Digital Domain: Hannah Montana Tickets On Sale! Oops, They?re Gone

HANNAH MONTANA has made 2007 a very bright year for various business interests, but especially for StubHub, the online ticket exchange site.

Hannah Montana fans during a preconcert party in Los Angeles. The tour has been a major moneymaker for the online ticket exchange StubHub.

Though the year is not yet complete, StubHub announced on Dec. 5 that its concert ticket sales had already passed $100 million, a record for this seven-year-old company now owned by eBay. The standout performer has been Hannah Montana, the stage persona of the 15-year-old singer-actress Miley Cyrus, whose “Best of Both Worlds Tour” has brought in $10 million of StubHub’s sales this year, the most for a single act in the company’s history.

It is rather mystifying how ticket brokers, who are well represented among sellers on StubHub and other online ticket exchanges, have been so successful in snagging Hannah Montana tickets in plentiful quantities.

Ticket sales for big-name concerts now follow a distressingly consistent pattern: At 10 a.m. on a Saturday, tickets go on sale, and by 10:05 a.m., all tickets are sold. Yet by 10:05, StubHub and other ticket exchanges already have a plenitude of tickets listed for the sold-out event — only now, they cost much more.

Montana tickets, whose face value is $21 to $66, have been resold on StubHub, on average, for $258, the company says, and that is without taking into account StubHub’s 25 percent commission (10 percent paid by the buyer, 15 percent by the seller). None of the proceeds from the resale of tickets at inflated prices make their way back to Ms. Cyrus.

Some ticket brokers are so certain of their ability to get hold of desirable tickets that they confidently advertise tickets on these exchanges even before tickets go on sale to the public.

How do they do it? An intriguing explanation is that brokers use specialized software to make multiple online purchases of tickets, circumventing the four-ticket-per-customer limit that the rest of us must abide by.

How brokers can jump to the front of the line is described in supplemental documents filed in Ticketmaster v. RMG Technologies, an active Federal District Court case asserting that the defendant’s automated ticket-buying software violated the Ticketmaster Web site’s terms of use. The papers describe a subterranean world of software designed to enter Ticketmaster’s online ticket-purchasing system at will and to scoop up tickets without limits.

The lawsuit was filed in April, after Ticketmaster had tired of what its spokesman, Joseph M. Freeman, called a “cat-and-mouse game” between Ticketmaster’s security systems and automated ticket-purchasing robots, or “bots.”

“We began detecting an increase in attempted online purchases by automated programs about two years ago,” Mr. Freeman said, adding that the company thinks RMG is not the only maker of this type of software.

Kevin McLain, Ticketmaster’s senior director of applications support, estimates that on some days, 80 percent of all ticket requests that arrive at its Web site are generated by bots.

The company looked for purchase anomalies and found four individual brokers who had bought a total of 115,000 tickets online. One of the four, Chris Kovach, agreed to cooperate and led investigators to RMG and its Web site, ticketbrokertools.com, which was open only to its clients. Mr. Kovach also agreed to permit security specialists to make a copy of his PC’s hard drive.

Ticketmaster said it had found evidence that RMG clients, with the help of RMG’s “PurchaseMaster” and related software, submitted millions of automated ticket requests, in Mr. McClain’s estimation. The RMG software disguised the clients’ Internet addresses to create the appearance that their ticket requests had originated in many different places, Mr. McClain said.

The judge, Audrey B. Collins of Federal District Court in Los Angeles, noted that RMG’s own Web site advertised that its broker customers merely had to type in the desired event, then “the moment the event goes on sale, PurchaseMaster goes into action.”

The court found Ticketmaster’s evidence solid and in October imposed a preliminary injunction that forbade RMG from using software to circumvent Ticketmaster’s protections and to buy tickets for the purpose of reselling them. The case is scheduled to go to trial in October 2008.

Cipriano Garibay, president of RMG Technologies, spoke with me last week about the case. He said Ticketmaster, the court and even RMG’s own customers, like Mr. Kovach, did not understand how low-tech his company’s service is — or at least one component. RMG answered Ticketmaster’s Captchas — the visual puzzles of distorted letters that a customer must type before buying tickets— not with character recognition software, he said, but with humans: “We pay guys in India $2 an hour to type the answers.”

Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com.

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