At the first ever XLIVE Data and Analytics conference in Los Angeles, Program Director Max Rollinger sat down with Ticketmaster’s Chief Digital Officer and EVP of Data Science and Engineering John Carnahan for a fireside chat on the way the ticketing giant is using data to get more tickets into the hands of actual fans. Carnahan, who has been working for the company since 2012, said he was given one directive when he got the newly-created position: “When I came, it was the head of Live Nation saying, ‘Fix the god damn onsales. Just fix them.'”

In his chat with Rollinger, Carnahan discussed the various ways he has been handling that directive for the past five years, including the current triumphs like Verified Fan, and the pitfalls like captchas.

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“It’s a very inefficient marketplace. Billions of dollars in margin that just sits out there,” Carnahan said. “You have to ask yourself why this exists. You look at things like the airline industry. They toggle prices and change prices in order to meet the demand. We don’t do that in the live event industry. I think a lot of people are realizing that they’ve left a lot of money on the table.”

The reason, he and most people in the industry realize, is the artist and fan relationship. Emerging artists, even the most popular, are attempting to build a fanbase and expensive tickets can be a barrier because they prevent fan engagement. As a result, ticket prices are kept well below what they could be sold for.

“If you look at the Eagles, they can charge $400 a ticket because they already have their fanbase. It’s a static fanbase. Other bands are thinking they have to grow their audience, get the younger people in and get the demographic that I’m shooting for to get that longevity,” Carnahan said. “So they choose to keep their prices low, but that’s only if those tickets go to their fans. It’s going to brokers that are putting it on the secondary market.”

He went on to explain how it is a losing situation for everyone except the scalpers. The fans are upset because they either couldn’t get tickets or paid exorbitant amounts. Artists are upset because they are underselling themselves for fans who don’t even get the tickets. And venues are upset because empty seats cost them money.

“Those front seats should be buying a ton of stuff, but it turns out they don’t get sold on the secondary market,” Carnahan said. “Turns out they don’t get sold because a broker goes out and purchases 20 tickets and sells them for 10 times the value. If only a handful of those get purchased , they’ve made all their money back. They’re done. They’re just going to let them sit out there at that price and hope for the best that they get sold.”

Carnahan went on to discuss how legislation is being passed to prevent the use of bots from gobbling up tickets, but they are only part of the problem.

“There is a separation between bad actors and bots, and I like to make that separation,” he said. “While it is the case that anyone who uses a bot is a bad actor, there are bad actors that don’t use bots. With that much money at stake, if we have a system that just identifies whether or not you’re using software to purchase tickets, that’s not enough. You just have to hire a mechanical, Turk-style army to go and buy tickets and train them and give them the tools to do it so they still look like people.”

Another issue he identified with bots was reserve abuse. While some bots go into onsales to purchase tickets, there is other software designed to reserve as many seats as possible, which can end up holding scores of tickets for hours. Scalpers will hold the tickets, place them on the secondary market, and only purchase them from Ticketmaster if they get a nibble on the secondary. This results in fans being pushed to the secondary market while very few tickets get sold through Ticketmaster.

“When I first started, our in-cart conversion (when an in-cart ticket gets sold) was less than one percent,” Carnahan said. “We’ve been able to increase that to 20 to 30 percent for high-demand shows. The goal is about 50 percent since people get available tickets and they aren’t what they wanted, so they let them go.”

Having the person who actually purchased the tickets from Ticketmaster show up for an event has many benefits for the industry beyond fan satisfaction. In addition to having an accurate manifest, that data that gets lost on the secondary market holds a lot of value for everyone involved. The ticketing giant is in the process of overlapping key features to get the most fans into their preferred seats, cut out the middle man and keep the profits with those who put it back into the music industry.

First of all, Carnahan was pleased to announce that Ticketmaster has scrapped the use of captchas and pivoted into expanding the use of fan scoring with programs like Verified Fan and Presence.

“Instead of trying to block the bad actors, it’s making it so that the fans have a bigger advantage,” Carnahan explained. “It’s a combination of machine learning, engineering, working with artists. The idea is it’s all about presales.”

If an artist is interested in using Verified Fan, Ticketmaster will create a registration page for fans to sign up for a special presale.

“People will come in and register. They will give their first name, last name, email, Facebook ID.” he said, joking, “They’ll write a ten-page essay, provide DNA. They’ll do anything to give themselves an edge in getting tickets for what they are a fan of.”

“We take that information and behind-the-scenes we run our machine learning which scores those users,” he said. “It tells us the likelihood that the person is going to attend that show. We’re taking all the data that we have of which (concerts) this person attended and which ones they didn’t.”

Based on their fan score, people will get a code that they can then use for a specific presale which prevents them from fighting with bots to get good seats.

“The response is fantastic,” Carnahan said. “Which makes people actually like Ticketmaster. A big goal of mine is to get people to actually like Ticketmaster again or ever.”

The fan scoring is also being used for other features. For instance, if a show is sold out, potential ticket buyers are prompted to fill out a form that will notify them if and when tickets are dropped for whatever reason. According to their fan score that predicts the likelihood of them attending the event, they will be sent a text message that informs them that there are available tickets.

“We will make a reserve for you before that ticket even shows up on the site and based on the constraints you had, these tickets look good for you and we will purchase them for you with your credit card on file if you respond with a yes,” he said.

To ensure the best possible fan score, Ticketmaster is also unveiling a new product called Presence. Events that use this product will make it a requirement for every ticket purchased to have the holder’s name. So if someone buys tickets for their family, every ticket will have to bear the attendee’s name and can be transferred via the Ticketmaster app or a team’s app. The path of identity can be fully tracked this way. It could also mean that if a friend purchases a ticket for you, then transfers it to your Ticketmaster account, your attendance still benefits your fan score.

Carnahan ended the chat by expressing that”in a lot of ways we are eliminating the worst part of a live event experience which is buying a ticket. The association is between the artist and the fan and we’re just trying to make that happen. The more that we can step out of that, the more that we can just link up the fan and the artist together.”

End of an Era Big