Memorandum submitted by the Society of
Ticket Agents and Retailers (STAR)
1. STAR—THE
SOCIETY OF
TICKET AGENTS
AND RETAILERS
1.1 STAR, the Society of Ticket Agents and
Retailers, is the self-regulatory body for the entertainment ticket
industry formed by companies and organisations within the ticketing
industry. STAR promotes high standards of service to consumers
and seeks to enhance public perception of the ticket agents' industry.
1.2 During the 1980's and early 1990's a
number of hugely successful West End Musicals drove rising ticket
tout activity. Unauthorised dealers frequently employed misleading
or fraudulent methods to extract sums vastly in excess of the
face value of the tickets from members of the public. Visitors
to Britain were very often the primary target: their lack of knowledge
of the prevailing commercial environment, possible language difficulties,
and the fact that in most cases they would not be in London long
enough to attempt to seek redress, made them particularly vulnerable.
1.3 In response to this unauthorised trade
in theatre tickets, and its damaging malpractice, certain reputable
firms within the ticket agent sector decided to distinguish themselves
from the touts with self-regulation to promote high standards
of service from ticket agents to the ticket-buying public. STAR
was therefore created.
1.4 The membership of STAR is drawn from
the ticketing industry including event promoters and producers,
venues, ticket agents and tour operators who supply theatre breaks.
1.5 STAR is funded solely by annual contributions
from its membership.
1.6 In January 2005 STAR was invited by
the Office of Fair Trading to draw up Model Terms and Conditions
of Sale for use by its members. STAR took up this challenge and
for the past two years has worked with representatives from the
entertainment industry to draft terms which could be embraced
by the whole industry, not just members of STAR. We have consulted
other bodies such as the Concert Promoters Association, The Society
of London Theatre, The Theatrical Management Association and the
National Arenas Association.
1.7 STAR is keen to apply for approval of
its Code of Practice, which will embrace the model terms, under
the OFT's Consumer Code Approval Scheme. STAR needs to grow further—possibly
through the industry adoption of the model terms—and increase
turnover to make progress on a Code Approval application and ensure
STAR is able to meet the exacting standards of the OFT.
2. DIVERSITY
OF THE
TICKET INDUSTRY
2.1 The ticket industry serves various sectors
of the sports and entertainment industries. Crucially, each of
these operates in different ways. We hope that the Committee will
be mindful that not all sectors are uniform or face the same problems
or needs.
2.2 For example, West End Theatre is dependent
on a complex mix of complimentary sales channels in order to ensure
its commercial viability, six days a week, year round, without
the large financial contributions from corporate sponsorship or
the sale of Television Rights enjoyed, for instance, by some areas
of the Sports Sector. With its greater dependence on ticket revenue,
and the need to derive that revenue from a diverse range of key
markets, that alternate throughout the year, it is imperative
for the health of the West End that any intervention introduced
to ameliorate the problems caused by ticket-touting is specifically
framed with a view to ensuring the continued and hugely successful
distribution of product through legitimate channels.
2.3 As an indicator of the level and importance
of countering the touts, sales of West End Theatre tickets through
the primary market contributed £400,800,000 (ticket receipts
for Society of London Theatre's members) directly to the London
economy in 2006, and related income from tourism will have produced
benefits for London and the UK as a whole far in excess of £1.5bn
(Economic Impact Study of UK Theatre, Arts Council England, April
2004).
2.4 STAR's members predominantly sell tickets
for entertainment, rather than sporting venues in the calendar
year 2006 events, with the vast majority of members primarily
engaged in the sale of theatre tickets. We will therefore defer
to the specialist knowledge of the sports industries with regard
to the way that ticketing is operated for their industries and
the particular problems they experience as a result of the secondary
ticket market and touting. Given our own expertise in the entertainment
industry, the majority of our comments in this paper refer to
that sector.
3. TICKET AGENTS
AND BOOKING
TICKETS
3.1 A Ticket Agent operates to provide customers
with tickets for a wide range of events. The types of customer
served by Ticket Agents are many and varied: eg businesses seeking
to provide tickets for their own clients or staff; group organisers
putting together large parties for theatre or other entertainment
events; or individuals wishing to buy tickets for particular events
which are for sale through the agent.
3.2 There has been a revolution in the way
that tickets are made available to the public. In little over
20 years we have seen computerisation of box offices and telephone
and internet bookings have overtaken postal bookings and bookings
in person.
3.3 Customer expectations are high: distribution
of tickets must take these expectations into consideration. Ticket
buyers want the same facilities and levels of service that are
available in other sectors, making tickets available through a
number of different media and often at all times of the day and
night. In addition, measures must be taken to ensure that customers
benefit from systems that allow them to buy tickets with ease.
3.4 The facilities and staff levels required
to meet these levels of service are often too great and too costly
for entertainment producers, venues and promoters to bear without
the help of a number of ticket agents. Ticket agents are therefore
an essential element in the distribution of tickets and ensure
that consumers are able to purchase their tickets with as little
difficulty as possible, in the most economic way for the venue
and at the most reasonable price for the consumer.
3.5 Just as there are many types of customer,
there are many types of agent. Specialists operate in group sales,
hotel and inbound tourist sales, corporate business, discounts
and special offers, 24 hour call centres and internet sales. Some
agents specialise in specific activity sectors of the entertainment
industry—in sport, theatre or music.
3.6 STAR members only sell tickets with
the explicit authority of the event owner.
4. STAR MODEL
TERMS AND
CONDITIONS
4.1 As mentioned above, STAR has drafted
model terms as invited by the OFT. This came as a result of the
OFT's revised guidance on unfair terms in consumer entertainment
contracts in 2003 and their market study of Ticket Agents published
early in 2005 which found that some ticket agents were operating
terms which might be considered unfair under the regulations.
4.2 The majority of STAR's draft terms have
now been accepted by the OFT as being fair although there are
currently two matters causing contention:
Consequential Loss
It has been agreed that where an event is cancelled
and there is legal "frustration" of the contract, claims
for consequential loss would not flow. However, if an event is
cancelled for reasons other than frustration, the OFT maintain
that customers may be able to claim for consequential loss. They
therefore accept that the customer cannot claim against the agent
for his hotel, travel etc when an artist cancels because of, say,
illness but (s)he can claim when a concert is cancelled because
the promoter becomes insolvent. We do not believe there is a logical
distinction between these scenarios as the Agent has no way of
controlling either situation. In addition, the OFT has previously
supported one particular ticket agent's terms and conditions of
sale which allow the company to retain booking fees if an event
is cancelled on the basis that the cancellation is not the fault
of the ticket agent. Their approach on consequential loss is therefore
inconsistent.
Assignment or Resale
The OFT have previously suggested support for
STAR's draft term which precludes a ticket holder from reselling
tickets without the authority of the event organiser. This position
has since changed. It is agreed that the clause can stand in respect
of business to business transactions but the OFT is questioning
whether or not a ticket seller can remove the right of individual
consumers to resell tickets. The OFT have asked STAR to specify
events for which resale could be prevented for "special reasons"
and have not accepted our argument that this is unduly burdensome.
In addition, this term has the potential to allow event organisers
and the primary market to take action to help police the unauthorised
resales market and to send a clear message to the marketplace.
4.3 Customers should not be forced to accept
less favourable terms as a result of a resale transaction (eg
forfeiting the right to a full refund for cancelled events). The
original terms and conditions should be made known to the new
customer if a ticket is resold and should still be applicable.
4.4 The Concert Promoters Association has
indicated that once STAR's model terms are agreed with the OFT
then its members will also embrace them and will only make tickets
for their events available through STAR members. This move would
not only give stronger promotion to STAR, it would enable ticket
buyers to be afforded the protection of our Code of Practice and
an independent means of redress in the event of any problems with
their bookings.
4.5 STAR is hopeful that other bodies in
the entertainment industry will wish to embrace the model terms
for their events thus creating a degree of uniformity across the
various sectors and strengthening the function of STAR.
4.6 The draft terms deal with far more than
the right of resale and also cover customers rights in the event
of cancelled performances, health and safety issues, age limitations,
the reprinting of lost tickets, delivery of tickets, changes in
scheduled performances, conditions of admission etc.
5. RETURN, EXCHANGE
AND RESALE
OF TICKETS
5.1 An already precarious industry would
be made even more vulnerable by any requirement for customers
to be able to return unwanted tickets and obtain a refund. This
would leave event owners open to burdensome financial risk which
would be susceptible to public fashion and opinion. For instance,
should the latest West End show get bad reviews, a stream of ticket
cancellations would hasten the closure of the production and could
result in business failure and, consequentially, the usual chain
of financial problems caused by insolvency including unpaid suppliers,
unemployment etc. Likewise a change in musical tastes could render
today's top bands unpopular by the time of their next concert;
resulting cancelled tickets would cause similar problems in the
music industry.
5.2 A blanket returns policy would underwrite
the secondary market if it enabled unsold tickets to be returned
to the original point of purchase.
5.3 STAR cannot support any suggestion that
customers should be able to return tickets and obtain refunds
if they are unable to attend or change their mind about attending
the event. We do, however, believe that the entertainment industry
needs to re-examine how it deals with customers who cannot attend
for genuine reasons in order to provide a better level of customer
service. Many venues and event organisers claim that they already
offer to help customers who find themselves in a real predicament
but that they are concerned about publicising this service.
5.4 Custom and practice has been for ticket
sellers to impose a term such as "once purchased tickets
cannot be refunded or exchanged". STAR's draft model terms
and conditions reiterate this but also state that the ticket seller
may offer resale and/or exchange facilities.
5.5 There is some concern in the ticket
industry that strict and long-standing rules on returns and exchanges
facilitate the secondary market, ie because customers cannot return
or exchange tickets their only choice is to offer them for resale
in the secondary market. There is consequently an interest in
improving resale and exchange services where possible. This will
require a considerable shift in the attitude of not only the venues
but also producers and promoters who also have a say in whether
such flexibility can be offered to customers for their performances.
STAR is therefore working to highlight these issues and to try
and change practices in the industry to help improve the service
to consumers. As a first step, STAR has recently researched the
refund and exchange policies of around 250 venues, both their
publicly declared policy and the actual policy they operate when
approached by customers who need assistance.
5.6 STAR believes that in most instances
a customer who has paid for tickets from a seller authorised by
the event owner should have the right to resell them for up to
the same price as he paid for them (including any booking charges)
in order to mitigate his losses.
5.7 It is STAR's view that it is in the
customer's interest for resale transactions only to be carried
out through a route that is authorised by the event organiser
who should also be able to decide how resales can be conducted
for his events and whether this can be for an inflated price or
not. This is allowed for in the draft STAR Model Terms and Conditions.
5.8 In a resale transaction the ticket buyer
should be provided with certain information which enables him
to gauge the quality of the seat (block, row and seat number where
applicable), the price (face value of the ticket and the price
being charged).
5.9 It is reasonable for the authorised
reseller to take a fee or commission as part of the sale for processing
the transaction.
5.10 A system of authorised resales would:
— enable the growth of the authorised
resales market;
— enable a line to be drawn between
what is right and what is wrong in ticketing which is currently
a confusion for the ticket-buying public and to make that distinction
better known;
— enable customers to dispose safely
of tickets they are unable to use for a price up to the amount
they spent on the tickets;
— ensure that all applicable terms
and conditions are made known to the ticket buyer;
— ensure that the change of ticket
holder is known to the original seller and or event organiser.
For cancelled events, for instance, this would enable the new
purchaser to be able to claim any refund directly rather than
having to return to the reseller;
— ensure that event organisers are
able to control whether or not resales are permitted for particular
events; and
— ensure that there is less benefit
to the black economy.
6. TICKET TOUTING
AND THE
SECONDARY TICKET
MARKET
6.1 Underlying Causes
— There is a widespread view that tickets
can be purchased for an event that is sold out—it's just
a matter of finding the right person and paying the right price.
The excitement of an event and the chance of attending something
which may have a value for its scarcity drives "fans"
to do anything to purchase a ticket, even to pay considerably
over the face value ticket price without thinking twice or considering
the potential risks.
— In response to this culture of expectation,
many ticket sellers (both companies and individuals) have seen
the considerable profits that can be made in ensuring that it
is a market that continues to be fed. The rise in the number of
secondary sellers has been dramatic, particularly as individuals
have harnessed the power of the Internet and exploited online
auction sites. This in turn has seen a rise in demand on release
of tickets to high-selling events with the sole intention of reselling
them for profit.
— It is reasonable to argue that some
reselling is prompted by promoters and ticket agents not offering
refunds or exchanges and customers seeking to ensure that that
they do not lose out as a result. This does not, however, account
for them selling tickets for a price higher than they paid for
them.
6.2 The term "touting" is generically
applied to the resale of tickets in a manner which is inconsistent
with the standards set by the primary market. There is usually,
but not always, a level of consumer detriment associated with
this type of sale. This might include, amongst other problems:
— The tickets being sold have been
bought with the sole purpose of reselling them for profit resulting
in genuine customers being unable to buy tickets through the primary
market at the prices set by the event owner or their authorised
ticket agents.
— Customers may be misled on price
or there will be a lack of clear pricing information, flouting
the relevant Price Indication Regulations.
— Tickets may be of a quality inferior
to the indication given to the customer.
— Customers may suffer deterioration
in their rights (for instance not having the right to a full refund,
including booking fees, if the event is cancelled).
— Customers may not be informed of
all relevant terms and conditions in respect of the event. These
terms may cover important aspects such as age limitations on attendance
or health and safety. The resale transaction may be contrary to
the original terms and conditions of sale and may render a ticket
void.
— The tickets supplied may be counterfeit.
— Events may not actually yet be on
sale ("futures selling") or the reseller may not actually
have any supply of tickets available for sale but may (or may
not) try to source tickets once an order has been placed. This
often results in the non-delivery of tickets to customers.
6.3 This burgeoning secondary market is
populated with both businesses and individuals, the latter including
a growing number of youngsters who have latched onto the parasitic
opportunism that sites such as eBay and Gumtree can offer.
6.4 Securing tickets for the secondary market
often involves joining the queue when tickets go on sale and then
purchasing, often using elaborate networks, quantities of tickets
for high-profile events without alerting the primary ticket seller.
Very often the numbers of tickets that can be purchased in one
transaction are limited and the touts will therefore use friends,
colleagues and a variety of payment cards and addresses in order
to obtain more tickets. There are also accounts of the use of
electronic repeat dialling equipment to help beat the phone queues
and computer programmes to speed up internet purchases. (Most
major agents now have systems in place to combat this sort of
online activity.) As a consequence events sell out rapidly with
many tickets passing into the secondary market simply to be resold
to customers who were too far back in the queue.
6.5 Stealing a march on the genuine ticket-purchaser
isn't confined to the phones or internet purchases as purchases
are also made in person direct from the venue, often paying a
number of people to make the purchase and then collecting the
tickets from them later.
6.6 Touts and the impact of Touting:
6.6.1 It is important to note that there
are different types of touting:
— The Individual Internet Tout—opportunistically
buys tickets for resale online, eg through an auction site.
— The Gig Tout—solicits "spares"
from audiences attending events for resale to the ticketless.
— The Corporate Internet Tout—sells
overpriced tickets that he may or may not actually have. Faceless,
often unaccountable and untraceable.
— The Shop Front Tout—Often operating
from shops and booths in the West End of London, sometimes close
to outlets of ticket agents authorised to sell tickets for West
End shows by the producers and venues. These sellers suggest that
they have tickets available for shows but usually just take orders
from customers, predominantly tourists, charging considerably
over face value for tickets and then go to buy the tickets from
the theatre or other agents. Where possible they will buy the
lowest price seats and mislead customers into believing they are
better than they are. They might also ask the customer to unwittingly
sign a receipt which indicates that they provided the correct
information in respect of the Price Indication (Resale of Tickets)
Regulations 1994, irrespective of whether the customer has understood
that information or the requirements of the regulations. For high-selling
shows, these outlets will sometimes buy large volumes of tickets,
usually at the lowest prices and using a network of buyers to
avoid the notice of the primary market. This might also include
the purchase of tickets taking advantage of group discounts but
then reselling the tickets individually to customers.
6.6.2 Sometimes the law is broken by touts
through breaches of regulations but policing is limited and evidence
is costly to gather in order for enforcement agencies to take
actions.
6.6.3 When knowingly buying from a "tout"
customers are probably aware of the risks they might be entering
into and have a sense that they are doing something a bit "under
the counter".
6.6.4 When customers buy through the secondary
market without knowing they are dealing with "touts"
they buy in the belief that what they are doing is perfectly above
board and that they are dealing with a reputable company. This
is particularly true online where it is easy to create a sophisticated
virtual shopfront which engenders a mistaken level of confidence.
6.6.5 Much is made of the point that the
secondary market is important in making tickets available to customers
who missed out when an event first went on sale. What is ignored
is that many if not most of the tickets circulating in the secondary
market were purchased when the event went on sale, solely with
the purpose of feeding those tickets into the secondary market.
Not only does displace genuine customers in the queue of those
buying tickets when the event is put on sale, it also serves the
secondary market by reducing the number of tickets available from
primary sources, skewing the market and increasing the value of
their stock. This is done on the back of an event in which the
secondary seller suffers none of the risk.
6.6.6 The promoter or producer makes the
event possible in the first place and takes most of the financial
risk in so doing. Contributors to the event (writers, directors,
actors, composers etc) are often paid on the basis of receiving
a percentage of the ticket revenue. Sales made in the secondary
market, where that ticket could have sold fairly directly to a
customer wishing to attend, make no financial contribution to
the event and the additional revenue that can be achieved by reselling
tickets for profit cannot be included in the payment of royalties
to artists and creatives. There are also questions to be raised
about the contribution that secondary selling makes to the "black
economy".
6.6.7 The secondary market contributes very
little, if anything, to the entertainment industry, only to the
individuals or companies concerned. On the whole it does not sell
more tickets, it simply sells the same tickets twice with no additional
return for the event organiser or those directly involved.
6.6.8 Venues often have to deal with irate
customers who have arrived to pick up tickets from a tout. It
is not unusual for the tout not to make an appearance and for
customers to go without tickets and without seeing the event.
The customers do not always see the divide between venue and tout
and may try to hold the venue responsible. There are occasions
when this has led to aggressive behaviour.
6.6.9 Customers who do not receive tickets
they have purchased through the secondary market may be able to
reclaim their outlay if they have paid by credit card but payment
by other means can often lead to them losing their money altogether.
6.6.10 Customers may not be eligible to
reclaim refunds on tickets for cancelled events as the original
ticket seller will usually only refund to the customer with whom
they contracted in the first place.
7. PREVENTING
THE TOUTING
OF TICKETS
7.1 A number of preventive measures are
already undertaken by many STAR members:
— Monitoring of purchases, bulk ticket
buying etc.
— Strict rules on delivery.
— Limiting the number of tickets for
sale in a single transaction and/or to a postal address.
— Blocking known touts from being able
to make purchases (names, addresses, credit card numbers)
— Terms and conditions preventing resale.
7.2 There has been considerable interest
in the measures taken to prevent touting by Glastonbury Festival
which, in 2007, include the necessity of pre-registering to be
able to purchase tickets and the printing of each customer's photograph
on the ticket. Whilst this is an admirable solution for Glastonbury
and may work for other large scale events it is impractical for
the vast majority of performances:
— It is a costly procedure which would
have to be allowed for in the price of tickets.
— Many customers buy tickets for entertainment
events as presents for others.
— It requires all tickets to be sold
in advance. It does not allow for last minute purchases.
— It would be unpleasant and unreasonable
to require customers to go through both the booking and checking
procedure when, say, wanting to make a spontaneous visit to the
theatre.
7.3 If the principle is accepted that an
event organiser should have the right to dictate that tickets
that are resold will be void then there are likely to be easier
ways of policing this than customers having to provide ID.
7.4 Although STAR welcomes the Government's
desire to protect certain high-profile events from touting ("crown
jewel" events) we are concerned that action here will not
stem the wider problems of touting.
8. SUMMARY
8.1 There is an indistinct line for customers
between the high standards of ticketing offered in the primary
market and the risks present in the secondary market. Very often
it is hard for them to tell the difference without having a greater
understanding of the complexities of the industry. This blurring
offers opportunities to touts aiming to receive the greatest possible
personal or corporate financial benefit with the least possible
return to the entertainment industry. The line needs to be more
clearly defined.
8.2 There is no doubt that if unauthorised
ticket reselling was banned then the majority of problems suffered
by consumers in that market would be removed.
8.3 An unregulated secondary market causes
considerable problems for the industry and for consumers. STAR
believes that government intervention to protect consumers is
essential and we therefore support the call for legislation which
is being sounded from all corners of the sports, entertainment
and tourism industries.
8.4 The incorporation of anti-touting legislation
for the 2012 Olympics is a clear indication that touting is wrong.
The wording used to prohibit touting in the London Olympics Bill
succinctly summarises the position we would like to see the Government
take in respect of all cultural and sporting events, giving ultimate
authority for managing the ticket sales chain to the event organiser.
8.5 Any intervention should be specifically
framed to recognise the unique distribution needs of each sector
rather than "a one size fits all" approach that may
damage legitimate sales channels, and, by restricting supply,
actually improve the commercial environment of the ticket touts.
8.6 We know that customers need a way of
being able to dispose of unwanted tickets and we are seeking to
improve levels of service within the industry, particularly in
respect of exchange and authorised resale policies and mechanisms.
8.7 STAR has already undertaken considerable
work to improve self-regulation and standards in the primary ticket
market including the drafting of model terms and conditions of
sale. We need and would very much welcome further help from Government
to help sharpen our "teeth", strengthen and promote
our work, support our model terms and conditions and increase
the protection of the ticket-buying public.
June 2007
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