Memorandum submitted by Ticketmaster UK
EXECUTIVE SUMMARY
Ticketmaster is the largest primary agent in
the UK ticketing market. As such, we are well placed to analyse
and comment on the growing problem of ticket touting.
Touting has a damaging effect on the events
and industries for which we sell tickets, as well as on consumers,
fans and the economy as a whole. The growth of the Internet, and
in particular auction sites, has led to an explosion in the unauthorised
sale of tickets for events.
Ticketmaster UK has in place a number of mechanisms
to prevent the touting of our tickets, and we are utilising newly-available
technologies to ensure that as many protections as possible are
in place for the tickets that we sell. However, while ticket touting
remains permitted by law, we are unable to do more than scratch
the surface of the problem. For example, 7,000 tickets for the
15 recent Prince concerts in London were on sale on the Internet
shortly after the shows selling out.
The scale of touting, and the problems which
it creates, has reached the stage where government action is required
to tackle the issue. The principle is already in place in UK law
for football matches and the 2012 Olympics, and we strongly argue
for similar legislation outlawing the unauthorised resale of tickets
for all events.
INTRODUCTION TO
TICKETMASTER UK
1. Ticketmaster UK, the British arm of the
global Ticketmaster company, has been established for 25 years,
and employs over 700 personnel in four sites across the UK. We
provide ticket sales and distribution through channels such as
www.ticketmaster.co.uk. Ticketmaster also provides box office,
access control and technology products and services to a broad
range of venues across the UK including theatres, leading arenas,
stadiums and festivals, aimed at maximising consumer experience.
2. The Ticketmaster Group is the exclusive
supplier of ticketing services for the 2008 Beijing Olympics,
Rugby World Cup 2007 and Euro 2008, and also previously ticketed
the Athens 2004 Olympic Games and Paralympic Games. Ticketmaster
UK sells for over 60,000 events a year across all areas of the
UK entertainment sector, including theatre and arts, music and
sporting events.
3. Our primary objective is to offer our
clients ticketing services and marketing support to enable them
to sell as many tickets as possible for their events, with fair
and equitable distribution. Our ticketing services are tailored
to respond to each of our client's specific business requirements
and we believe that this is reflected in our response to the unauthorised
secondary ticketing market.
4. We believe that our clients, who have
invested in the event, should be able to control where and how
their tickets are sold, and at what price, not the unauthorised
secondary market. Ticket touting is bad for our business, but
it is also bad for consumers, fans, tourists, and UK plc as a
whole. We fully accept our responsibility to self-regulate our
business and to achieve fair distribution of tickets on behalf
of our clients to the benefit of their consumers. However we firmly
believe that the scale of the emerging unauthorised secondary
market requires urgent legislation to support the entertainment
sector if we are to be successful in responding to this issue.
5. As such, we are working closely with
the Department of Culture, Media and Sport and our clients across
the entertainment sector to push for greater restrictions on touting,
and we very much welcome the Committee's interest in this area.
We also actively participated in and welcomed the OFT's 2004 market
inquiry into ticket agents. We are also responding to this inquiry
through our membership of the Society of Ticket Agents and Retailers,
and as part of the industry-wide coalition on touting. However,
as the largest primary ticket agency operating in the UK market,
we believe that our own detailed submission to this inquiry would
be helpful to the Committee. Ticketmaster would also very much
welcome the chance to follow up this submission at an oral evidence
session.
INTRODUCTION TO
THE TICKETING
INDUSTRY
6. The ticketing industry in the UK provides
a service to both event promoters and consumers, by providing
an effective and efficient means of distributing tickets. Event
promoters may benefit from the specialist service a ticketing
agent can offer them, including increased tickets sales, technology
and incremental marketing support. Consumers benefit from easier
and more convenient access to tickets due to the enhanced infrastructure
ticket agents can offer, which is not always financially viable
for promoters and venues to provide.
7. There are two broad categories of ticket
agent, those that operate in the primary market, and those that
operate in the secondary market. Primary agents, such as Ticketmaster
have agreements with event promoters and venues to sell tickets
for entertainment and other events. Most primary ticket agents
are members of STAR (Society of Ticket Agents and Retailers),
a self-regulatory body whose members agreed to comply with a code
of practice. Ticketmaster was a founding member of STAR.
8. Secondary agents obtain tickets from
a range of sources for resale to the public. Prices are not regulated
by the event promoter and ticket prices can be substantially higher
than the face value of the ticket. A secondary agent re-selling
a ticket without the authorisation of the event owner or primary
agent breaks the terms and conditions of the ticket and as such
is engaging in ticket touting.
9. The current STAR terms and conditions
authorise resale of tickets at face value (for example to a friend
or colleague if a person can no longer attend an event). Ticketmaster,
and the industry, do not view this as touting as this not-for-profit
resale is authorised by the terms and conditions. We view this
as a common sense approach, and would caution against the imposition
of any regulations, which cover "friend-to-friend" face
value resale of tickets.
TICKET TOUTING:
WRONG IN
PRINCIPLE
10. The unauthorised resale of tickets for
profit does not promote fair and equitable distribution of tickets,
and drains tickets away from the primary market, thus restricting
the opportunity for genuine fans to purchase them legitimately.
11. Event promoters and stakeholders make
enormous investments in producing their event, and the unauthorised
market benefits from that and the popularity of the event, despite
having made no investment themselves. The opportunity cost of
touting is also great, as the touts are receiving income that
could otherwise have gone to the entertainment or sports industries.
The damage this does to event owners' reputations with consumers
and fans, as well as the tourism industry and the economy as a
whole, has been well documented in the broader submissions, which
the Committee will be receiving.
12. The rapid growth of the Internet has
affected the market in two ways. It has expedited the purchase
of tickets, and the efficient service Ticketmaster offers means
that whole arenas can sell out in a matter of minutes. This is
of great advantage to the consumer who benefits from such efficient,
fast and effective systems. It also allows greater equality of
access to tickets for those in society who may not have the physical
capacity or lifestyle to access tickets through traditional methods,
such as queuing for a long time on a working day.
13. However, this equality of access does
also allow for organised and sustained abuse of the system, and
the Internet has greatly exacerbated the rise of ticket touting.
This occurs both through individuals (selling on auction sites
such as eBay) and unauthorised secondary agents such as tickettout.com
and getmetickets.com. The dangers of purchasing tickets from sites
such as these was clearly shown by the demise of both companies,
which left thousands of their customers with no tickets and substantially
out of pocket.
14. Increasingly individuals either buy
more tickets than they need as they know they can re-sell the
extras for profit on internet sites, or purchase them with no
intent of attending the event in the first place. In some cases,
this involves highly organised touting operations, which utilise
sophisticated computer technology or "call centres"
to bombard ticketing websites and phone lines to buy up a large
proportion of tickets as soon as they are on sale. We constantly
review our technology and upgrade our website to deter these activities.
For example, every customer is now required to enter a unique
verification code as part of the purchase process, which is designed
to prevent multiple automated bookings.
15. Some of the secondary agents who are
positioning themselves to the public and indeed to the DCMS as
consumer orientated and legitimate resellers are now also dealing
in "futures" for many events (ie selling tickets or
allowing them to be sold through their site, when in fact they
or their seller do not have the tickets). We consider that this
is another example of the consumer being potentially placed at
financial risk through these unauthorised sites.
16. eBay publicly argues that they and other
unauthorised ticket resale sites offer consumers an effective
means to resell their tickets, if they can no longer attend an
event due to a change in their personal circumstances. We believe
that, as the majority of tickets are offered for sale within 24
hours of the ticket purchase, most tickets are sold are for personal
gain, with profits unfairly going to the individual instead of
the event stakeholders who have made substantial financial investment.
THE SCALE
OF THE
PROBLEM
17. Our customers are becoming increasingly
frustrated that they are unable to buy tickets through Ticketmaster
as they are sold out and then find within minutes that they are
being offered for resale on unauthorised resale sites. The scale
of the problem is growing fast, and is demonstrated by, but not
limited to, these examples:
18. Ticketmaster helped one of its clients
sell out for 15 shows for Prince at The O2, London on Friday 11
May. From the 14-17 May, we analysed just four of the main unauthorised
secondary ticket sites to establish the level of tickets offered
for resale. We identified that over 7,000 tickets with a total
face value of £223,000 were offered for resale above face
value for a total posting value of £983,000.
19. Within hours of the highly anticipated
National Football League (NFL) game between the Miami Dolphins
and the New York Giants at Wembley Stadium, over 50 postings selling
tickets were found on eBay alone.
20. A search for tickets for gigs and concerts
and festivals available for sale on eBay in the United Kingdom
on a single day (30 May) found over 13,000 postings listed. With
an average of at least two tickets being available for sale on
each posting, this equates to a conservative estimate of 26,000
tickets available for sale on just one unauthorised auction site.
21. These figures clearly display the potential
size of the unauthorised market, and the potentially significant
level of revenue being unfairly directed away from the music industry
and its future development. The below correspondence—a brief
sample of emails and letters we have received on this issue—offers
qualitative evidence of how the unauthorised market affects our
customers:
"I would like to make a formal complaint
about the distribution of the Pearl Jam tickets for the Wembley
Arena gig (18 June 2007). The morning that the tickets were put
on sale they sold out within 30 minutes, although I understand
that this is not your fault I was very annoyed to find that the
majority of the tickets had actually gone to touts. I am sure
that you have some responsibility in ensuring that the tickets
do not get sold to touts [...]. I decided to buy two tickets from
Tickettout.com as there seemed to be no other way I would be able
to get hold of any tickets.
I have today received notification of the above
company going into administration, which means that not only will
I not receive the tickets I ordered but also I will not get any
form of refund. Having booked these tickets so far in advance
I have also arranged accommodation and transport, which have also
been paid for to the amount of £100. Unfortunately the accommodation
and transport cannot be cancelled [...].
I would have much rather bought my tickets from
your company, however this choice was taken away as the majority
of the tickets were sold to touts [...]. I also wish to know what
kind of action you will be taking against these companies to ensure
this doesn't happen again."
"I successfully managed to purchase tickets
through Ticketmaster for The Police (in Manchester) when they
went on sale on Friday 9 February. The event was sold out within
30 minutes. Imagine my disgust when I went on the eBay website
later that morning—it was full of people selling their tickets
at hugely inflated prices. There are many genuine fans out there
that can now only see the concert by feeding these unscrupulous
sellers. It was exactly the same situation after the Take That
tickets sold out [...].
Now I realise that you are not the only firm
selling tickets but eBay have basically informed me that as an
individual they will ignore my plea to stop allowing the sale
of tickets on their site[...]. May I ask you to at least look
into this legalised touting and prevent further abuse of your
company. After all—these people are offering to sell items
that they don't (yet) possess."
22. Currently we have no powers to protect
consumers from our tickets being re-sold as unauthorised auction
sites are not legally bound to display seat and booking details.
The above examples represent a small fraction of the daily instances
and contacts we receive from our customers, who are understandably
concerned about the level of tickets being resold through the
unauthorised secondary market.
NEW APPROACHES
TO TACKLING
TOUTING
23. Ticketmaster is developing a number
of responses to prevent the unauthorised resale of tickets, which
are designed to offer our clients choice, depending on their specific
requirements.
24. Firstly, all tickets sold by Ticketmaster
UK are sold subject to our Purchase Policy, which represents that
tickets are for personal use only, and that tickets should not
be purchased as part of any form of business or commercial activity,
and in particular may not be offered for resale or resold unless
it is expressly authorised by the Event Partner.
25. For some events Ticketmaster has worked
pro-actively with our clients to cancel tickets offered on unauthorised
resale sites where the booking can be traced through the information
supplied at the time of resale. Ticketmaster does not independently
make the decision to cancel tickets, although we frequently encourage
our clients to do so. At the direction of our clients, if resale
violates our client's terms of use, we will assist them in cancellations
to uphold their terms of use.
26. We also have procedures in place to
endeavour to prevent multiple applications for tickets, and our
team is able to identify any suspect applications and cancel the
tickets where appropriate. We also work with our clients to set
ticket limits for their events, so it is not possible for individuals
to bulk buy tickets, and whenever possible we restrict purchases
for events to one credit card per address. We distribute tickets
as close to the event as possible to prevent the opportunity for
fraudulent tickets to enter the market.
27. In response to the burgeoning activities
of the unauthorised secondary market, Ticketmaster is committed
to developing a range of innovative products for our clients that
will help them combat ticket touting. For example, Ticketmaster
has been recommending the implementation of a TicketExchange mechanism
to our key venue and event organiser clients, as we do appreciate
that there is a need for a safe and secure mechanism for genuine
fans to exchange tickets, when they legitimately cannot attend
an event.
28. TicketExchange offers our clients and
customers a legitimate alternative to the unauthorised secondary
ticketing market. Using TicketExchange at Ticketmaster.co.uk,
buyers simply select the ticket(s) they want based on price and
seat location. The sale is completed through the trusted Ticketmaster
system with no risk to the buyer. Only tickets originally purchased
through the Ticketmaster system are eligible for resale and those
tickets may only be resold at face value.
29. The key difference between TicketExchange
and other re-sale sites is that TicketExchange is the only event-authorised
resale site. This means that all tickets resold on TicketExchange
are processed through Ticketmaster's authentic booking process,
with the full consent and knowledge of either the venue or the
event organiser.
30. TicketExchange works hand in hand with
our access control systems, AccessManager and eEntry. These systems
scan bar-coded tickets in real time and authenticate event admission.
The system denies access to fraudulent tickets and those tickets
where it has been possible to invalidate them if they have been
resold against the terms and conditions of sale.
31. Our TicketExchange mechanism offers
our clients the opportunity to allow their customers to resell
their tickets at face value or at above face-value. To date, our
clients that have adopted TicketExchange in the UK have opted
for the "face value" model. However, if the activities
of the unauthorised market continue un-checked, it can only be
a matter of time before our clients want to capture the value
of the secondary market and channel it back to their industry.
AUTHORISED TICKET
AUCTIONS
Ticketmaster also auctions tickets for certain
high profile, high-demand events. There are a number of fundamental
differences between our auctions and the activities of the unauthorised
secondary market. Firstly, Ticketmaster cannot initiate its own
auctions and any such activity is undertaken upon instruction
from the event organiser. Ticketmaster creates an opportunity
where fans have the ability to get tickets to the shows they want
in a safe, open and transparent environment in the primary market.
Ticketmaster Auctions represent a guaranteed
transaction for the consumer. The consumer buys their ticket from
Ticketmaster, the reliable source, and has the security of knowing
the ticket will arrive, the exact location of the seat, and be
genuine. The fundamental differences to auctions held on sites
such as eBay are that Ticketmaster Auctions are authorised by
the event holder, are legitimate and the consumer is protected.
Auctions can be scheduled by the client to coincide with the greatest
demand, such as when the event goes on general sale. We believe
this works to undermine the activities of the unauthorised secondary
market by providing a legitimate alternative in the primary market.
Another key differential from the unauthorised
market is that the money goes back to the promoters, who have
invested their time and money in staging the event, which ultimately
is a much fairer proposition for all parties involved.
A small percentage of tickets are sold in this
way, and our clients determine the pricing of any tickets that
are offered for sale. Additionally there is often a value-added
element, such as guaranteed front row seats, or proceeds to go
to the promoter's or band's charity of choice. Ticketmaster is
also working with our own nominated charity, Nordoff-Robbins Music
Therapy, to hold auctions on their behalf with proceeds going
back to them.
32. The unauthorised secondary market is
burgeoning, but not in a way that offers protection to the consumer
or fair recourse to the event stakeholders. Our services are intended
to offer a legitimate alternative to the unregulated world of
online ticket resale. TicketExchange guarantees the seller is
paid and the buyer gets valid tickets. Our Auctions ensure, unlike
some other unauthorised auction sites, that the buyers are not
purchasing a worthless ticket that may not exist or be valid when
they arrive at the event.
THE NEED
FOR LEGISLATION
33. As set out above, Ticketmaster is working
hard with our clients to provide legitimate and safe alternatives
for our customers. However, given the scale of the problem there
is only so much that we and our clients can do to tackle touting
without appropriate government intervention.
34. We see this taking the form of legislation,
extending the current regulations already in place for the UK
football market (which appears to work effectively as a deterrent)
and the 2012 Olympics. We see no reason why DCMS' decision to
enforce the IOC contract for the London Games, by making ticket
touting illegal on the face of the London Olympic Games and Paralympic
Games Act 2006, cannot be extended to all events for which tickets
are sold. Indeed, the drafting of Section 31 of the Act, which
prohibits touting, would be an excellent template for future legislation
in the wider ticketing area.
35. We believe that legislation must prohibit
the unauthorised resale of tickets for all events, not just for
"crown jewel" events, and provide the framework and
opportunity to legally enforce our terms and conditions for sale.
With appropriate legislation, the consumer will be offered enhanced
protection and greater legitimate choice.
36. We would therefore urge the Committee
to recommend strongly that the Government act to make the unauthorised
resale of all event tickets, at higher than face value, a criminal
offence through primary legislation.
June 2007
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