Ticketing
Two independent music festivals that had hoped to generate approximately $70,000 in revenue by quietly scalping their VIP tickets through the since-shuttered ticketing company Lyte now each face more than $300,000 in losses, court records show.
The festivals are represented in two lawsuits — one filed by organizers of Chicago’s North Coast Music Festival in New York court and the other, Ohio’s Lost Lands Festival in Los Angeles court. The suits provide the first insights into the collapse of Lyte, which suddenly ceased operating earlier this month.
The sudden closure of the company, without any warning to its hundreds of clients, revealed that Lyte CEO Ant Taylor, a Princeton graduate and former media executive, had quietly shifted the business into large-scale ticket scalping in recent years. Lyte was marketed to the public as a fan-to-fan ticket exchange, but documents from recent lawsuits show that Lyte’s main source of revenue came from working directly with promoters to scalp hundreds of thousands of dollars’ worth of VIP tickets for their events to Lyte, which would then resell those tickets at large markups, splitting the upside between the promoter and itself.
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According to one court document, of the 3,064 tickets listed on Lyte for the North Coast Music Festival in Chicago (Aug. 30-Sept. 1) only 89 tickets came from fan listings. Lyte would use those fan listings to drive traffic to an additional 2,975 tickets posted directly on Lyte by the event’s promoters, with a collective face value of approximately $287,750.
Lyte was able to scalp those tickets on its own marketplace and generate $426,912 in revenue — a price lift of nearly 48%, or approximately $139,162 total — which it would then split 50-50 with the promoters. North Coast Music Festival’s cut of the action was to be $69,581, which represents a 24% increase in revenue over their original allocation.
But none of the above mentioned revenue was paid to the dance-centric NCMF festival and the festival was also never paid back for the $287,750 in revenue from tickets it listed on Lyte.
The team behind Lost Lands Music Festival, which takes place each September in Legend Valley, Ohio says its owed $330,000 for the tickets it sold on Lyte, plus the upside it generated from the markups. According to the Lost Land’s lawsuit (filed under its corporate name of APEX Management), Lyte paid APEX a $100,000 advanced fee for using the ticketing platform, which APEX repaid by early September.
Much of Lost Land’s lawsuit is heavily redacted, although the suit does provide some clues about the timeline surrounding Lyte’s collapse.
According to a court filing, APEX’s consultant for Lost Lands, concert giant AEG Presents, had learned that Taylor had resigned as Lyte’s CEO on Sept. 12, and “that Lyte had ceased virtually all of its business operations and laid off virtually all of its employees,” attorney Eric Levinrad writes in a recent court filing.
The lawsuits states that two days later, officials with AEG made contact with Lyte’s CFO Lisa Bashi and learned “she could not commit to the timing of any payment or even that there would be a payment,” for money owed to Lost Lands. “Ms. Bashi further stated that this was an unfortunate scenario, and that defendant was hiring an outside company to help consult on how to wind down operations (Id.), making it clear that Defendant had become insolvent.”
On Sept. 18, an LA Superior Court judge overseeing the Lost Lands case approved the festival organizers’ request for a writ of attachment, allowing organizers to seize Lyte’s property before a judgment is entered, ensuring that Lyte’s assets are available to pay Lost Lands the $330,000 it is owed.
The failed payments come with significant risk for festivals, managing director of APEX Event Management Brett Abel said in a declaration filed in LA court, writing, “APEX will have to urgently find alternative sources of revenue to pay the vendors and artists who will be working at the festival, to make up for its planned share of the secondary market ticket sales,” increasing the risk that APEX would “suffer a loss from the festival rather than break even or to make some profit.”
The Federal Trade Commission is being urged to investigate technology companies that create tools for ticket scalpers that violate existing laws and drive up the price of concert tickets.
The warning and call to action comes by way of a letter signed by National Independent Talent Organizations president Jack Randall and executive director Nathaniel Marro, taking aim at the World Ticket Summit. Held in Nashville earlier this month, the annual conference is organized by the National Association of Ticket Brokers, the country’s largest member organization for professional ticket resellers and individuals who list and resell tickets on sites like StubHub and SeatGeek.
At this year’s summit, members of NITO – which represent independent talent agencies and management companies including Arrival Artists, High Road Touring, Paladin Artists, Q Prime, Red Light Management and TKO – “observed a sold-out exhibition hall filled with vendors selling and marketing products designed to bypass security measures for ticket purchases, in direct violation of the BOTS Act,” a Sept. 9 letter to Federal Trade Commission chair Lina Khan reads.
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That technology includes web browser extensions that set up multiple tabs masking a user’s IP address, proxy services that allow users to be logged in to multiple ticketing accounts from one location and virtual credit card services that bypass geographical restrictions on ticket sales, which are often put in place by event organizers to ensure fair access for local fans.
According to the letter, the use of this type of technology to procure concert tickets is a violation of the Better Online Ticket Sales (BOTS) Act of 2016 which prohibits scalpers from using technology that circumvents “a security measure, access control system, or other technological measure used to enforce ticket purchasing limits for events with over 200 attendees.”
Put more simply, most ticketing companies place a cap on how many tickets a fan can buy for a concert and the use of automated bots, proxy servers, VPNs and phantom credit cards to exceed purchase limits is a violation of the BOTS Act.
“The presence of these vendors at a conference specifically for ticket brokers strongly suggests that a substantial portion of attendees either currently use these services or are likely to do so in the near future,” the letter reads. “This widespread availability and apparent demand for tools that can circumvent ticket purchasing limits indicates that many, if not most, scalpers are operating in violation of the federal BOTS Act.”
The NATB’s executive director Gary Adler issued a lengthy statement in response to NITO’s letter, writing “The vast majority of technology exhibitors at the conference were inventory management systems that help ticket companies organize their tickets, offer them for resale, and help with pricing.”
“There are many friction points in ticketing,” Adler continued “and high-tech ways that players in the system try to monopolize every dollar spent on ticketing and to prevent the resale of tickets. For more than half of events there are lower cost options on the secondary market and some in the primary market don’t like seeing their previously sold tickets being offered for resale at deep discounts. Artists, venues, and primary ticketers abuse technology every day to create fake scarcity and deceive consumers into paying higher prices when really, they are secretly holding back tickets to slowly drip more on sale over time to cheat and fool the fan. This is most likely an illegal deceptive marketing and advertising practice, driven by artists, venues, and primary ticketing companies, that the FTC should immediately investigate.”
Adler notes that the NATB “advocated for the passage of the BOTS Act in 2016 as we fully support the banning of bots. There is no place in the system for illegal bot use. We stand for doing resale the right way and passing strong laws to protect fans and competition across the ticketing industry. If any exhibitors were offering technology that violates the BOTS Act, we want to know as they will not be welcomed back.”
Since its passage in 2017, the BOTs Act has only been enforced one time, in 2021, when three New York-based ticket brokers were charged with violating the law. The government’s enforcement of the BOTS Act has been an “abysmal failure” writes songwriter and music industry analyst Chris Castle, noting that StubHub’s scheduled IPO this fall was a tell-tale sign that the BOTS Act was “under-enforced.”
“Let’s face it – if there were no bots and no boiler room operations, StubHub probably wouldn’t have much of a business,” Castle wrote. Lawmakers including Sen. Marsha Blackburn (R-Tenn.) have introduced legislation like the Mitigating Automated Internet Networks for (MAIN) Event Ticketing Act of 2023 which would force ticketing companies to be more proactive about reporting BOT usage, but those efforts have largely stalled in Congress.
NITO’s letter includes eight recommendations for rights holders and the FTC, calling for the regulator to subpoena the customer lists of “companies offering services that fall into the categories likely to facilitate BOTS Act violations” as well as increased enforcement actions, prioritizing “investigations into large-scale ticket reselling operations, focusing on those using multiple technologies to circumvent purchasing limits.”
By implementing these recommendations, the letter explains, “rights holders and the FTC can take significant steps towards curbing BOTS Act violations and ensuring fairer access to event tickets for consumers.”
Ticketing company Lyte appears to have gone out of business, shutting down its website, laying off its staff and leaving a number of concert promoters unpaid for hundreds of thousands of dollars’ worth of tickets sold on the platform.
Lyte founder and chief executive Ant Taylor has resigned from the company, according to multiple sources, with an emergency board/creditors effort underway to try to identify a potential buyer that could repay the fans and promoters affected by shutdown, which one source said felt akin to being “ghosted.” Currently, the company’s website is offline and has been for days, having been replaced by an image that says “Be Back Soon,” with smaller text reading, “Our website is currently undergoing scheduled maintenance. We should be back shortly.”
Having launched the company in 2014, Taylor raised about $53 million in four major funding rounds, with his biggest investors believed to be Chamath Palihapitiya from Silicon Valley VC Social Capital and New York hedge fund manager Joseph Edelman. Neither Taylor nor representatives for Lyte responded to requests for comment.
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Lyte billed itself as a fan-to-fan ticket exchange where fans could list tickets to events they couldn’t attend and ethically resell those tickets to other fans wanting to attend a concert. But Lyte’s own clients say the company’s business model had changed and that the company helped promoters scalp their high-end tickets and VIP festival tickets — quietly splitting the profits with event organizers.
It wasn’t uncommon for a major indie festival promoter to have several hundred thousand dollars’ worth of ticketing inventory listed on the Lyte system, explained one attorney representing potentially more than a $1 million in cumulative claims against Lyte. High profile clients for Lyte included Baja Beach festival, the Lost Lands festival in Ohio, Pitchfork Music Festival and Newport Folk Festival, although it’s unclear which events are owed money by Lyte.
A worse fate potentially awaits clients who signed up for Lyte’s primary ticketing platform. As recently as Sept. 9 the Lyte blog was announcing new clients for that initiative, including Digilogue Days, an October event in Brooklyn that billed itself as a meeting point for “music executives, artists, creatives, students and aspiring professionals with the tools and knowledge to shape the future of the music industry.” Today, Digilogue Days’ ticketing page has the same “be back soon” message that has come to replace nearly all of Lyte’s known web footprint.
The worst-case scenario for any primary ticketing clients would be if Lyte went out of business without paying its clients any of the revenue from tickets it had sold on their behalf. For small event organizers, that could equal nearly all of an event’s revenue.
If Lyte has to file for insolvency protection, it would fall into the hands of a bankruptcy trustee to sort through the details. But attorneys for several festival clients are hoping to pull their clients’ money out of the venture before it goes into administration.
“It would be totally unacceptable if any of my clients’ money was co-mingled with Lyte’s operational funds,” said one attorney who did not wish to speak on the record. “If that happened, the board of directors will be forced to account for those funds, even if that means piercing the corporate veil and going after their ability to raise money.”
Scalpers hoping to earn a big payout flipping Chappell Roan tickets likely just watched their profits vanish after the singer announced she was shutting down resellers charging outrageous markups for her Oct. 1 show in Franklin, Tenn.
The news was greeted with praise by fans who have watched the “Good Luck, Babe!” singer’s star rise to new heights this summer — as well as by questions from ticket buyers wondering how the singer was able to call a mulligan on tickets she’d already sold to ensure actual fans get to attend her show instead.
The answer isn’t totally clear — Roan’s reps did not respond to Billboard‘s requests for comment — but there’s enough information already available about the Franklin show to tell part of the story. It’s also worth noting that Roan isn’t the first artist to deal with scalpers trying to mark up fan-friendly $30 lawn tickets to as high as $900; in years past, major artists like Ed Sheeran and Eric Church, among others, have utilized the same strategy. And while not a perfect system, it’s still an impactful way to ensure that more fans have access to affordable tickets.
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In many ways, for a breakthrough artist like Roan, there are worse problems to have. Over the last year, thanks to the success of her 2023 album The Rise and Fall of a Midwest Princess, her work as a supporting act on Olivia Rodrigo‘s Guts World Tour and her breakout performances this summer at Lollapalooza and Coachella, Roan, as some say in music business parlance, is the blowing the f— up. Now, as with any big star, scalpers are taking advantage.
In one less extensive example of this, tickets for Roan’s Oct. 2 show at Walmart Amphitheatre near Rogers, Ark., were originally priced between $30 and $80 when they went on sale in June. Now, they’re selling for $300 to $1,200 on StubHub and other secondary sites — though in that case, only a couple dozen tickets, out of 11,000 total capacity, appear to be listed on StubHub.
But in Franklin, there were dozens, maybe hundreds, more resale tickets on sale for the show at the 7,500-capacity FirstBank Amphitheater. Located just 20 miles south of Nashville, Franklin is a much bigger music market than Rogers, and the price gouging for tickets apparently prompted someone from her team to work with reps from Ticketmaster to find out who is scalping those tickets and take them away from those responsible.
Catching scalpers on Ticketmaster, especially after a sale has been made, isn’t particularly complicated. While there are laws governing ticket ownership and rights, in most cases ticketing companies treat tickets like revocable licenses, meaning they have the right to disable tickets that a fan purchased and refund them their money if they are caught violating Ticketmaster’s terms of service.
For example, many scalpers will try to buy up as many tickets as possible using multiple credit cards. That’s a violation of Ticketmaster’s “limit per order” policy, which limits the number of tickets that can be purchased per order based on the event and demand for tickets.
Ticketmaster prohibits users from using multiple IP addresses or email addresses when buying tickets, so if someone successfully completed a purchase of a Chappell Roan ticket but was later found to have used multiple email addresses or a VPN to hide their IP addresses, that could be grounds for their tickets to be canceled and refunded. It wouldn’t take long for a couple of Ticketmaster executives to comb through the transactions for a 15,000-capacity show and find purchases tied to bots with no IP addresses, or large purchases from newly-created accounts linked to free email services.
Once those transactions are identified, most are investigated and the purchases canceled. In Roan’s case, the canceled tickets were pooled and sold via lottery to fans who had to register in advance for a shot at buying them. Though it’s unclear how many tickets were canceled and reissued to fans, it’s unlikely that more than a few hundred tickets were involved.
While this practice is popular with fans and punishes amateur scalpers, there is an argument to be made that, in some cases, it enriches professional scalpers who are better at avoiding detection by reducing the number of tickets available on resale sites and in turn driving up the price for those tickets that aren’t taken down.
But the effort isn’t specifically aimed at eliminating all ticket scalping. Instead, it’s about randomly disrupting the predatory practices of scalpers targeting vulnerable shows by rising artists like Roan who don’t want to charge fans hundreds of dollars to see their concerts. And by focusing on high-margin shows where scalpers are set to make big paydays, artists like Roan really can impact the pocketbooks of professional ticket resellers and help keep more of their tickets affordable for fans.
Sturgill Simpson is keeping it simple for his Why Not? Tour this fall.
The country artist announced on his website in July that although he and his team were “doing everything in our power to keep tickets in the hands of fans and out of the hands of scalpers,” they were opting out of using dynamic pricing for the 37-date run.
Although dynamic pricing is one of the concert business’ most effective tools for keeping tickets off the secondary market, it’s also a major factor in the sharp rise of ticket prices, and Simpson was taking his fans’ wallets into account.
For years, promoters put tickets on sale at a handful of price points, then watched them sell out and get listed with huge markups on the secondary market — revenue that would not accrue to them.
Since then, scalpers have hacked most efforts to foil them, including one of the strategies Simpson is employing: vetting presale buyers. The only proven deterrent has been dynamic pricing: charging what the market will bear during the initial on-sale in hopes of curbing secondary markups.
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In the early days of the music industry’s post-pandemic return to live shows, when pent-up demand led to robust sales, dynamic pricing became the go-to strategy for major acts. The move helped lead to a 30% rise in ticket prices from 2019 to 2024, however, according to Billboard Boxscore, with the average ticket price of a top 40-grossing tour jumping $111 to $144 at midyear 2024 — 6.6% in the past six months.
With the pandemic in the rearview mirror, many in the industry express concern about the sustainability of this upswing. In recent weeks, The Black Keys, Jennifer Lopez and other high-profile artists have canceled tours due to backlash over ticket prices. (The Black Keys fired their management in the aftermath.)
According to Billboard Boxscore, only a handful of acts can charge more than $200 a ticket and sell out, and yet more artists are pushing the boundaries on ticket price and quickly approaching average ticket prices between $150 to $200, getting very close to the ceiling of what fans can or will pay.
“Patronage is up — we are seeing more fans come out to shows, but our costs are eating into the increase in volume,” said Morgan Margolin, CEO of Knitting Factory Entertainment, who says agents and managers are charging 30% to 40% more for acts than they did prior to the pandemic.
“It’s getting more difficult to do business in the major markets, especially with minimum wage increases, insurance, rent, and other costs,” he added. “If artists and managers and agents keep escalating on top of those fees, where is the tipping point?”
The Black Keys successfully played U.S. arenas in the past but only a handful. Most of their dates were either festival slots or amphitheater and theater shows. In 2019, they grossed $28 million on their co-headlining Let’s Rock run with Modest Mouse. Tickets for that tour started at $36.50, with four price points under $100. For the band’s canceled International Players Tour, some tickets were priced at $59.75 and $89.75 but others were listed for $119.75, $159.75 and $199.75. In comparison, the bulk of Simpson’s tickets are selling in the $53 to $72 range.
Pricing tickets based on how much scalpers might profit is difficult and risky. If they are overpriced and the tour flops on the initial on-sale, it’s almost impossible to save. Reducing the price can alienate fans who paid the full cost. Stay the course, and if the tour is deemed a loser, fans will avoid it.
“I think a lot of these artists are getting bad advice and not thinking through the long-term consequences of chasing big bucks,” one arena booking executive says. “And that’s going to hurt them in the long run.”
A version of this story will appear in the Aug. 31, 2024 issue of Billboard.
TickPick has raised $250 million from Brighton Park Capital and golfer Rory McIlroy’s investment partnership Symphony Ventures, it was announced Thursday (Aug. 22). TickPick was founded in 2011 by co-CEOs Brett Goldberg and Chris O’Brien as an independent ticketing marketplace. Since launching, TickPick has been downloaded 14 million times and transacted more than $1 billion […]
As the nation focuses on Tim Walz, the newly named vice presidential running mate of Democratic presidential nominee Kamala Harris, a look into his record as Minnesota’s governor reveals that he recently signed a bill designed to protect concertgoers from junk fees and fraud. This past May, Walz signed a bill that increased transparency for […]
VAI Resort, metro Phoenix’s new $1 billion hotel, culinary and live entertainment destination opening later this year, has partnered with Tixr, the privately-held primary ticketing and live event company. Tixr will exclusively ticket events and experiences for the property’s amphitheater, poolside area and nightclub.
The $50 million, 11,000-capacity VAI Amphitheater in Glendale anchors the 60-acre property with 1,100 guest rooms offering a number of views of the concert venue. From hotel room balconies, to sky boxes, VIP booths and high-end reserved seats, the property offers a number of unique vantage points to see performances. The property will also feature a dayclub, as well as regular programming at its nightclub, with Tixr powering all live event commerce.
“Everything we’re building at VAI Resort, from the property itself to the guest experience, is unique, bigger, bolder, and first-of-its-kind. That ethos is reflected in the technology partners we’ve chosen like Tixr and the innovative feature set they bring to the table,” said Howard Weiss, VAI Resort’s senior v.p. of Entertainment & Sponsorships. “After a long vetting process, there’s no question that Tixr was the right choice for us,” Weiss added, noting, “it’s a true partnership, and every day we’re reminded of why we chose them.”
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“VAI Resort is not just a world-class destination; it’s unlike anything you’ve ever experienced. With its diverse venues and experiences on property, each with their own tech needs, VAI is the forward-thinking kind of partner Tixr is uniquely suited for,” said Robert Davari, co-founder and CEO of Tixr. “We can power sales for the entire resort, from complex reserved seating to bottle service, hotel packages—virtually anything—which hasn’t been possible before on a single system. And we do it in an visual, elegant way that feels nothing like traditional ticketing. We’re working closely with the VAI team to bring their vision to life and can’t wait to get operational.”
Tixr powers more than 500 live entertainment brands in 40 countries. The Los Angeles-based company said that since its inception, it has processed nearly $2 billion in transactions through its unified commerce platform, designed for sales beyond admission tickets.
The beach-style resort is located near State Farm Stadium — home of the NFL’s Arizona Cardinals — and a soon-to-be completed theme park from Mattel — VAI is set to open in 2025. In February, hotel officials announced they had inked a partnership with Live Nation and C3 Presents to book the amphitheater.
Ticketmaster announced Wednesday (July 24) that the company is expanding its presence in Africa with the acquisition of Quicket, described in a press release as “a major player in Africa’s general admission event and festival ticketing.” Quicket, which was founded in South Africa in 2011, is known for its self-service platform and event organizer […]
Pressure on Congress is heating up to pass legislation that will clean up the live events ticketing business following May’s passage of the Transparency In Charges for Key Events Ticketing (TICKET) Act in the House of Representatives.
The Fix the Tix Coalition, led by the National Independent Venue Association (NIVA), is calling for a nationwide day of action Tuesday (July 9) to encourage music fans, professionals and supporters to lobby their congressional representatives to pass meaningful legislation that will curb the growing problem of ticketing scams and deceptive practices in the live music business.
NIVA and other members of the Fix the Tix coalition, which also includes the Recording Academy and the National Independent Talent Organization, are backing their own legislation — the Senate’s Fans First Act, supported by U.S. Senators John Cornyn (R-Texas), Amy Klobuchar (D-Minn.) and Marsha Blackburn (R-Tenn.) — while also supporting passage of the TICKET Act, which is sponsored by Cathy McMorris Rodgers (R-Wash.), Gus Bilirakis (R-Fla) and Frank Pallone, Jr. (D-N.J.), among others.
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Both bills would ban the use of speculative ticket listings on sites like StubHub and SeatGeek, require all-in-pricing before checkout and crack down on the use of deceptive websites and URLs. The Fans First Act would also require resellers to disclose seat locations on their resale listings, ban scalpers from using fan clubs to buy up some concert tickets and include greater consumer protections for canceled events.
Fix The Tix officials are asking fans, artists, and members of the music and performance communities to reach out to Congress on Tuesday to demand action by the end of 2024.
The U.S. House of Representatives passed the TICKET Act in a 388-24 vote on May 15. The bill is currently before the Senate Committee on Commerce, Science, and Transportation.
A case study conducted by Fix The Tix across five independent venues in the Washington, D.C., area shows that in 2024, 73,000 speculative tickets totaling an estimated $49 million have been listed on resale platforms. Speculative tickets are tickets that aren’t actually available for purchase but are sold to consumers at a considerable markup by sellers who promise to procure and deliver the tickets prior to the concert. These listings can often be misleading and lead to fraud.
“The Fix the Tix Day of Action is an important moment for all of us who believe in fair and transparent ticketing,” said Stephen Parker, executive director of NIVA, in a press release. “It’s a time to elevate the voices of fans and artists and harness their power as constituents. This is more than a one-day campaign. It’s a collective cry to protect the integrity of live performance. We urge Congress to listen to the voices of fans and artists and put comprehensive ticketing reform on their list of must-pass legislation in 2024, alongside other critical legislation such as FY 2025 Appropriations and the Farm Bill.”
Information on how to contact senators, members of Congress and the White House for tomorrow’s day of action can be found at fixthetix.org.