We have turn around 180 Degree
Ken Lowson is setting the groundwork for his triumphant return.
The one-time scalper and inventor of ticket bots is returning to the live entertainment industry six years after he was arrested by the FBI and eventually released on a no-jail plea deal. He’s officially out of the bot game and returning to ticketing, hoping his past experience at Wiseguys Tickets puts him in a unique position to tackle the problems of the ticketing world with his new company TIXFAN.
Lowson is the inventor of much-maligned “ticket bots,” a type of software that allowed him and other scalpers to buy up big chunks of tickets and resell them at a markup on sites like StubHub. In 2010 his Los Angeles office was raided by the FBI and he and two others at the company were arrested. Instead of a lengthy prison stint, Lowson and partners Kristofer Kirsch and Joel Stevenson pled guilty to one count of conspiracy to commit wire fraud, which he said was a result of a payment to a Russian programmer.
Bots are now illegal, outlawed when former President Barack Obama signed the Better Online Ticket Sales Act. They weren’t illegal, however, when Lowson and his team were using them to buy up over one million tickets and generate a profit of $25 million. Lowson contends he never did anything illegal — he never hacked into a ticketing site or used stolen credit cards. He received legal help from the Electronic Frontier Foundation, the Center for Democracy and Technology and other online advocacy groups who argued that Lowson may have violated a ticketing company’s terms of service, but he didn’t break the law.
Instead, he studied the ticketing websites compulsively, installed super high-speed internet lines to improve latency, used computer systems from all over the world to boost propagation and had programmers write scripts that automated orders, quickly filled in CAPTCHA and bought up hundreds of the best tickets in seconds.
Technically he didn’t even scalp the tickets — his business was wholesaling tickets to scalpers. His clients would give them their credit cards, and he would use them to buy on their behalf and charge them a fee.
Preparing for his comeback
TIXFAN can be broken down into three buckets — ticket profit, fan credibility and seller leverage on behalf on the team and the fan. TIXFAN is focusing on helping teams sell directly and find new ways to exercise leverage, using presales to market directly to fans and groups who want to go to your shows. TIXFAN operates more like a consultancy or ticket marketer earning 7 percent on the transaction.
With help of TIXFAN you’re going to see the rise of the fan scalper. If you are making $50,000 a year and you have two tickets that are worth your next paycheck, who do you think the next scalper is?