to purchase tickets early, explained Patrick Ryan with Eventellect, a ticket pricing and distribution company.
"In some cases letting the market do what the market is going to do is in the fan's best interest," he tells Billboard. By trying to control how much inventory flows onto the secondary market, Sheeran's team is creating conditions where "the supply dries up, there's no liquidity and prices rise to five times their original price. Sure, more fans got tickets at face value, but less were able to buy tickets on the secondary market at a reasonable price."