Memorandum submitted by The Concert Promoters
Association Limited
I. EXECUTIVE
SUMMARY AND
INTRODUCTION TO
THE CPA
1. The Concert Promoters Association (CPA)
was formed in 1986. It now has 37 members (listed in full at Appendix
1) who are responsible for promoting at least 90% of contemporary
music events in the UK ranging from club performances, theatre
events, arena shows through to large summer festivals. [3]The
UK has one of the most vibrant and diverse live music scenes in
the world. Its economic contribution in 2005 was more than 23
million concert goers contributing to a sector worth £500
million.
2. The CPA represents and promotes the interests
of its members on a range of issues including work permit procedures,
health and safety, licensing, insurance, security and policing.
One of the main issues the CPA is currently engaged with is the
detrimental impact ticket touting is having across our sector.
3. Touting is leading to fans being ripped
off, priced out of events and denied standard consumer protections;
artists and events losing fans' goodwill and facing reputational
damage; money being diverted away from the music sector—especially
the smaller artists and events; increasing organisational costs
incurred due to increased anti-touting arrangements, security
and policing arrangements.
4. The Internet has fuelled a huge growth
in touting by secondary ticket sellers which has brought an avalanche
of problems for CPA members that are expanded upon in this submission.
5. The CPA were one of the organisations
involved in the establishment of the DCMS Ticket Touting Summit.
We have worked closely with the Government to see how the actions
of touts can be addressed. We have also committed our own resources
to tackling the problem. But as this submission will show, it
is not a fight the CPA can win alone. We need the support of Government.
6. We very much welcome the Select Committee's
decision to inquire into this issue. We believe that the evidence
you will see from us, and from others in the cultural and sporting
sector, will lead the Committee to conclude that statutory regulation
of the resale of tickets is now needed.
7. There are two legislative models we would
urge you to look at. Our preferred option would be to build on
the template that already exists in the UK—the ticket touting
legislation that has been introduced for the 2012 Olympics (Appendix
5). [4]This
is fit for purpose, covers internet sales, and is the right model
to be applied to the wider sporting and cultural sector. Most
importantly, Parliament has already agreed this approach. What
a wonderful legacy for the cultural and sporting sectors if the
Olympics were to stimulate protection for all events.
8. Another model was recently introduced
in Australia, where new legislation has been introduced that limits
the resale of a ticket at anything over 10% of the face value
(Appendix 6). [5]
9. We have structured the submission that
follows in line with the questions posed by the Committee's terms
of reference.
II. THE UNDERLYING
CAUSES OF
TICKET TOUTING,
AND ITS
IMPACT ON
PERFORMERS, PROMOTERS
AND THE
PUBLIC
10. In pure economic terms, touting occurs
because tickets are priced below the "market clearing"
rate. This is not something we apologise for. In fact it is something
CPA members are proud of. Tickets are priced at a rate that is
sustainable for the long-term health of the industry.
11. CPA members often organise concerts
where we could charge substantially more than the prices we do.
Both CPA members and the artists we work for choose not to do
this as this is not how they wish to treat their core fan base,
nor would it be to the long-term benefit of themselves or the
music sector.
12. The excitement generated at live concerts
derives from full houses and the audience inside knowing there
are others outside who would love to trade places. Full houses
generate atmosphere and add to the demand for more live music
that starts with those who missed tickets for the initial concert.
Live music is best when it is enjoyed by real fans and those with
the greatest appreciation of each artiste's musical offerings;
it is not the exclusive right of those with the deepest pockets.
13. To this end, tickets are priced to be
affordable for the general public to the extent that the concert
will reach sell out leaving a small excess in demand from fans
without tickets. Those without still crave the live music experience
and either go to that artistes' next show or another similar artistes'
gigs.
14. Touting is the deliberate exploitation
of fans by people who seek to make a profit out of the difference
between the ticket price and what the market will bear. The CPA
wholeheartedly endorses the comments of Tessa Jowell, the Secretary
of State for Culture, Media and Sport:
"Pop concerts, sporting events and music
festivals risk becoming the preserve of people with bulging wallets
[...] the innocent victim of ticket touting is the fan who has
to pay through the nose for a vastly overpriced ticket to see
their sporting, stage, or musical hero. These are the people we
must protect".[6]
15. Touting has a detrimental effect on
all of those involved in live music performances.
16. It prices real music fans out of being
able to attend their favourite performances. The additional money
spent by fans on touts is money that is "lost" from
the music sector. It is likely to mean that less overall money
will be spent on the music sector as fans will see their disposable
income fall. This will particularly hurt smaller performers and
venues but will also have a detrimental knock-on effect as spending
decreases on related sectors such as the artistes' recorded music.
17. Money is also lost from the Treasury
as many touts do not pay VAT on their sales or income tax on their
profits.
18. Touting undermines consumer protection.
All of the standard consumer protection mechanisms are rendered
redundant when a ticket is transferred. This means that should
someone buy a ticket for an event that is cancelled, say due to
illness as occurred recently with some Kylie Minogue concerts,
or due to adverse weather such as the forced cancellation of the
2006-07 New Years Eve Celebrations, the ticket holder has no right
to a refund from the secondary reseller.
19. The recent collapse of TicketTout.com,
a secondary touting business, who went into administration with
debts of more than £1.5 million letting down thousands of
fans who received no refunds for tickets they had paid many times
above face value for, demonstrates the scale of the problem.
20. Lane Bednash, the official receiver
into the collapse of TicketTout.com commented on this case:
"I was only appointed as administrator a
week ago, but even in that short time I'd have to say that I've
never seen a business in so much need of regulation. [7]
Ticket Touting case studies
Recent TV consumer programmes such as the BBC's
Watchdog and also the BBC's Inside Out have followed the consumers
experiences at the hands of touts. A couple of female teenagers
were left alone hundreds of miles from home outside the T In The
Park Festival, Scotland when the tout who had their tickets failed
to show up for 30 hours.
Cliff Richard appeared on Watchdog in response
to touts selling "Front Row Seats" to his longtime devoted
fanbase prior to any of his tickets being released thus demonstrating
all these "Official Secondary Agents" were trading fraudulently.
Four students in Nottingham paid £883 on an internet site
for 4 tickets to see the Killers (face value £26.50 each).
The tickets never materialized and no refund was forthcoming.
Inside Out filmed scores of touts queuing for
Take That tickets the day they went on sale and buying up hundreds
of tickets quite legitimately but clearly for immediate resale
for profit. The same programme captured footage of Coldplay fans
in tears let down by touts who had charged extortionate rates
for "best seats" only to turn up (after the band had
taken to the stage) with scraps of some of the worst seats they
had bought from other customers on the way in who had "spare"
tickets. These incidents were all filmed by the BBC. Every night
of every week the CPA members are having to deal with similar
scenarios the length and breadth of the country.
"Future" Sales
21. Touts often offer tickets for sale for
concerts that do not exist, or before the tickets have actually
been sold and distributed.
22. The problem with these "future"
sales is that it encourages a demand that the agencies then have
to supply. There are only two outcomes to such a scenario:
(i) touts secure advance funds with which
they enter the market place seeking to purchase tickets using
any means available, or
(ii) the fans who think they have bought
tickets are subsequently disappointed when the touting operation
cannot supply them, or the tickets that are supplied are subsequently
declared invalid.
Ticket Touting case study
Prior to the announcement of the last Robbie
Williams UK Tour, internet touts were offering tickets for sale
at the City of Manchester Stadium and Cardiff Millennium Stadium.
Robbie was actually only ever going to be playing in Leeds and
London. When the official dates were announced thousands of fans
held off as they believed new dates would be added in Manchester
and Cardiff. When the CPA member press released the gigs were
sold out and no further dates to be added the Manchester Evening
News responded with the headline "Robbie Snubs Manchester"
and carried the story of all the fans disappointed he wasn't coming
"as advertised" by what turned out to be fraudsters.
Those who had "bought" for Manchester
and Cardiff were told there was no refund and instead they had
to travel the hundreds of miles to the different venues which
also happened to be two months after the speculators had sold
tickets for.
To compound these problems, as it transpires
Wembley Stadium did not get built in time to host Robbie's concerts,
five sold out nights at Wembley on 65,000 capacity per night had
to be relocated to Milton Keynes. Naturally the promoter offered
a refund to any ticket holder who did not want to attend the rescheduled
shows at Milton Keynes instead of Wembley. Over 50,000 people
asked for a refund as (a) there are no seats at Milton Keynes,
(b) they didn't want to travel to Milton Keynes and (c) the reason
they bought in the first place was to experience Robbie Williams
live at the new Wembley Stadium. These refunds were issued straight
away. However, anyone who had bought on the Secondary Market,
and therefore had paid over face value, were not issued the opportunity
of a refund and were forced to either attend the gig at its altered
location or forfeit the money they had paid.
Ultimately these practices severely harms the
artistes and the loyal fans but for the fraudulent traders there
is nothing but profit.
III. WHETHER
OR NOT
THE RESALE
OF A
TICKET, AT
FACE VALUE
OR AT
A HIGHER
VALUE, SHOULD
BE PERMITTED
IN PRINCIPLE;
AND WHETHER
THE ACCEPTABILITY
OR OTHERWISE
OF RESALE
DEPENDS ON
THE CIRCUMSTANCES
IN WHICH
TICKETS ARE
OFFERED FOR
RESALE
23. As a matter of principle, the CPA believes
that tickets should not be resold for commercial gain. The CPA
is not opposed to fans buying tickets for friends and family or
transferring tickets at face value. CPA members are also committed
to the further introduction of ticket resale mechanisms where
fans can sell tickets at the price they originally paid—but
we can only extend this service once legislation is introduced
to ensure it is not abused by touts.
24. The resale of tickets should be in accordance
with the terms and conditions under which they are sold. This
creates clarity for the consumer and ensures the protection of
the artiste, promoter and event organiser who are selling a licence
to enter their performance on private property.
25. CPA members restrict the commercial
sale (and resale) of their tickets to authorised people and agents.
This allows for the promoter to ensure that tickets are sold within
appropriate guidelines at reasonable prices, and through distribution
methods that ensure access for fan club members and the general
public.
26. The terms and conditions on tickets
make it clear that if the ticket is sold without authorisation
then it is void. The subsequent purchaser is liable to be prevented
from entering the event.
27. Members of the CPA also apply a Term
and Condition similar to the following to their tickets:
"Tickets are strictly non-transferable for
profit or commercial gain and must not be sold for profit or commercial
gain, or advertised for sale anywhere for profit or commercial
gain".
28. Importantly, this term allows for the
resale of the ticket; but not for commercial gain. There is nothing
wrong with a person buying a ticket for a family member or friends.
Neither is someone who decides not to attend an event (for whatever
reason) prohibited from reselling the ticket for the price they
paid.
29. The CPA also works closely with the
Society of Ticket Agents and Retailers (STAR). STAR was formed
by the entertainment ticketing industry in November 1997 to provide
self-regulation within the industry, promote high standards of
service to consumers and enhance and promote the public perception
of the primary ticket market.
30. STAR members operate within a strict,
customer focused, Code of Practice and the Society operates an
independent mechanism to help customers in the event of unresolved
complaints against members.
31. The consumer should also have the right
to see the exact location (block, row and seat number) of the
ticket they are buying and proof that the seller is in possession
of that ticket. The Internet allows fraudsters to hide behind
official looking websites and offer tickets for sale they do not
possess as well as offer the very best seats in the house which
they do not possess.
32. The CPA currently cannot offer a blanket
refund policy whilst touting is so openly accepted. To do so would
further encourage touting as touts would simply use promoters
as a clearing house—purchasing as many tickets as they can
knowing that any they could not sell would be returned to the
promoter for a refund.
33. The CPA have committed that as soon
as the Government is able to assist with protecting the terms
and conditions applied to concert tickets by legislating against
the secondary resale for commercial gain, that all CPA members
will only sell tickets through STAR ticket agents and that all
of them will offer customers a resale mechanism should they no
longer be able to attend the concert.
34. The customer therefore simply has to
contact the original point of purchase, that initial ticket will
be cancelled and offered for resale at face value. Once the new
transaction is complete, the original purchaser will be refunded
their monies.
IV. THE IMPACT
OF THE
INTERNET UPON
THE TRADE
IN TICKETS
35. The Internet has had a huge impact on
the prevalence of ticket touting. It is a perfect forum for putting
a buyer and seller in touch.
36. The Internet has revolutionised the
way in which tickets are sold. On the whole this has been a positive
force as it has allowed people to buy tickets without having to
visit a box office or make a lengthy telephone call. Ticket buyers
can also use internet services to secure far more information
about the tickets they are buying.
37. Unfortunately these on-line processes
are easily exploited by touts who now systematically infiltrate
booking systems and sales mechanisms. The Internet also allows
touts to find a market for their ticket, using internet auction
sites, message boards and authorised ticketing agents.
38. On Monday 4 June a search on Google
using the words "Concert tickets" produces a plethora
of on-line secondary ticket agents all of whom are selling tickets
for this summer's major concerts at greatly inflated prices. Attached
as Appendix 2 to this submission are more illustrations at the
scale of touting on the Internet. 8[8]
39. On 4 June 2007, the CPA searched for
tickets on eBay, and found 12,697 tickets for sale. Almost all
of them are concert and sports events for which the ticket terms
and conditions are being breached by their sale on eBay.
40. Such is the amount of business that
eBay now generates through secondary ticket sales that a search
on Google for almost any artiste name followed by the word ticket
will generate a paid for advert by eBay to drive would be customers
to their site of unauthorized sales. eBay, however, refuse to
take commercial paid for adverts from legitimate concert promoters
who could advertise forthcoming shows and the availability of
tickets. Clearly they see their position in the marketplace as
being more lucrative working against concert promoters rather
than with them.
41. Investigations undertaken by the CPA
last year of ticket sellers on eBay found that many people are
using eBay as a platform to operate as ticket touts. These results
are set out in Appendix 3. [9]
42. The Committee will see sellers such
as "polatic_asthmatic" who had a monthly touting turnover
of £6,356 in July 2006, "soldouteventz" who was
selling £11,240 of touted tickets for Guns N Roses that month.
V. WHETHER OR
NOT TICKETS'
TERMS AND
CONDITIONS BANNING
TRANSFER AND
ONWARD SALE
ARE FAIR
OR ENFORCEABLE
43. The CPA believes that conditions prohibiting
transfer are fair. As we have already set out, these conditions
are not intended to prevent transfer between friends and families
or even non-commercial transfer. But we do believe it is fair
to try and protect fans and consumers from people who simply act
to remove value from the market.
44. We are also not opposed to transfer
when someone cannot attend. CPA members are happy for people to
sell on their tickets at face value, or return them to us to be
put up for sale again. Indeed we are committed to introduce a
resale mechanism for every concert in the UK as soon as anti touting
measures are introduced by the Government.
45. It is currently difficult to enforce
the anti touting terms we apply to tickets. This is partly because
the auction sites and ticketing shops deliberately allow people
to hide the ticket's details and turn a blind eye to tickets being
sold that are contravening their terms and conditions.
46. Government regulation is now needed to enable
us to enforce ticketing terms and conditions.
VI. THE MERITS
OF NEW
APPROACHES BY
TICKET AGENTS
ATTEMPTING TO
PREVENT TRANSFER
OF TICKETS,
INCLUDING WIDER
USE OF
PERSONAL ID
47. Concert promoters are constantly reviewing
the mechanisms available to us to prevent ticket touting. We are
spending more and more time and resources on tackling the problem.
Just this week T-in-the Park made another 1,000 tickets available
as a result of action to cancel tickets that had been sold by
touts.
48. But there is only so much that concert
promoters can do alone. The CPA do not believe it is practical
to inconvenience 99% of the concert going public by asking them
to provide ID at every concert they attend. We are determined
the 1% of concert goers and touts should not harm the enjoyment
of future generations of concert goers. Where does it stop? At
the theatre? Cinema?
49. Glastonbury Festival saw its applications
for Festival tickets drop dramatically due to the complex nature
of the application procedure where genuine fans were asked to
upload a photograph of themselves to be printed on the Festival
ticket.
Ticket Touting case study
BBC Radio 1 have an annual "Big Weekend"
which is a free Weekend Festival broadcast live on Radio 1 and
BBC TV. This year 500,000 people applied for just 35,000 tickets.
The ticket ballot separated every applicant by postcode and name
and credit card to ensure no one person was able to win more than
one pair of tickets. The tickets were bar coded to prevent forgery
and the winners' details were printed on the tickets. The tickets
were not sent out until 48 hours before the event.
However despite all these efforts these tickets
that the BBC gave away totally free were up on sale for hundreds
of pounds on eBay within hours of their release. Sellers were
offering fake ID to go with the tickets. As there is so much demand
for the event inevitably there was a huge demand from people wishing
to purchase them. DCMS Minister Shaun Woodward wrote to eBay asking
them to take down sales for this event. eBay refused despite their
having signed up to a voluntary code applied by the DCMS to act
against ticket touting.
Ticket Touting case study
The Arctic Monkeys, one of the most sought after
tickets in the UK have issued tickets for their forthcoming shows
at Lancashire Cricket Club, their biggest concerts to date, as
"Print At Home" tickets, similar to Easy Jet etc. Therefore
the valid portion of the ticket is the barcode. This is designed
to limit touting. The barcode will only gain entrance to the venue
once and thereby invalidate all other copies with the same barcode.
Yet there is also a danger that people will sell on barcodes that
do not work. Despite the obvious high risk therefore of buying
in the secondary market the demand for tickets is from commercially
naive but hugely enthusiastic young fans who are blind to the
dangers of fraud due to their desire to be amongst the audience,
that to them will be such an historic occasion.
50. The CPA has sought to persuade secondary
agents to work with us to prevent touting. Last year we wrote
to eBay asking them to help uphold the Statement of Principles
agreed by all parties who attend the DCMS Ticket Touting Summit
under Tessa Jowell's leadership. A copy of this letter is attached
as Appendix 4. 10[10]
51. In summary we asked eBay to:
— Provide all key ticketing details
on listings on their site. This includes block, row and seat number
and the terms and conditions that make it an offence for the ticket
to be transferred.
— Provide the CPA with the details
of known touts operating on their site so that we can block their
access to tickets.
— Allow primary agents to advertise
on eBay so that we can help divert fans away from the rip-off
merchants.
— Enter into a memorandum of understanding
between eBay and Concert promoters to restrict the sale of tickets
for high profile events attracting a lot of touting activity.
— Introduce official "buy-it-now"
selling at which tickets could be resold at the original face
value price.
52. eBay declined all of these opportunities.
This demonstrates to the CPA that they are deliberately and knowingly
in alliance with the touts.
53. The failure of the DCMS Summits to secure
a voluntary self-regulation demonstrate that the regulation of
this sector is now needed.
VII. WHETHER
OR NOT
THE EXISTING
OFFENCES OF
SALE BY
AN UNAUTHORISED
PERSON IN
A PUBLIC
PLACE OF
A TICKET
FOR A
DESIGNATED FOOTBALL
MATCH, OR
FOR EVENTS
AT THE
LONDON 2012 GAMES,
SHOULD BE
EXTENDED TO
COVER OTHER
SPORTING OR
CULTURAL EVENTS
54. There are two legislative models we
would urge you the Committee to consider.
55. The first, and by far our preferred
option, would be to build on the legislative framework that already
exists in the UK in the form of the ticket touting legislation
that has been introduced for the 2012 Olympics. (Also see Appendix
5): [11]
(1) A person commits an offence if he sells
an Olympic ticket—
(a) in a public place or in the course
of a business, and
(b) otherwise than in accordance with
a written authorisation issued by the London Organising Committee.
(2) For the purposes of subsection (1)—
(a) "Olympic ticket" means
anything which is or purports to be a ticket for one or more London
Olympic events,
(b) a reference to selling a ticket includes
a reference to:
(i) offering to sell a ticket,
(ii) exposing a ticket for sale,
(iii) advertising that a ticket is available
for purchase, and
(iv) giving, or offering to give, a ticket to
a person who pays or agrees to pay for some other goods or services,
and
(c) a person shall (without prejudice
to the generality of subsection (1)(a)) be treated as acting in
the course of a business if he does anything as a result of which
he makes a profit or aims to make a profit.
56. Section 31 of the London Olympics and
Paralympics Act 2006 is proven as fit for purpose, covers internet
sales, and is the right model to be applied to the wider sporting
and cultural sector.
57. The CPA supports the protection given
to the Olympics. But we do not see why the rest of the sector
has to be second class citizens.
58. Another option the Committee might consider
comes from Australia, where new legislation has been introduced
that limits the resale of a ticket at anything over 10% of the
face value. See Appendix 6 for a copy of this legislation. [12]
59. The Queensland Parliament has issued
explanatory notes to explain the legislation, they state:
"These laws have been passed laws to make
ticket scalping an offence. They are designed to allow genuine
fans a fair and equitable opportunity to purchase tickets to events.
These laws will protect genuine fans, supporters, promoters, sporting
bodies and sponsors alike by making it an offence to purchase
a ticket simply for the purpose of profiteering.
The Act does not aim to restrict people's ability
to resell tickets where they have a genuine need to do so and
where the transfer of the ticket is allowable under the ticketing
conditions.
The 10% margin enables people who are unable
to attend an event to recoup the ticket price and any costs associated
with the ticket resale. In addition, an exemption is provided
to allow for the lawful resale of tickets above the 10% margin
by non-profit organisations for fundraising purposes."
The CPA urges the Select Committee to protect
fans of music, artistes, and event organisers by recommending
to government that it brings in regulations to prevent the touting
of tickets
June 2007
3 Not printed. Back
4
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5
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6
DCMS Press releases, "Jowell acts to Protect Genuine Fans
from Unscrupulous Ticket Touts" and "Industry Put on
Notice to Sort out the Touts", 26 April 2006 and 17 July
2006. Back
7
Pollstar News Article, "Receiver Hopes Ticket Tout's A Test
Case", 23 March 2007. Back
8
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9
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10
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11
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12
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