Last week, Ticketmaster took some major heat for an unplanned and accidental presale for tickets for Phish’s four performances at Red Rocks this summer. Fans that thought they had stumbled onto a surprise jackpot had their orders canceled and received an email from David Butler, President of Ticketmaster North America, explaining why.

In an exclusive Q&A with Hidden Track, Luke Sacks spoke with Butler, who is responsible for Ticketmaster’s primary ticketing business in the US and Canada, via phone about the cause of the error, how Ticketmaster is working to thwart scalpers, what band he has seen nearly 50 times himself and more.

LUKE SACKS: Let’s start with the incident last week when tickets for the Red Rocks shows went on sale early. Speculation among fans has ranged from a simple computer glitch to Ticketmaster secretly activating that link so scalpers could get in and do their thing. From your perspective, can you walk me through what happened?

DAVID BUTLER: Absolutely. It was fundamentally human error by an employee of Ticketmaster in our Rocky Mountain region. An experienced person, who has been with us for years, accidentally, in releasing the show to be visible on the website that the on-sale was coming, accidentally made it appear to be on sale against the desires of the promoter or the artist. It was really just human error. She was trying to set it up so the show would be apparent with the future on-sale date so the fans would know it was coming. She just goofed.

LS: So that happened, all these orders were filled and eventually the decision was made to cancel these orders. Who made the decision to cancel the orders and subsequently to send out the $50 credit? Were those solely Ticketmaster decisions? Was the band or their management involved?

DB: To be clear, the mistake was totally ours at Ticketmaster and that’s why we sent out the gift certificates. Our policy is, if there is ever an error and the event goes on sale prior to the on-sale date, even if its on our website, that we will invalidate all the orders and if any money is taken we will refund it because we have to protect the integrity of the artist and the promoter that the show goes on sale as announced to the fans. So that’s exactly what we did.

READ ON for more of our exclusive interview with David Butler…

Two other facts just to be clear: We didn’t take any money from any fans. We caught this early enough in the evening that while we might have authorized the card for a fan when they were buying, we never sent the request to the banks for funds. So I held all the orders, we removed those from the settlement process and we are the ones, at Ticketmaster, who came up with the idea to issue a gift certificate for $50 to each of the affected fans along with a letter explaining what happened.

LS: So the band was not involved in those decisions? You made them?

DB: Absolutely. However we were in contact, as you might imagine, with the band’s management and the promoter about the facts of what had occurred and the events. But the error was ours. If anyone is frustrated, as much as nobody wants to be in this situation, I ask that fans shouldn’t be upset with Phish or AEG or Red Rocks. They should realize that we made a human error.

We want all Phish fans to have fair and equal chance to buy the tickets at the announced on-sale date and time, which is set by the promoter and the band. So nobody kept tickets from the accidental availability. We canceled every order on the system. As it turns out there were a little over 1,800 fans that were impacted – about 1,860 or 1,870 total. We are sending out to each of them a $50 gift certificate on our nickel to apologize and we are encouraging them to come this Thursday when the actual on sale will occur. Our policy is to cancel it because we want to do the fair thing for all the fans. It wouldn’t have been fair in this case to let people who stumbled across the mistake keep the tickets. So that’s the reason we took the steps we did. But there is no conspiracy theories and to be clear, there are no links between the Ticketmaster website and any secondary resale environment, like TicketsNow, which we own. There is no link. We in fact barred anyone listing the canceled tickets on TicketsNow because we didn’t want fans to be confused. Unfortunately, I went online and StubHub had tickets for sale for this mistake event a couple of days later. We did notify the band of that.

LS: I’m glad you mentioned TicketsNow. How does TicketsNow get its tickets? Are they just like the rest of the general public where they have employees on the phones and on the internet?

DB: I’m so glad you asked that because it’s the number one misperception about the secondary ticket market. Ticketmaster, for primary tickets, owns zero inventory. We don’t own a single ticket to any Phish concert. We simply provide the mechanism for the band and the venue to sell their tickets to the public. Similarly, we own TicketsNow as you are aware, but we don’t own the tickets on TicketsNow. We simply provide an e-commerce site for buyers and sellers to meet and have a safe transaction between them. The tickets that are listed, typically, for resale on TicketsNow as an example, are owned, some by fans and most by brokers. Brokers get their tickets either by going in the on sale and buying tickets; many times they have season tickets for events so they get them that way. They may have a relationship with a promoter or a band but they don’t get any preferential treatment from Ticketmaster whatsoever.

LS: Does Ticketmaster take proactive efforts to thwart the efforts of scalpers beyond the Captcha software?

DB: Yes. Without giving away any secrets that would make it easier for them, I want you to know that our number one goal is that every ticket ends up in the fans hands. That’s what we try to make happen. So we have a number of layers of technology that we use to identify what appears to be either robotic traffic – if you look at our website you will see that we got an injunction against a company last year because they were selling the software program to brokers to attack our site to try to get tickets. We got the court to block that practice and enjoin the company not to do it anymore. We employ roughly 20 people all day long who are constantly looking at this cat-and-mouse game of automated programs and finding new ways to block or frustrate them.

In a perfect world, we wish every buyer at every on sale were the fan that plans to attend the event. That’s why we released paperless ticketing and if you notice the AC/DC concerts used it and Metallica used it when they played the (London) O2 (Arena) with us. In that scenario, when you buy your ticket, to enter the event you actually use the credit card you used to purchase the ticket to get in. That’s an anti-resale mechanism that our venues and our clients have as an option to make sure the fans are the ones who get the tickets.

LS: Does your battle with scalpers ultimately boil down to technology? You come up with something new and they come up with a way around it and so on?

DB: From a primary sales perspective, we don’t want anyone to get an unfair advantage over anyone else. Having said that, reselling tickets is legal in most of North America with a few exceptions and therefore we own TicketsNow because we know fans want to be able to sell tickets to events they can’t attend. I have season tickets for hockey and I can’t go to every game. There are a lot of fans like that who want the ability to resell their tickets and there are lots of fans who buy at the last minute and want to be able to get great seats and are willing to pay a premium price. I don’t mean to demonize the whole secondary world because I think it provides a valid business service in the marketplace. My point is that in our responsibility as the primary partner helping venues sell tickets for artists, we want to make it that nobody gets an unfair advantage. That’s why we refunded all the (Phish) orders and instead will stick with the scheduled on sale. That’s why we try to block robotic traffic. In both those cases it was an unfair advantage for someone, albeit in the early presale it wasn’t the fans fault, it was our mistake.  We want everything to be fair and transparent so every fan has an equal opportunity to get the tickets.

LS: Your name was on the email that went out to the Phish fans. Have you gotten many responses? If so, have they been along the lines of “thank you for the $50” or more people complaining that $50 doesn’t help them get Phish Red Rocks tickets?

DB: I haven’t had that, in fairness. I have had some that were positive saying this was more than I expected and probably more than you needed to do so thank you. In fact there was a nice article in the Denver Post with a couple of fans quoting that. And I’ve had some fans that were frustrated and said things like, “I’ve been waiting my whole life to get tickets for this” or “I’ve waited 15 years for them to go back to Red Rocks, I can’t believe you are canceling my order” and I have to explain to them that we did it because we were trying to do the fair, right thing for all the fans. I don’t blame a fan for being frustrated; it’s a frustrating situation. I just want them to understand it was an innocent, human error by someone on our staff and we tried to do right by it, and that was canceling it and we tried to do more than just right and that was the purpose of the $50 gift certificate. I ended up paying out almost $100,000 to fans as an apology.

LS: Being a Phish fan myself, I know Phish fans can be rabid when it comes to tickets. Is Phish a unique situation for you? I know there have been problems with Bruce Springsteen and some other artists in the past involving tickets. But do you guys take separate steps or are there certain things you do for artists where the demand is so high versus what you might do for your average hockey or basketball game?

DB: We know the high demand acts based on past history. We work directly with the artists and their agents with our music services group to ensure we give a great experience to the artist on a national level.  There are very few acts that have the passionate following that Phish does. There are some others – Bruce Springsteen is another good example that you raised. Jimmy Buffet is another one that could fall into that group as well.

While I haven’t been to 100 Phish concerts, I think I’ve been to 45 or 50 Jimmy Buffet concerts. So you and I are somewhat comparable there. The reality is that for these really high-demand shows, we make sure the resources are available to have a good, positive selling experience with the fans. But the problem we run into with a venue like Red Rocks, where there are 4,000 seats available to the general public in that on-sale per show, the reality is that they could probably sell 50,000 or 100,000 because the fan base is so large and so committed. This is really an issue of supply and demand and that’s as frustrating as anything to a committed fan. There are so many people that want to attend and only so many seats per venue. If Phish stayed at Red Rocks for three months and played every weekend I bet we’d sell every ticket out. Michael Jackson just went on sale for London at the O2 and we sold out 50 shows in the first three days.

LS: Moving forward, what are some of the steps you have taken or will take to ensure this type of mistake doesn’t happen again?

DB: We have checks and balances for every event set up where an employee and his or her manager independently review all the details of the show and make sure that everything is accurate. In this particular case, that process did not work. We are looking at why that is.

Secondly, we automate the event setup process, as you would imagine, because the artist determines how many seats, what the prices are, when they will go on sale and then we automate that. We are looking at the tools we use to make sure there is a way to take the information we got from the band and check it against the setup to make sure nothing is inaccurate before we publish it.

We constantly are improving those tools, those event-management tools, to make that work better. We do a huge number of events every year and it’s very very very seldom that a mistake like this gets through the system. Nonetheless, it did happen and for the fans impacted, it was 1-1 for them. But for us, we sold over 100 million tickets last year and I can’t remember this happening in this time period. It really was an individual event based on human error yet we are working hard to improve and do a great job as we do 99.9 percent of the time.

Luke Sacks

Luke Sacks listens to mostly Phish, Wilco and Classic Rock but also will throw on Neutral Milk Hotel, Vampire Weekend or TV on the Radio when the mood strikes. He lives in Jersey City with his wife and Norwich Terrier Axl and is anxiously awaiting the arrival of his first child in May, 2012.

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