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The Funny Side of Identity Verification

July 31, 2019

Hello OWI Readers, it’s Simeon here! If you are anything like me and are a big fan of Dave Chappelle, then it was a very exciting summer. Earlier this month, the famed comedian wrapped up his Broadway debut. Unfortunately, I didn’t attend. I was, however, very excited during the hour I waited online to purchase tickets before seeing the prices and immediately closing my browser.

What you might not know about Dave Chappelle is that, despite being an award-winning artist and stand-up performer, he has a reputation for experimenting with his audience’s experience. He is known for making unannounced appearances and implementing strict no recording measures during his performances. In 2017, he was an early adopter of the Yondr bags, a tech-enabled phone case that prevents the use of recording sets, texting, and other disrupting activities. At the end of the show, the Yondr bags are electronically opened as audience members exit the venue. 

In his latest effort, he is working with TicketMaster to use enhanced identity verification and authentication solutions to offer real fans affordable tickets. Hopefully, Chappelle’s efforts can illuminate the power of identity solutions and how they can help solve fundamental problems of the digital economy, even for comedy shows.

 

The Verified Fan Program 

Starting last year, Chappelle started to use TicketMaster’s Verified Fan program for some of his more limited tour date shows.

The Verified Fan program debuted in 2017 with the intention of cutting out resellers and reward fans and giving priority access to Verified Fans before tickets are available to the general public. To enroll, users need to submit their email address, and they are sent a One Time Password (OTP) which they are prompted to enter into the TicketMaster website. After the connection is made, they are considered a “Verified Fan.”

When an event using the Verified Fan program goes live, the platform randomly selects people from the Verified Fans base and texts them another OTP for them to be eligible for the purchase. According to David Marcus, an executive vice president and head of music at Ticketmaster, the platform is intended to be a “behavior predictor” that identifies real fans who are genuinely interested in attending the event and have a low chance to resell the ticket. 

The platform tracks information like whether a user regularly attends comedy shows or whether they have attended have Dave Chappelle events before. These questions are taken into consideration to eliminate resellers and scalpers from the ecosystem and provide more opportunities for legitimate fans to attend the event.

 

The Secondary Ticket Market 

TicketMaster’s program is an attempt to address the frustration concertgoers have expressed with the price inflation driven by the secondary ticket market (STM). The STM is the process of buying tickets at their “true market value.” Resellers wait for the event to sell out and capitalize on the supply shortage to resell the tickets at a more expensive price. The primary market of ticket sales is worth an estimated U.S. $30 billion globally and the secondary market is valued at an estimated US $8 billion. Critics of this fairly large industry note that excessive price gouging is an exclusive practice that prevents fans who can’t afford a $200 ticket from attending an event.

At the onset, it is astonishing this practice survived the “disintermediation revolution” of the past decade where companies like Airbnb, Casper, Harry’s, and Uber are cutting costs by connecting users directly with suppliers. The STM, however, continues to persist for several reasons: 

  • Casual fans leverage it as an insurance practice when they can no longer attend an event they had booked for some time; 
  • Job creation for the selling and procurement of tickets; and 
  • The STM offers the primary ticket platforms, such as Ticketmaster, an opportunity to offload the risk of having to sell the tickets upfront to another group. In fact,  Live Nation, the parent company of TicketMaster, recently came out publicly confirming they have placed thousands of tickets directly on the secondary market after the artists request, confirming suspicions fans have had for years. 

 

The Digital Identity Opportunity 

Either way, there is no denying the rising popularity of the ticketing industry. The demand for programs that are aimed at cutting out the prevalence of the secondary ticket market, like Verified Fan, are growing rapidly from concert-goers and event enthusiast. And on the supply side, we believe Dave Chappelle’s use of Verified Fan should be viewed as a trailblazer for more robust identity verification and authentication practices to come to satisfy the concerns of their fans.

The ticketing industry by its nature is rooted in digital identity, where platforms are trying to foster a genuine connection between artists and their fans. As such, there are ample opportunities for digital identity companies to provide value to address challenges associated with secure identity verification, authentication, and to help mitigate fraud and risk. Behavioral biometric companies and cybersecurity firms can assist ticketing platforms with bot detection and risk threats. Identity proofing and verification business can provide value in establishing a trusted connection between platforms and their customers. 

For more information on these opportunities, the ticketing industry, or digital identity solutions, feel free to reach out to the OWI!