Supplementary memorandum submitted by
TixDaq and the Music Managers Forum
The purpose of this submission is to bring the
Select Committee up to speed with the progress we have made on
our initiative to generate a fair, transparent and industry-based
solution to the problems associated with the secondary ticketing
market.
We are in the process of constituting the Resale
Rights Society (RRS) to provide a legal and commercial framework
for an industry based, self-regulatory solution.
RRS has already received signed Letters of Intent
to support its formation from 140 artist management organisations
representing over 300 performing artists, including Robbie Williams,
The Verve, James Blunt, Arctic Monkeys, Franz Ferdinand, KT Tunstall,
Kaiser Chiefs, Girls Aloud and Bryan Adams.
RRS has now extended its sign-up process to
include promoters (including the CPA), agents and songwriters/PRS.
Initial meetings with leading UK promoters,
leading global agencies and the Performing Rights Society (PRS)
to seek collaboration on RRS have been well received and we are
expect to gain more formal support from these groups over the
coming days and weeks.
RIGHTS
Given the significant risk and investment undertaken
by stakeholders, including songwriters, artists, promoters and
others, in order to deliver a vibrant live music industry within
the UK, there is clearly a need to foster and protect these stakeholders'
returns in order that ongoing investment is made sustainable.
It is, we believe, a reasonable assertion that
these industry stakeholders have certain rights in the value that
they create. Whilst these rights are not, at present, enshrined
in law, they are a commercial "fact of life". To date,
the industry's stakeholders—for a variety of reasons—have
been unable to harness this position and participate in the value
created by the secondary ticketing market. The MMF and TixDaq
have, therefore, established the Resale Rights Society to act
as a collective administrator of these rights.
CONSUMER PROTECTION
ISSUES
There are a number of serious and widespread
consumer protection issues that the Resale Rights Society will
seek to address. For example, it is currently common practice
for online ticket resellers to acquire inventory through any possible
means with the express purpose of choking demand in order to artificially
inflate price, RRS will seek to restrain all sites involved in
this activity.
There are also softer, but equally important
consumer protection issues that RRS will seek to regulate. For
example, currently only a few reseller sites offer guarantees
on the validity of the tickets resold on their sites, and/or guarantees
over the timeliness of the delivery of tickets. RRS will require
its "licensees" to offer acceptable levels of guarantees.
RESALE RIGHTS
SOCIETY—OVERVIEW
Mission Statement and Progress to Date
"Tackling the touts by controlling online
sales channels and opening up the market to industry stakeholders."
The Resale Rights Society (RRS) is currently
being constituted by the Music Managers Forum (MMF), which represents
the artist management community, and TixDaq, a live entertainment
intelligence company, in order to aggregate the assertion of rights
that performing artists, promoters, agents and songwriters have
in the resale of tickets to live music events in the UK.
Successfully aggregating these rights (and acting
collectively in the interests of the various stakeholders) will
enable RRS to protect fans against fraudulent behaviour by online
ticket resellers, to ensure that these ticket resellers do not
artificially inflate price and to guarantee that a proportion
of the income generated from the online secondary market is returned
to the investors in this creative industry.
RRS has already received signed Letters of Intent
to support its formation from 140 artist management organisations
representing over 300 performing artists, including Robbie Williams,
Verve, James Blunt, Arctic Monkeys, Franz Ferdinand, KT Tunstall,
Kaiser Chiefs, Girls Aloud and Bryan Adams.
RRS has now extended its sign-up process to
include promoters (including the CPA), agents and songwriters/PRS.
Initial meetings with leading UK promoters,
leading global agencies and the Performing Rights Society (PRS)
to seek collaboration on RRS have been well received and we are
close to gaining more formal support from these market segments.
Constituting the Resale Rights Society
The Resale Right Society's Articles of Association
and Ordinary Membership Agreement have been drafted by Russells
Solicitors and are under review by the MMF's Sub-Committee for
Secondary Ticketing. Russells are also in the process of drafting
Licensing Agreements that will outline the codes of conduct that
RRS will require from online resellers to adhere to in order to
gain a reseller licence.
RRS Corporate Members
It is intended that the Corporate Members of
RRS will be made up from the Music Managers Forum, the Concert
Promoters Association, the Performing Rights Society, the Agents
Association and TixDaq. The Corporate Members will be entitled
to a maximum of 6 seats on the RRS board.
RRS Ordinary Members
As the right to any performance always originate
with the artist, RRS's Ordinary Members will be the artists themselves.
A CASE FOR
LEGISLATION?
Despite terms and conditions laid down by promoters
forbidding the resale of tickets, the secondary market has flourished
for a number of reasons.
1. The ubiquitous nature of the Internet
has vastly improved "consumer to consumer" transactions.
Buyers can easily find sellers and vice versa.
2. Online ticket exchanges are exploiting
a legal grey area that makes it hard for the exchange itself to
be found complicit in the breach of contract between the original
ticket purchaser and the promoter when the original owner resells
that ticket.
3. The live music industry is rightly wary
of the effectiveness and morals of initiating proceedings against
individual fans.
4. There is a growing need from fans to have
greater freedom of what they are permitted to do with a ticket
after they have purchased it.
We do not believe that the Government will make
the resale of tickets illegal, that there are clear benefits for
the consumer and the economy in having an efficient online secondary
ticketing market, as has been clearly shown in the evidence to
date.
We do, however, believe that the Government
should look to support, through "light-touch" legislation
or otherwise, an industry backed, self-regulated solution. This
may include the recommendation of a regime akin to the Artist
Resale Right which exists in the art world, whereby the creator
of an original work has the right to a percentage of value realised
by the resale of that work.
NEXT STEPS
While RRS continues to build momentum at pace,
we feel it would be appropriate to brief you more fully and explore
solutions in tandem with your thinking. We would suggest a meeting
with designated members of the Select Committee at your earliest
convenience.
October 2007
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