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Mastering Tickets – Martin Cloonan

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On Thursday 23 February Channel 4’s Dispatches programme was entitled The Great Ticket Scandal. In it Channel 4 reporters went under cover to investigate what happens at two leading “fan exchange” sites, Viagogo and Seatwave. They found that contrary to the sites’ claims that they are simply a mechanism for fans to mutually exchange tickets, in reality they are clearing houses for a combination of semi professional and professional touts and promoters who sold direct to these “secondary” ticket agents. It was alleged that the biggest concert promoter in the world, Live Nation, is amongst those selling directly to the secondary market and thus benefitting from sales of ticket at prices which are well above the face value. The fallout from this seems set to continue.

What was at stake in the programme was two things. The first is fairness. Here fans who were at box offices and online at exactly the time that tickets went on sale were allegedly denied them because promoters had already sold chunks of primary tickets direct to the secondary market. This was portrayed as a well-established, routine, practice. Secondly, came deception. Both the sites claimed to be fan to fan, but evidence suggested that genuine fan exchange accounts were a maximum of a third of the sites’ business. In addition in cases where Viagogo was not being allocated tickets by the promoter, it used illicit means (such as multiple credit card buying) to buy tickets on the primary market which it then sold through its own website. In both cases the seller was not another fan, but the site itself. Considerable sums of money could be made here, the sites and promoters were alleged to be complicit in the deception, although no acts were named as benefitting from it.

 Complaints about unfairness and deception are certainly valid points. Fans do expect (however unrealistically) a level playing field when they are competing for tickets. That certain concert promoters sell direct to the secondary market has long been alleged and there is plenty of anecdotal evidence of it. What the programme did was to provide hard evidence in public for perhaps the first time. In addition it is not unreasonable for fans to assume that what are advertised as fan-to-fan exchange sites are actually what they claim to be. Whether all this amounts to a “great scandal” is perhaps debatable, what is not is that the whole debate around ticketing has been transformed by technology.

 The internet has made the selling of all sorts of goods, including concert tickets, a 24/7 business. It has also led to the rise of the so-called “bedroom tout” – opportunist buyers who might purchase 4 tickets to a gig, use 2 themselves and sell the others at a profit to help subsidise their own attendance. Slightly higher up in the tout hierarchy are the semi-professionals who target certain shows and buy tickets to sell, never intending to go themselves. At the top are secondary ticket agencies such as GetMeIn whose business is to sell tickets bought on the primary market (and – it is alleged – tickets which come straight from promoters who hope for a slice of the mark up).

 Secondary ticket agents dislike the term tout and it certainly has negative connotations. They would prefer to see themselves as entrepreneurs who take risks in order to help fans get in to gigs they would otherwise miss. Indeed some fans are clearly happy enough to pay extra on the secondary market in order to avoid having to scramble for tickets. In addition, the secondary market is perfectly legal. It is perhaps – as the programme alleged – immoral in some instances, but it’s certainly legal. Other than football matches (because of fears of crowd trouble) and the Olympics (where outlawing the secondary market was a condition of being granted the Games), there are no specific laws against “touting”. Moreover, often fans themselves cannot distinguish between primary and secondary agents and simply go with sites which appear trustworthy.

 What the programme did not raise explicitly, but which is certainly important, is the question of what a concert ticket actually represents. Is it a commodity like any other which can be bought and sold, or does it have some special capacity which means that the purchaser is honour bound to use it only for themselves and those they bought it for?

 In fact there has been quite a lot of work on such issues in recent years. In 2005 the Office of Fair Trading launched an enquiry into ticket agents and concluded that generally secondary agents offer a valuable service to consumers and that real problems concerned forgeries and websites which offered non-existent tickets and took customers’ money before disappearing. However the issue did not go away and in 2008 was subject to a House of Commons Culture Media and Sport Committee enquiry. Readers wishing to know some more ins and outs are recommended to look up the Committee’s report on Ticket Touting.

 The Committee heard evidence from the great and the good in the world of sports events organisers, concert promoters, primary agents and secondary agents. In each case what the issue finally rested on was first the status of the ticket as property and second the issue of whose property it was.

 Whatever fans might feel, it is clear that tickets can be seen as forms of property. In essence they are goods that can legitimately be bought and sold. But tickets for top events are rivalrous goods – only a certain amount of people can get in and their enjoyment of the event is partly at the expense of those denied entry. As far as I am aware the status of who “owns” a particular gig has never been subject to legal investigation. Is it the act? The venue? The promoter? Ultimately it seems that it is the latter. Certainly concert promoters view tickets as theirs. It is their event and they, in collaboration with the act, venue and (possibly) primary ticket agent, seek to determine who gets in and at what price.

 I doubt if many people dispute this. But what is in dispute is what happens when a ticket is sold. Does the purchase of a ticket signify a transfer of ownership from the promoter to the purchaser? Logically one might think so. If I buy a can of beans, it becomes my can of beans and I can do what I like with it, including selling it on to another bean enthusiast. Surely the same applies to a concert ticket? Well, not exactly. Check the terms and conditions on the backs of tickets and the conditions on many primary ticket agent sites and you’ll find that they include a set of rules that people attending concerts have to adhere to. One of these is often not selling the ticket on. In some cases it is explicitly stated that the ticket remains the property of the promoter until the event is over.

 Previous research has found that fans tend to think that this is nonsense. When a ticket is in their hand it feels like their property. In addition it appears that the fine print on tickets has never been tested legally and that promoters who have turned fans away from gigs because they had bought tickets from touts exceeded their legal powers. It has even been suggested that Glastonbury’s rules about how people can buy tickets may be subject to legal challenge. But thus far no one appears to have the legal stomach to bring cases.

 Nevertheless a number of promoters have argued that the tickets are their property and, as such, fans do not have a right sell them on. (Let’s leave the fact that some promoters sell direct to the secondary market, seemingly in contravention of their own rules to one side for the moment). Unfortunately promoters tend to be somewhat entrepreneurial sorts whose business nouse is for the big buck, not necessarily the moral highground. Thus while their collective body, the Concert Promoters Association (CPA), spoke out against the secondary market, it is clear that a number of promoters saw the secondary market as a chance to make money in a world where margins were increasingly tight and top acts asking for an increasingly large share of the box office. One result of the latter phenomenon is that promoters have to look to other avenues to make money and here the secondary market is an obvious attraction.

 After all the evidence was gathered the MPs decided against recommending the outlawing of the secondary market. Instead they called for a Code of Practice and tighter regulations. Reviews by the Department of Culture Media and Sport (DCMS) reached much the same conclusion. In sum, this was that tickets are property. Despite what some promoters claim there is a transfer of ownership and a healthy secondary market is good for all.

 The result of this is that is that it’s effectively open season. Some promoters will talk of selling direct to the secondary market. Some say that for all their public pronouncements about loving their fans, acts themselves ask promoters to sell direct to the secondary market and split the dividends. (Hard evidence of this is, understandably, somewhat difficult to come by. It’s not exactly going to be written into the contract). Others talk of the introduction of “dynamic” pricing and of the secondary market playing a key role in this.

 Underpinning all this is the fact that while promoters often see themselves as risk takers, their daily praxis often involves trying minimise risk. In this case a ticket’s face value is not necessarily its optimum market price. This is because selling tickets at the maximum price which the market will bear may be too risky. It is risky for some acts who may want prices kept down in order to be seen as good guys and to keep fans loyal. In addition it may also be too risky for promoters who often argue that they are in a long-term game and that there is a danger people will not come back if they feel ripped off. Here a ticket priced at optimal market price may not pay long-term dividends if the experience fails to match the expectations. Overall there are various reasons why tickets with a face value of £50, may actually be worth  £70 (or much more) in the market place. Effectively the secondary market may reflect the actual value of a ticket as opposed to its face value.

 And, of course, we live in a market economy. If a fan is willing to pay £300 for a ticket with a face value of £20 in order to see No One and The Nobodies, then what’s wrong with that? The fan may or may not be a mug, but they have gained (albeit at a premium price) access to the experience they want. In addition their idol gets paid, as do all those involved in putting the gig on. At this level even if touting were illegal, it would be a victimless crime.

 Except that life isn’t quite that simple. As the example above helps to show, for fans the ticket is more than an economic exchange. As promoters fully realise, it’s access to a unique (as in one-off) experience. In other words, it has what might best be termed a cultural value. And if we believe  – as I certainly do – that the widest possible range of people should be able to access the widest range of cultural events, then restrictions on the selling of tickets may well be justified on the grounds of helping to ensure such an outcome. It is presumably for such reasons that tickets for the Olympics are covered by the law. The ballot for Glastonbury offers further evidence of a desire to extend its experience beyond simply those with the biggest wallets and/or a superfast internet connection. Indeed, promoters also seem to recognise that live music is about something more than economic exchange and in their evidence to the Culture Committee some argued that all they wanted was parity so that the laws covering football and the Olympics should be extended to their events.

 Restrictions on selling tickets only make sense if tickets are seen as particular commodities with special attributes related to the uniqueness of cultural events. There is a difference between a tin of baked beans and a Bruce Springsteen ticket. One is mundane, the other special. I can buy a tin of beans anywhere, anytime but I can only experience a certain act on a certain day at a certain venue once.

Tickets provide access to events which inevitably more people want to go to than can. If openness and fairness are desirable in the allocation of cultural events – and, along with many fans, I suggest that they are – then the secondary market (where sellers are often hidden) seems an unlikely place to find them.  The sorts of dubious practices unearthed by Dispatches seem even less likely to yield the necessary results.

 Football is special. The Olympics are special. But so is popular music. After all the talking is done there still seems no reason to me to treat popular music fans as any less worthy of protection than those eager to see Manchester City or Usain Bolt. If it is possible to protect football and Olympics fans from the excesses of the market, then it is possible to do the same for music fans. Responsible capitalism surely requires no less.

 Martin Cloonan

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12 thoughts on “Mastering Tickets – Martin Cloonan

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  1. There are numerous related matterss here- inevitably it sparks off theoretical questions- with practical consequences. Simon Frith makes the following points:

    “a) Who ‘owns’ a gig? This presumably relates to who has has legal responsibility for it. If a band no-shows, I think promoters have to refund tickets (at cover price) rather than whoever sold them? (True in my experience) Who’d be sued for personal injury? Venue if it was a building problem but again promoter if it was a health and safety issue?

    b) What is a ticket? It could be regarded as a license to occupy a particular seat ( a form of rental) for a particular time and therefore non-tranferable legally like other rented property. This seems to be how some travel tickets work or season tickets at football, opera houses, etc. which give one a named seat. On other hand I presume if you pay vast amounts to, say, Arsenal for a box then you can fill it with whoever you like)

    c) Other forms of musical property are also effectively licenses (i.e: you can’t do everything you like with a CD- ownership doesn’t give you a license to copy or play in public).

    d) The issue that exercises consumers in this is the gap between
    advertised ticket prices and the actual amount paid when one factors in booking fees etc. The question becomes one of why tickets aren’t simply advertised at the price that includes the compulsory add-ons. There’s an obvious parallel case here with gripes against cheap airlines like Ryan Air).

    Promoters obviously see it in their interest to advertise tickets as cheaper than they actually are. I take the case that from a promoter’s point of view a ticket bought at a mark up through secondary site is a ‘primary value’ ticket with the consumer happy to pay extra for the convenience, etc. But why not then simply keep such tickets back and sell them as primary tickets at the mark-up price to begin with? Presumably for the risk/no risk reasons Martin describes. But certainly there’s a degree of marketing hype here which means promoters do understand what he means by ‘cultural value’.

    e) The other owner of the gig is the fan and I think one digital effect is that commitment to a group can now be measured simply by a monetary value (how much you pay for a ticket) rather than other sorts of (time) commitment. In his early autobiography Cliff Richard talks about being stripped of his school prefect’s badge because he got up in middle of night to queue for Bill Haley tickets and therefore missed morning school (I did same for Beatles). Basing ticket access purely on price distorts the relationship of band and fan (particularly as bands build their fan base over time). That’s why Bruce Springsteen gets so exercised when these sorts of deal are exposed and why it seems to be in everyone’s interest to be as untransparent as possible about where the money actually goes.”

  2. A couple of other points, also pertaining to (government and industry) policy.

    Regarding ‘who owns the gig’- This also relates to the Form 696 requesting details be given to the Metropolitan Police about types of event- music genre, contact numbers of artists. One of the main objections framed by U.K Music was that it was discriminatory- some types of music were apparently more likely to lead to disorder than others. But asking for contact numbers for the artist– since dropped along with the genre stipulation I believe– also implies a large degree of ‘ownership’ on the part of the artist. Obviously there are cases when an artist might ‘incite’ trouble, Axl Rose was charged with causing a riot in St. Louis by storming off-stage and blaming the venue security, for instance. In those instances, though, that it is a specific breach of a specific law on the part of the artist that could be applied in a whole raft of other contexts. The request for artist contact numbers prior to a gig suggested a degree of responsibility (‘ownership’) residing in the artist for what happens or, crucially, might happen at the gig.

    As to ‘other forms of musical property’- this also feeds into the nature of the gig ticket as a rivalrous good. The physical limits of a venue mean that the promoter/venue/act will always have a certain minimum level of control over how the ticket gets used– leaving aside exceptional circumstances where it become a public order issue, like the decision late in the day to make Woodstock a free festival due to the sheer force of numbers of people who had showed up. What the web has done is expand the parameters for how that good is exchanged. Obviously it did that with recorded (licensed) goods as well but the effect there was to make them effectively non-rivalrous. DRM, for instance, was an attempt, after the horses had bolted, to make recordings (slightly more) rivalrous again- e.g: only being able to play a purchased download on a certain number of specifically assigned machines.

    Ultimately the bounded nature of the venue in conjunction with the ‘aura’ of the artist has meant that the ingress of computers into the distribution process has had the opposite effect in terms of shifting power between fan/end-user and vendor away from the fan, as Martin’s point about access to cultural events suggests.

    I’d add that, as ever, with discussions about the effects of digital technology there’s a temptation to think in revolutionary before/after terms rather than a more evolutionary model, understandable due to the scale of the changes. But it’s worth pointing out that the shift in power away from the fan, or at least a certain type of fan, has a pre-cursor in the introduction of credit card/telephone bookings. Simon talks about queuing through the night for Beatles tickets, but that model was gone before web distribution came into play. Credit card/telephone bookings opened access to a segment of the audience at the expense of others (younger fans, presumably more subject to parental control over the matter, and anyone else without a credit card).

    To that extent, credit cards and then the web have made tickets more rivalrous than even according to the limits of the venue, or at least tilted the nature of the competition.

    And the RyanAir comparison- I think it holds true, but I wonder if there’s a slightly different complexion to the nature of the complaint. Scarcity accrues value and while ‘compulsory add-ons’ like booking fees are annoying at best and underhanded at worst, they’re not hidden from view. At the very least, they have to be made plain at the point of purchase. But the practices exposed in the Dispatches programme add scarcity to the tickets by taking them out of the primary market in a way that tacking on a couple of quid extra for the privilege of buying something doesn’t. They’re both types of dishonesty but I wonder if the airline model doesn’t adhere to the way the product is presented whilst some of these secondary ticketing practices relate to (artificially) ramping up the value of the product itself. Caveat emptor in either case.

  3. The other question to raise is to what extent top-tier artists and their management tacitly condone and perhaps even encourage the dirty work carried out by secondary ticketing companies like Viagogo and Seatwave. The Dispatches documentary said that “we found no evidence that any of the artists are aware of the allocations”, but I wonder how hard they looked for such evidence.

    Stuart Galbraith, who used to work at Live Nation and now runs Kilimanjaro Live (a concert promotion company owned by Live Nation rival AEG Live), recently said in an issue of IQ magazine: “Concert promoters work on 3-5% margins and it’s not a sustainable business. It’s no surprise that Live Nation is now a ticketing company because Ticketmaster runs on a (much higher) margin. It’s no surprise that AEG is a facilities company because it makes more money running venues.”

    It’s an accepted practice for top-drawer artists who are guaranteed to sell out stadium tours to demand ninety-five per cent (sometimes even more) of sold-out box office receipts at face value. This is because it is assumed that promoters earn more than 100% of face value ticket prices through owning ticketing companies, allocating tickets directly to secondary ticket agencies, and by operating the venues in which the acts perform and therefore taking a cut of the parking revenue, food and drink revenue, etc. But the point is that A-list acts could demand to put a stop to these practices and increase pressure on promoters to comply. Apart from the occasional complaint from Bruce Springsteen, I don’t see any stadium-level artist doing this.

  4. On a slightly more abstract note, and not to doubt his sincerity, it also fits Springsteen’s authentic persona (or brand if you want to be a bit more cynical about it) that he make a noise about this, possibly more than for many other top-tier acts.

    Perhaps it’s not surprising, given that a sustained stand can stick a heavy broomstick through the spokes of any touring plans at anything approaching the top level. Pearl Jam found this out when they took on Ticketmaster in the 1990s. It no doubt cost them millions and their attempted boycott and subsequent attempt to take the matter to the law on an Antitrust basis found them very much standing alone in the cold. They ended up having to throw in the towel. Then, like Matt’s suggestion today, the point was made that the A-list could do more to ease the situation by speaking out but group action on these things is always harder to instigate.

    Obviously complicity brings financial rewards, but I wonder if fear of negative consequences isn’t also bound into the matrix of factors militating against a more substantive resistance to these practices. So I suppose credit where its due in the end to those like Springsteen (and, earlier, Pearl Jam, who literally put their money where their collective mouth was) who do speak out. It’s alot easier to gain ‘authentic’ credentials by speaking about things that we can all agree on – universal issues like hunger, poverty or peace – than a specific case that has a direct bearing on how you do business and interact with your audience.

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  6. The issue of fairness is something that has flagged up in a recent study of mine exploring the personalities and music preferences of music piracy, with fairness being negatively correlated with favourable piracy attitudes. While this is intuitive, the relationship is complex.

    Elsewhere, Jambon and Smetana (2011) demonstrated that judgments on illegal downloading varied when concerns on the fair pricing of music and the structure of the music industry were made salient. Throw this new revelation outlined in the blog article above and music pirates are perhaps armed with a greater incentive to download music illegally. Indeed, Nuttall, Arnold, Carless, Crockford, Finnamore, Frazier and Hills (2011) suggestion that a deep‐rooted antipathy towards the recording industry as potentially impossible to address.

    The issue of morality is an interesting one as of course, a large majority of the fans being ripped off buying concert tickets will also be illegally downloading music; thought to be ‘morally unsustainable’.

    I think the issue of the ownership of a concert ticket is at the heart of this argument. Success stories from the likes of Nine Inch Nails (see Ogden, J.R., Ogden, D.T. and Long, K. (2011) have demonstrated alternative ways to distribute recorded music direct to fans via the Internet, whilst making a profit and securing reciprocal relationships between fan and artist. What are the barriers to distributing concert tickets in such a manner also? If technology has mediated the distribution methods of recorded music (as it clearly has), how can it not also accomplish the same goal with live music?

  7. Excellent post. At the weekend, my daugher was one of many kids attempting to get a One Direction ticket for their gig in Cardiff – NEXT MARCH (yes – 2013)!! She managed to get two – but most of her friends missed out – and are happy to pay way over market value. There is a great account of this issue via the following link:

    http://www.bbc.co.uk/blogs/watchdog/2011/10/ticket_prices.html

    A number of questions come out of it for me – the first of which is: how does this process impact the artists themselves (being an ex professional musician I would say this)? In other words – how do artists get paid in this new world? One potential solution (amongst many) is to use the technology to sell the tickets yourself. Los Campeinos are a band in Wales doing just that – if a fan subcribes to their online mag (Heat Rash) – you get to purchase tickets with no booking fee! See http://www.loscampesinos.com/wheat/heat-rash-1/

    The issues surrounding ownership are faciniating and in some respects resonate with those surrounding the (lack of) ownership of Mp3’s and Kindle ebooks. Just because we purchase something in the digital world – does not mean that our hard earned cash enables us to sell it on!! Interesting times……………

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