Protection product safety insurance and Data Security subcommittee will come to order. Were pleased to have our witnesses here on a topic that i think is of value and has some opportunity for us to make a difference. Whether its garth brooks concert at wichita, a ku basketball game in lawrence or the mosthyped and prestigious broadway show of all time hamilton, the digital age made acquiring tickets easier than ever, but an ageold issue of ticket scalping has been made more prevalent by advances in technology. When youre trying to pick up tickets for the next big event, youre no longer competing against other eager fans, youre now forced to compete against an army of sophisticated ticket bots that overwhelm the website with brute force, scoop up as many tickets as possible and resell them on a secondary market at a significant markup. So whats a ticket bot . Heres my quick example. Live performance is happening. Garth brooks concert in wichita. You know lots of people who want to be there and theres only so many tickets that are available. People who use bots first overwhelm the primary ticket issuers website by cutting in line, ahead of regular fans. While those tickets are taken out of circulation, they quickly use human operators to enter distinct names, credit cards, addresses and circuit vent other security measures. Software is easy to find and you dont have to be a Technology Genius to use it. I dont want to direct anyone to a website but a Google Search for ticket bots will lead you to a different kind of marketplace, one where you can purchase the software were talking about today. The bots are advertised as specific applications for websites such as ticket master or stub hub and they offer to make custom products. Bots harms everyone in the Live Entertainment ecosystem from performers to fans, ticket issuers like ticket fly have to invest heavily in server capacity and extra security measures to deal with the artificially generated stress that the bots produce. And when the site doesnt seem to work properly or the event is listed as sold out, seconds after the tickets go on sale, consumers get frustrated with the ticket issuer or the venue. The secondary market is also impacted, ebay, stub hub supports bots legislation and believe that misuse of ticket bots harms all parts of the ticket industry. Of course, its perhaps the biggest impact is on the fans. Report by the attorney general suggests tens of thousands of tickets per year are being acquired using ticket bots. I believe a vibrant secondary ticket marketing place is nothing but good for consumers. People can and should be able to sell their tickets in the marketplace, and if people are willing to pay extra for certain performances, thats their right. Stub hub estimates that half the tickets sold on their platform are below face value, so the value prospect cuts both ways for consumers. Way take issue with and what this legislation that i and others have introduced seeks to address is the practice of cutting in line. When tickets are offered so that regular consumers dont even have a chance to pay face value for the tickets. Some have raised ticketing concerns outside the scope of this legislation. We do not claim that this legislation will be a Silver Bullet for all that ails us or can solve every Consumer Problem but i look forward to a robust discussion today about many of these proposals. Many groups, including stub hub have advocated additional provisions they believe would be beneficial to consumers. Our legislation has been narrowly tailored to address a significant problem and has bicam ral support. This committee will consider bots at its next markup, and i believe thats next week. I would encourage all my colleagues to coresponder and support this bill. Id like to specifically thank my commerce colleague for their interest in support of this issue, Ranking Member blumenthal, thank you for advancing the legislation putting together todays hearing, senator fischer, and im sorry the big 12 trumped the big ten once again in our testifying witnesses today. Yesterday the house of representatives passed on suspension a very similar version of the bots act. Id like to thank congresswoman blackburn for her work on this issue and look forward to continuing to work with her to make this bill law. I would electric nice the Ranking Member senator blumenthal for his Opening Statement. Thank you. Thanks, mr. Chairman, for your leadership in bringing us together today for this hearing, and to you and our other colleagues for supporting the better Online Ticket sales act of 2016, a good step, if only a modest step toward stopping ticket scalping in this country. In one of my favorite shows of all time, hamilton and in one of my favorite numbers in that show, one of the showstopping songs is the room where it happens. The room where it happened. Thats all fans want to do, be in the room where it happens and what this bill does is give them fair access to be in that room. It may be a sports stadium or a music venue or a show like hamilton, anybody who says that these are victimless abuses is kidding themselves. This kind of abuse affects boys and girls who want to celebrate birthdays and who are denied that opportunity at the show that they have waited an eternity, it may seem to them, to see. It affects the music fans who want to go to the concert that they cannot access. It affects the sports fans who cant see their teams in victory or defeat. I spent many years as attorney general the state of connecticut fighting to protect consumers from ticket scalpers making unseamly profits from scrupulous practices. It is not a victimless abuse. It is not a victimless crime. It affects ordinary americans in their pocketbooks, in their hopes and aspirations, and it affects respect for the rule of law and fairness in our society and appreciation of the great cultural richness of this nation. My former colleague as attorney general or one who followed as attorney general after i left, attorney general Eric Schneiderman has done an investigation and produced a report back in january. I ask mr. Chairman that his prepared statement be submitted for the record. If there is no objection, so ordered. Showing that Tickets Remain even more out of reach for consumers than ever before. And much of this denial of access is due to the illegal use of special software known as ticket bots, that consume he literally devour the best tickets at high speeds the moment they go on sale or before, and make it impossible for ordinary consumers to purchase tickets at reasonable prices. The use of this technology basically deprives consumers of fair markets. If you believe in the markets, you should believe in this legislation. If you believe in fairness in the market, you should support this legislation. Whether its a mega hit like hamilton or the Football Games that occur regularly in this country over the weekends coming this fall or the concerts that occur around the country regularly. The current epidemic of ticket bot software is blocking fair access to events tickets, and it is maddening and frustrating to consumers no matter where they live or what their background, age, class, race may be. It affects everyone. I believe that the current state of affairs is untenable and unacceptable. And thats why im very strongly in favor of this first step. And i heard from some of our Community Performing Arts in connecticut, like the bushnell theater in hartford and gene oneil theater in waterford about how this practice makes their serving subscribers more difficult and they are hampered building relationships with future patrons of the arts. The Ripple Effect is beyond broadway. It is in every community theater, every Community Around the country, and i want to thank the witnesses for being here today and contributing to our understanding of this issue. Thank you very much, mr. Chairman. Senator blumer all this, thank you very much. We are honored to have the Ranking Member of the full committee, senator nelson. Anything would you like to say as we begin this hearing. Thank you, mr. Chairman. Just to say to my colleague here, i did not get to go see hamilton ill go a second time if youll go with me. Not at a price. The reason i didnt go, i did not want to pay 800 a ticket. At the time that i tried, indeed, all the tickets had been bought up, just about what weve been talking about. Now, you put it in everyday folks lives. The retirees who want to go to mark their anniversary at the theater. Or you talk about the folks who want to get a ticket for their child on their birthday to go see their favorite singer. Or what about the College Football fans that want to go to the ballgames and they are denied because of what we see going on. And this is not capitalism. This is not the free market. This is a rigged market benefitting some greedy speculators. And its not right, and i appreciate what you all are doing. Thank you. Well, mr. Ranking member, in just a moment im going to introduce you to the producer of hamilton and perhaps you two can get acquainted today and perhaps you can see the show. Mr. Chairman, can i request for the record senator blumenthal does his Opening Statement but sings in the room when it happens . I would greatly appreciate that. I hear objection. Again, we are delighted to have our Committee Members here, but especially appreciative of those who have come to testify on this topic. We have with us today, mr. Todd cohen who is the General Council of stub hub. We have mr. Jeremy legal, the associated General Council for pandora ticket fly. Mr. Jeffrey seller, the producer of hamilton, an american musical and mr. Bob bolsby, commissioner of the big 12 conference. We will start with you and work our way across the panel. Welcome. Thank you, chairman moran, Ranking Member blumenthal, senator nelson. I appreciate the opportunity to be here and thank all the distinguished members for taking the time to hear from the witnesses. This is a terrific opportunity to talk about a vexing situation that brings all of us with relatively diverse backgrounds together to talk about a common challenge. Ill let the first three paragraphs of my statement stand for themselves, but i think its selfevident that some of our sports produce revenue from tickets from merchandise licensing and from television contracts. This revenue is vital to the operation of intercollegiate athletic programs, particularly at the highest level where we operate in a fairly autonomous manner and mostly through a selffunded resources. There is a unique relationship between an institution and its fans. It is not uncommon for our programs to have families that have been season Ticket Holders across multiple generations. Because of these special relationships, we try and keep the value and cost of College Tickets at a reasonable level. Because of the reasonable level of this pricing, we make ourselves an obvious target on some cases. This is particularly true of big regular season contests and football and mens basketball, as well as many of our postseason games, for which there are already a very limited number of tickets. Im convinced for certain games we could charge a whole lot more than we do, yet our traditional relationships and our loyalty to our fans presents a maximum pricing when we know that the supply is fixed. The demand to see live events may overwhelm the supply in virtually every one of our environments. A school could substantially raise ticket prices for that one big game or for a group of big games, could also bundle tickets together so that less advantageous contests are bundled up with very highly advantageous activities. Where individuals are willing to pay more than the stated face value, some actors will exploit that situation. While many of the ticket store athletic events are held by Ticket Holders, individual game tickets are also sold. I fully support a free market and the ability of individual ticket owner to profit from the sale of Market Forces and their tickets. However, with respect to many gam games scalp ers will use to pick up and buy more tickets than individuals are allowed to buy on an individual basis. Whether its an individual lerking outside of the perimeter or a Computer Operator unleasing them, the bottom line is this, the hard earned money on the fans spent on tickets to the sporting events should benefit the schools and the athletes and not third party that want to make a quick buck off the passionate supporters. We have the best fan in the country and the bad actors that use it to create and buy up unnecessarily markets are essentially cutting in line of the real fans in order to profit off something that they did nothing to create. I am aware of the questions if theres anything that congress can or should do about this situation. There are 21st century scalp ers that are going to find a way to do whatever they can to gain the system. Well, i disagreech. This is a logical step and i allow them to take Civil Enforcement actions on individuals that employee deceptive paractice to support and challenge the integrity of online purchasing in volume. We insure that the university fans have access to good tickets at face value. My professional career has been spent around students, fans and College Sports as an Athletic Director and commissioner of a high sport. We would encourage on the field between student athletes and coaches and the teams. We should denounce forced competition on internet ticket sites between fans and faceless scalp ers that want to thank you for the opportunity to testify, and i look forward to questions. I want everyone to treat you respectfully, and we may hit the questions. Its ku we wont treat respectfully. I have noticed that. Lets turn to mr. Seller. Thank you for being here and congratulations on being the producer of a show that can make political figures interesting and entertaining to the general public. We would be delighted to learn from you. Thank you chairman. I have to tell you that being in your presence and being in the presence of the senator blooming dale and senator nelson and booker, i am honored to be in this room where it happens today to watch and participate in the democratic process. Yes, sir i am the proud producer of hamilton. In way of introduction, my career is defined by my passion the muz cal i produced rent and the 2009 revival of the tony awards. I started go attend broadway shows in my hometown of michigan in 1978. I was 13 years old. My family was lower middle class and my father was a process server and my mother a clerk at a local drugstore. We had little money available for entertainment, my passion motivated my parents to scrap together whatever funds they could so i could see the shows. Seats were 10, and we could not afford seats for the entire family. My father and i went to musicals and when annie came to town in 1979, we all wanted to go, so my father stood in line for four hours at the fischer theater so that we could get tickets and have that gift for the holidays for the entire family. I would not be sitting here today if it were not for my parents to give me the unforgettable and that i was able to have seeing them of my childhood. My reason for being here today and my mission is to insure that young people and in fact people of all ages senator nelson for example have the same opportunity to see Live Performances of whatever interest them musical, plays or in fact big 12 or big ten conference sporting events. I have received numerous letters from children and parents appealing to me to help them get tickets to hamilton and they have simply been able to obtain tickets because every time that we put a new block of tingts on sale, the blocks or robots have invaded the ticket master system the seconds that theyre on sale and purchased almost all of the available inventory. Then they have reposted the tickets on multiple secondary sites at prices that are up to ten times their face value. Hamilton tickets have ragly been sold in access of 1,000. These cut the lines and buy up the available product before anyone has a chance. You might ask why should i care. I have succeeded in my goal and thats to sell out all of my tickets. Some ways they were created by al asander hamilton took care of the rest, right . Wrong. Bots are cheaters and the people that employee them use software that cuts the line and paralyzes the system and holds and purchases the cheats and they remove the level playing feelgd from the system that was designed to make it easy for the consumers to buy the tickets no matter where they live. The secondary market was introduced into show business in the United States around 1850 and the politically offensive name scalping came from the notion of those reselling tickets and were taking the skin off the back of the general public. I am not here to make any recommendations regarding the function of the secondary market and many instances its a useful tool for buyer and seller and those i must confess that i am a graduate of a big 10 school and the university of michigan, i will confess that maybe once or twice i took the tickets and resold them at the michigan yuan john so that i could buy a pizza after wards. I am here to argue for fairness and the ability of consumers to have a fair shot at purchasing the tickets at the price set by the producer of the event. And for theater, i acknowledge that tickets are expensive and sometimes so and we at hamilton have put in place powerful tools to make Tickets Available to all. First the Ground BreakingEducational Initiative and supported by the rock Fella Foundation will make 20,000 Tickets Available each year to