Cash or Trade Reimagines the Secondary Ticket Market | Business | Seven Days | Vermont's Independent Voice

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Cash or Trade Reimagines the Secondary Ticket Market


Published April 5, 2017 at 10:00 a.m.
Updated April 6, 2021 at 2:18 p.m.

Dusty (left) and Brando Rich - MATTHEW THORSEN
  • Matthew Thorsen
  • Dusty (left) and Brando Rich

Just how unscrupulous is the online secondary ticket market? If recent history is any indication, it's reached biblical proportions.

In 2015, Pope Francis visited New York City and held a procession through Central Park on his way to leading a mass at Madison Square Garden. Forty thousand free tickets were issued for the event. Ticket bots snatched up thousands of them. Employed by scalpers, bots are high-speed software programs that cut ahead of average fans in virtual queues and buy huge numbers of tickets, thus creating artificial scarcity — and, by extension, drastically inflated prices. In some cases, even when the tickets were free in the first place.

Within minutes of being made available, tickets to see the Pope were being hawked on Craigslist and other websites for upwards of $3,000 per pair. Quick math reveals that the markup to see the Holy Father was roughly infinity.

Over the past decade or so, if you've tried to score tickets to, say, a Beyoncé concert, the Broadway smash hit Hamilton: An American Musical or a Boston Red Sox game, you've likely encountered some version of the Pope scenario and been forced to buy through online secondary ticket marketplaces such as StubHub or SeatGeek. Particularly for major events, paying into the legal scalping racket has simply become part of the bloated cost of doing business for consumers. Is there a purer, more ironic violation of a fan's soul than hitting the "submit" button when completing a purchase for tickets at two, five or 10 times their face value?

Brando and Dusty Rich don't think so. The brothers are the founders and owners of Cash or Trade, an online marketplace based in Burlington that allows users to buy, sell or trade concert tickets at — wait for it — face value. Hence the company's tagline: "embrace the face."

Equal parts eBay, Craigslist and Phantasy Tour, the website does a brisk business by merging the enthusiasm and connectedness of fan communities — in particular, the jam scene — with a promise from all parties to abide by the Golden Rule. Following several years of consistent growth, culminating in 41,000 tickets exchanged in the last year, the Rich brothers have their sights set on a David-versus-Goliath challenge: revolutionizing the estimated $5-billion-per-year secondary ticket market in the U.S.

"We want to be the Airbnb of the ticket market," says Brando Rich, 38.

The idea for Cash or Trade wasn't quite a religious epiphany, though it was born of exploitation similar to the scalpers gouging Catholics in NYC.

In 2009, Vermont jam icons Phish played a run of reunion shows in Hampton, Va., following a five-year hiatus. Unsurprisingly, tickets for the shows sold out almost instantly, freezing out thousands of fans, including the Rich brothers.

Veterans of some 250 Phish shows, they turned to the secondary market. And they were discouraged, bordering on offended, to find tickets going for far higher than face value.

"They were literally $2,000 a piece," recalls Brando Rich, from Cash or Trade's cramped third-floor office on Church Street. He sports a trucker cap and a dark, bushy beard flecked with gray — the familiar uniform of the grown-up Green Mountain Phish-head. "We were floored, having been such longtime fans," he continues. "So we thought, Something needs to change."

"We recognized what secondary ticketing sites lacked: transparency," says Dusty Rich, 40. The elder Rich is clean-cut and speaks fluent business-ese. Next to him on the wall is a small, framed print featuring the furry TV alien ALF with the caption: "Cash 4 yer extra."

"They were all about profiteering. And there was no feel of community," Dusty says. "So we thought that if we could combine the aspects of some of the greatest websites — the social aspect of Facebook, the chronological listings of Craigslist and the review aspect of eBay — along with a social mission, we could build a platform for people to plug in and exchange tickets for face value."

As have so many cottage industries surrounding the Phab Four, a band that pays tribute to the Beatles, Cash or Trade grew out of the concert parking-lot scene. After putting out feelers to friends about the idea of a fair-trade ticket-exchange business and launching a bare-bones website, the Rich brothers hit the road and began setting up shop outside of Phish shows.

Cash or Trade's ticket booth - COURTESY OF CASH OR TRADE
  • Courtesy Of Cash Or Trade
  • Cash or Trade's ticket booth

"We created a fair-trade ticket booth on the lot where people could meet up and trade tickets," Dusty recalls. The CoT tent served to raise the nascent company's visibility. It also provided a real-world litmus test for the theory that, if given the chance, many fans will simply look to unload or buy tickets fairly, rather than make money. To validate his point, he cites the fact that a majority of for-sale tickets hit the CoT website between two weeks to 24 hours before a show.

"That means that the people selling their tickets aren't looking to turn a profit," he asserts. "They're just fans like you and me who want to get their money back."

Sites such as StubHub make money by taking a percentage of every transaction, which is one reason prices tend to be inflated — sellers have to cover their costs to break even, let alone profit. Another reason for jacked-up prices is the false scarcity created by ticket bots, which were made illegal by the Better Online Ticket Sales Act of 2016.

Though sellers and resellers such as Ticketmaster and StubHub supported it, it remains to be seen just how effective or enforceable the law is. Ticketmaster has battled ticket bots for years with limited success. And tracking down foreign ticket bots is nearly impossible.

True fan-to-fan sites such as CoT, or Twickets in the UK, represent a safeguard against bots and inflated pricing. But if nobody selling tickets on CoT is making money, how, exactly, do its founders?

Until recently, the bulk of the southern New Hampshire natives' income came from Simple Nation, the web-design company Brando and Dusty founded a few years after graduating from Norwich University and Johnson State College, respectively. But last year, they turned to CoT full time to meet the startup's growing demands. CoT claims 110,000 members, 65,000 of whom have joined since 2015.

Membership to CoT is free and allows users access to most of the site's and mobile app's features — buying and selling tickets, access to message boards, etc. Like eBay sellers, Uber drivers or Airbnb hosts, CoT sellers are rated by other users, which helps foster consumer confidence. But for $24 per year, members can upgrade to a Gold membership, which adds an extra layer of consumer protection, as well as alerts on new tickets and trade suggestions, among other perks.

The Rich brothers concede that, while revenue from Gold memberships pays the rent and salaries for themselves and two employees, it's not yet enough to jump the company into the next stratosphere of Burlington tech companies. They are currently seeking investors for a $1 million investment plan to push CoT toward a larger, yet still comparatively modest, share of the secondary ticket market.

"If we could represent even just 1 percent of that market, it would be a huge thing for us as a company and for the tech industry in Burlington," says Brando.

A 1 percent U.S. market share for CoT would mean a jump in sales from $3 million to $50 million — $80 million to $90 million if CoT can crack the international secondary ticket market, which they intend to do, along with moving into theater and sports ticketing. The Rich brothers seem undaunted by those lofty numbers.

"Well, there are an awful lot of soccer fans in the world," observes Brando.

The original print version of this article was headlined "Golden Tickets"