Select Committee on Culture, Media and Sport Minutes of Evidence


Examination of Witnesses (Questions 29-39)

MR HARVEY GOLDSMITH CBE, MR ROB BALLANTINE, MR GEOFF ELLIS AND MR GEOFF HUCKSTEP

26 JUNE 2007

  Chairman: For our next session can I welcome Harvey Goldsmith, Rob Ballantine, Chairman of Concert Promoters Association, Geoff Ellis the Chief Executive of DF Concerts and Geoff Huckstep, Chairman of the National Arenas Association.

  Q29  Philip Davies: If I was a promoter and determined to stop ticket touts from selling tickets to my events there are a number of things I would do. I would make sure that everybody was entitled to a refund, which does not always happen with every event; I would make sure that my tickets were available to be purchased in an evening and at unsocial hours, rather than at a time when people are at work to give people a proper chance of getting a ticket, rather than not; and I would make sure that I sold my tickets in blocks so I kept some tickets still for sale right up to the final week of the event. If you are so bothered about ticket touting, why is it that many of you do not do any of those things, because it strikes me that you really cannot take it that seriously in that case?

  Mr Ballantine: We could not be taking it more seriously, it is our living; it is how we make money. We are risk-takers; we guarantee income to artists; we guarantee income to venues; and we have to put money on the table to market and advertise the events. We want to sell as many tickets as we can, as broadly as we can; so tickets are on sale 24 hours around the clock. We would love to offer refunds. What we have guaranteed to do is, as soon as you give us some help against touting, we will issue a resale policy, whereby if you cannot attend the gig you take it back to the point of purchase and we will put it back on sale once the primary tickets are sold out so that the customers can come along to a one-stop-shop to buy the next tickets. Unfortunately what we will refuse to do at the moment is be a clearing house for touts because, using your analogy, if I was a tout and refunds were offered I would simply buy as many tickets as I could to as many concerts, try and flog them for as great a profit as I could, and any unsold I would go back to the box office the day before and say, "Sorry, I can't attend for these 120 tickets I've got, give me my money back".

  Q30  Philip Davies: The other thing you can do is restrict the number of tickets you sell to one person.

  Mr Ballantine: We do that. For example, the Take That tour that caused so much press is very much about groups of females going out from offices, schools or wherever in their groups for a night out and you need to be able to offer them six seats together; and even then we had complaints that it was not enough. As the BBC TV showed when they were filming the queues, there were just queues and queues of young teenage boys who were clearly taking the day off school, bunking off work and buying up as many tickets as they could to go straight onto the secondary market. It is very, very difficult to penalise the public and to prevent the public going to concerts in the way they want to go to concerts for the prevention of those few percentage who go with the intention of touting tickets.

  Mr Ellis: On blocks of sale it is quite common for outdoor shows to go on sale with the initial allocation of tickets and then, once the final capacity is agreed, more tickets are released closer to the event. With festivals quite often we have put tickets on sale straight after this year's event for next year, a limited number, and then we go back into the marketplace again in February or March. I think we cover all three of those bases. We have set up with Ticketmaster for T in the Park Tickets a ticket exchange programme, where again on a sold out event if somebody genuinely cannot go, or decides they do not want to go, Ticketmaster will give them a full refund on their ticket price and then resell the ticket to somebody else who wants to go.

  Mr Huckstep: In terms of access, the box offices at the venues are open seven days a week until 9pm so most people can access them during the day and after work.

  Q31  Philip Davies: This is marvellous because if I am an ordinary punter, and you are doing all these things, it means I have got just as good an opportunity to buy a ticket for an event I want to go to as a ticket tout. You have made it clear that I have got every opportunity to buy a ticket; so actually if I do not buy a ticket because I am a genuine fan but I might be at work and I do not really know that I can go so I hold off buying a ticket, when I decide I can go to this performance, under your regime I would be scuppered because all the tickets would have been sold. In fact touting gives me the only opportunity I have got to go to that event, because I can look up and find that somebody is actually selling me a ticket; and I can make a decision whether or not I want to go to that event. I can make that choice. If I do not want to pay the price they are asking that is my choice. Actually touting gives me the only opportunity I have got to go to your event, because otherwise it all would have been cleaned out by genuine fans?

  Mr Ballantine: The great opportunity you and the rest of this Committee have is to stop this, because only you people can stop these touts getting hold of the tickets in the first place. We have already seen the statistics that 60% of people selling on eBay sell one or two tickets and that is it. What is a ticket tout? A ticket tout is an opportunist. A ticket tout is someone who does manage to get those tickets; and it is so easy to sell these days because you are marketing to every single computer in the country by one listing, it is easy for anyone to become a ticket tout. You say you have missed out on the opportunity—your option here today is to say, "Okay, now we understand what this is about let's put a stop to it; let's not allow these people to tout the ticket; and let's have a fair distribution to everybody". Because there are only so many tickets for the pop groups that go on sale; and there are only so many people who want to see that group. The fact is, we get those tickets to the fans that want to go; however, with the current model possibly 40% of them go through the hands of someone who is marking the ticket price up; but they will eventually reach the fans who want to go to that concert, and what we are asking you to do is just eradicate that middle layer. Everything you have just outlined is there waiting for these fans to buy their tickets whenever they want by whatever method they want.

  Mr Goldsmith: We are a business. We are here 365 days; we are not just for the odd concert that you read about in the newspapers causing a furore or just had huge demand. We are actually a business and we are here all the time, and we are presenting events and concerts all through the year to many fans who are real fans of music; they buy the records; they follow the artists and they come back more than once. They want to be able to see their heroes and those artists they support. They do not want to pay inflated prices for them; and we spend a huge amount of time when we define what our ticket prices are on how that is made up. It is not just plucked in the air. Ticket prices are a combination of what the costs are; what the breakeven point is; what a fair margin is; what we think that act can stand in the marketplace in a fair way. We are not out to rip-off or take advantage of our customers. I know it sounds a bit strange, because in the way you are asking the question you are saying, "Okay, everybody should be able to resell tickets. They should do what they want". That is not our business. We are a business; we are not here to supply parasites who are there to monopolise and capitalise on what we are trying to do as an industry. That industry is pretty far and wide. Not only do you see the front face of it as a concert or what you read about, but remember what goes into getting those artists to that—the employment values; the production values; and all the rest that goes in it, that is what supports our industry. We are not here to create a marketplace for someone else who puts nothing back and just takes out.

  Q32  Philip Davies: Finally, what evidence have you got to eliminate ticket touting? What evidence have you got that any government legislation or any ban would eliminate ticket touting? If we stopped people on eBay selling tickets are you really na-­ve enough to think that would be the end of ticket touting, and it would not just be driven underground? Who is going to police this? Are you really asking that my local police force that are stretched for resources, and people who ring up with burglaries and cannot get somebody to come, you are saying that my punters should expect the police to scrap all their burglaries and their shoplifting and come and rescue you from the situation you have got yourselves into?

  Mr Goldsmith: The police are there anyway. I went to Wembley Stadium two Saturdays ago and from coming out of the station—because it was the first time I had been there and wanted to experience it as if I were regular customer—I counted 23 policemen with their flak jackets ready for World War Three, machine guns and God knows what else—Wembley Station. Walking down the steps, more policemen. I counted about 12 or 14 Wembley stewards also patrolling up and down. Then I was confronted, at my count, with 43 ticket touts who were harassing people coming through trying to buy, trying to sell; trying to do some deal; pushing people, "Can you buy this one". The 23 policemen were there whether the touts were there or not. All they had to do was look one stage further and protect the public who genuinely wanted to go to Wembley Stadium to see a show, who were not there for a riot and do not want to be harassed by these people.

  Mr Ballantine: Actually we were paying for that police service to be there. No, we are not asking for the police to police anti-touting. We have said all along we will do this ourselves within the industry. If you say to the industry, "Okay touting is now illegal"—as the IOC demanded that you have done for the Olympics, which is a fantastic step and should be taken forward with every major event in this country—if you say that, well, straightaway we are able to police all these bedroom touts on eBay and the majority of them will stop because they are not lawbreakers, they are opportunists. If it is against the law they will stop straightaway. Look at how many tickets will be touted for the Olympics—hardly any. No, it is not going to go away completely, we are realists. We know there is going to be some underground stuff, but at least if you are buying a ticket from a tout on the street you can see he has got it; not these fraudsters who advertise tickets, none of which exist but they are asking for your money.

  Q33  Mr Sanders: That is a criminal offence already. If you put on an act in the Wembley Arena that could have filled the Wembley Stadium you are going to get touts; but if you put an act on in Wembley Stadium that could only fill the Wembley Arena you are not going to get touts, so it is actually about supply and demand.

  Mr Ballantine: Yes, it is but we are not a supply and demand industry. What we are trying to do is fill every venue and leave a small demand left over and hope that we can entice those people either to the next concert we are promoting, or the next tour that that band are doing. You would not enjoy a concert if you went along to Wembley Stadium and there were 10,000 people there because there is no atmosphere. You have to generate full houses and get the atmosphere going. It is a very, very careful balance that we do; and we keep those ticket prices low and affordable to ensure that those venues are full and full of fans who want to spend their money on concerts; want to go to ten concerts a year and not two concerts because it is costing them £250 a ticket.

  Mr Huckstep: You are assuming that all the secondary agents are genuine sellers—they are not. Up and down the country the National Arenas Association covers venues from Aberdeen and Glasgow, down to London, Brighton, Birmingham, Sheffield and Nottingham. At every show we have issues with people who turn up who have bought tickets through the secondary market, whether it is eBay, tickettout.com, World Ticket Exchange. We have the problems on the night when these people have turned up, often having travelled hundreds of miles and their ticket is not valid; or the guy has not turned up; or it is in the wrong seats. I can tell you now, going to an event is an emotional thing for young people. If they cannot get into that show and you know they have got a ticket and you have to deal with that on the night, as we have to, I can tell you now that is not a very pleasant experience. It also deflects my staff away at Nottingham from dealing with genuine people that need customer services. You are actually assuming that the secondary market is a genuine market and it is not. It is full of fraudulent people.

  Q34  Helen Southworth: In those terms then what would you recommend in terms of the code of conduct for resales?

  Mr Ballantine: For a resale what we are planning to do, what we cannot do is offer complete refunds. For example, Glastonbury last weekend, a £20 million outlay to build a site, pay the artists, get everything ready, torrential rain the week before; ten thousand people probably would claim they had a relative die or something meant they could not attend and they would ask for a refund; that would make the Glastonbury organisation go bust. That is £1.5 million they need to refund and people do not make those sorts of profits. That festival would end overnight. We therefore cannot issue complete refunds for people who simply change their minds because we build the event depending on the ticket sales. Once a promoter guarantees the artist and the venue the money, then the artist goes and designs that tour, the expenses are taken on and that money is on the table. If then the customers come up and ask for a refund two days before and you have not got a chance to resell them that is where promoters would be going bankrupt left, right and centre. What we will offer though is a resale policy if you cannot attend the event for whatever reason, as soon as there is any sort of legislation to help out because otherwise we are simply going to be acting as a clearing house for touts.

  Q35  Helen Southworth: Just give us the detail of what this policy would contain at some point in the future then?

  Mr Ballantine: The customer goes back to the point of purchase where they bought their ticket from and says, "I can't attend the gig. There's my ticket back". You should get the full face value back because the ticket will be offered for resale; so as and when tickets are sold out all your tickets go on sale. Consumers who have not got tickets then only have to check with the primary ticket agent—usually the venue box office so they do not have to go through viagogo and Seatwave and eBay, and all these people making an extra layer of margin out of it. They go back to the primary point of sale always and they can ask exactly where the ticket is located.

  Q36  Helen Southworth: But you would only do that when all your other tickets had been sold?

  Mr Ballantine: Of course, that is the only model we can support, otherwise the touts are just going along and they will buy a load of tickets and when they do not sell them they will take them all back to us. We cannot finance that. It is bad enough having to cope with touts in the market now, let alone us being the clearing house for them and financially supporting them.

  Q37  Helen Southworth: Is that an industry agreement?

  Mr Ballantine: Yes, absolutely everybody. You have seen the letter we put in, I hope. I have never seen so many signatories come from so many competing parties, all united. The strength of feeling of this is incredible out there. It is absolutely unbelievable. The industry feels that this is a real turning point for us, and we are desperately trying to hold on to our members. We do not operate like the RFU or Wimbledon, who commendably look after the schools. The CPA are a bunch of individual entrepreneurs and we are trying to hold everybody together until we get through this process before our members say, "I'm sorry, but I've had enough of everybody else making profits on the secondary market. We are now going to auction percentages of our tickets". Those promoters will just explode onto the market and replace the touts that are selling on the secondary market, and the public is going to lose out hugely. That is why we have come here today to say, "Please protect the public from what is an inevitable economic explosion".

  Mr Goldsmith: In essence, I guess I am stating the obvious, but we are the people who are investing in our industry. We are nurturing the talent right the way through to hopeful success where there is that kind of demand. Equally, we have to have a balance. All alongside our industry, as I said before all the people employed alongside it, we also nurture and develop. We do consider ourselves to be a professional body and we are genuinely trying to deal with this. Not only is it affecting the genuine music and sports fans but, as you well know, in the West End with theatre tickets, people are coming in from all over the world and part of their experience is to go to the West End and go to events, even to go to the very popular art exhibitions, and what they are faced with is this whole secondary touting market. It is doing all of us a disservice.

  Q38  Helen Southworth: At the moment people could say that your market is what is creating the markets for touts?

  Mr Ballantine: Yes, because we have priced realistically.

  Q39  Helen Southworth: Your market is currently creating that market. Why should not fans who cannot use tickets currently be offered a resale just because touts might be interested?

  Mr Ballantine: They are. Traditionally over the years we have always given refunds to fans. We cannot openly say it but when people come back for genuine reasons, do we give refunds? Yes; especially on sold out shows because we know we can get rid of the tickets straight away. There are ticket exchange mechanisms out there; there are ticket refund mechanisms out there; what we are saying is, "Let's end all this confusion. We are going to go with one resale policy that every single member will sign up to". It is going to be out there and published that every ticket will be sold with a stamp from the Society of Ticket Agents and Retailers (STAR); so we are hoping that STAR will become as well known as ABTA amongst consumers, and consumers will know to only go to a STAR agent. Where you say that we are creating that market, I do not know how many of you have heard of The Fratellis, how many of you have heard of Muse, how many of heard of The View; however, you have all heard of the Arctic Monkeys. This is a band that has got this huge media hype going on around it: does that give us the right, therefore, to charge £60 for the Arctic Monkeys' tickets because everybody knows about them and there is this huge media hype? We are promoting them outdoors in a couple of weeks time: £28.50 for a ticket. That is not market value but the band have only just released their second album; they know they have got to reward those fans who have been following them around the clubs paying £7.50 and £12.50 building them up to the place where they have one of the biggest selling albums of last year in the country. Those fans need to come along and feel that they have had genuine value for money. They are getting five bands for £28.50 and probably one of the greatest concerts this summer. We know we could have charged three figures for that, but those fans would then not necessarily come back. They will say, "Well, it was alright but it wasn't worth a hundred quid", and the damage is done.

  Mr Ellis: Sustainability is very important for our business because we are developing new talent as well as the Arctic Monkeys. We are bringing along the next Arctic Monkeys. We need music fans to have enough money to go and see the club show that might only be £5, £6 or £7 and is not sold out. We need money out there in the marketplace to support that, as do the sporting bodies. The economic impact is also greater; if somebody can attend six concerts at £30 rather than one concert at £180 a go, they are going out more often and therefore they are spending more money, and therefore there is the drip-feed factor throughout the tourism industry as well.

  Mr Huckstep: Can I just endorse what Geoff has said there. It costs a fantastic amount of money to build these things, we have seen it with the Wembley Stadium. The Nottingham Arena was £43 million of local investment, city council investment and Sport England investment. That has got to be sustained. We rely on the concert promoters to bring us regular business. If the fans were priced out of the market then the future for Nottingham Arena and other arenas is very much in doubt.


 
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