Ticketmaster’s revolving barcode technology, which has led to the rise of “untransferable tickets,” was primarily introduced to gain market share over competitors like StubHub and SeatGeek and to learn more about who its customers were bringing to concerts, the federal government’s antitrust lawsuit against the company alleges.
Monday, The Verge reported that an amended version of the federal government’s complaint explains the effect that “SafeTix” has had on the ticket resale market. As I’ve reported previously, SafeTix is a technology in which the ticket barcode changes every 15 seconds that was ostensibly created to prevent fraud, but has had the knock-on effect of allowing Ticketmaster to control how and if a ticket can be resold or transferred to another person.
“Ticketmaster’s rapid increase in secondary market share coincided with its launch of SafeTix technology in or about 2019,” the DOJ’s lawsuit notes. “SafeTix technology requires that all transfers occur within the Ticketmaster platform. This technology makes it harder for fans to use rivals’ secondary ticketing platforms to resell tickets, pushing them instead to the Ticketmaster resale platform.”
SafeTix makes reselling most tickets harder, but not impossible. Ticketmaster allows some SafeTix to be resold on third-party platforms like StubHub and SeatGeek, but it is easier and more seamless to do so on Ticketmaster’s own resale platform. For certain events, resale is fully restricted to Ticketmaster’s own site and the company has also begun making some tickets fully “untransferable,” meaning they cannot be sold to another person. My previous reporting has shown that sophisticated ticket brokers have figured out how to resell these untransferable tickets anyway by reverse engineering the way that Ticketmaster generates them. But this is a janky solution, and one that has gotten the companies that offer this service sued by AXS, a smaller Ticketmaster competitor.
Jason Koebler
The inclusion of SafeTix in the DOJ lawsuit is particularly notable because ticket brokers I’ve spoken to have pointed to the technology as an obvious example of Ticketmaster’s power. Ticketmaster not only collects fees when it sells a ticket to a fan, but it can also restrict resale to its own platform, and collect fees from both the buyer and the seller of the ticket when that ticket is resold, effectively allowing the company to charge fees on the same ticket multiple times to multiple parties.
“The transfer restrictions implemented as part of this change also make it more difficult for a fan who wishes to buy or sell a SafeTix-encrypted ticket through a secondary platform to use a rival platform like StubHub or SeatGeek. Further, SafeTix introduces uncertainty as to when, or even whether, that ticket can even be transferred,” the DOJ lawsuit alleges. “SafeTix has also fortified Live Nation’s data advantages over its rivals. According to internal documents, SafeTix was expected to grow the ‘size/value of the TM database,’ already by far the largest of any ticketer, by as much as 30 to 40%. As Live Nation’s CEO put it, ‘one of the advantages we’ve launched under the transfer strategy is we now not only know the person that bought the ticket, but we’re going to know those three people that you are taking to the show, which we have not known historically.’”
Conduition, a pseudonymous security researcher who reverse engineered SafeTix earlier this year, hammered this point home to me when I asked them about the technology.
“Ticketmaster and AXS have had every opportunity to support scam-free third party ticket resale and delivery platforms if they wished: By documenting their ticket QR code cryptography, and by exposing apps and APIs which would allow verification and rotation of ticket secrets,” Conduition told me last month. “They're opting to play legal whack-a-mole with scammers instead of fixing the problem directly with better technology, because they make more money as a resale monopoly than as an open and secure ecosystem.”
In their blog post explaining how SafeTix works, Conduition wrote that SafeTix also “pushes users to install Ticketmaster’s proprietary closed-source app, which gives Ticketmaster more insight into their users’ devices and behavior. People can’t save and transfer tickets outside of Ticketmaster. This forces ticketholders to surrender their friends’ contact information to Ticketmaster, who can use this data to build social graphs, or conduct other privacy-invasive practices.”
