Memorandum submitted by Seatwave
1. HOW DOES
SEATWAVE WORK?
1.1 Seatwave does not buy or sell tickets.
We exist purely a marketplace where people can find the tickets
they are looking for or sell tickets they no longer need.
1.2 Our business model provides an important
opportunity to break up the ticket selling cartels currently in
operation and democratise markets by putting control in the hands
of fans.
2. ABOUT SEATWAVE
2.1 Based in London, Seatwave is an online
marketplace w ere people can buy and sell tickets for concerts,
theatre, sports and other live events. Providing a safe and secure
environment for fans, Seatwave was launched in February 2007 and
already as more than 400,000 tickets on sale, 20 times as many
as are available on eBay.
2.2 According to Hitwise's April 2007 statistics,
[33]Seatwave
is already in the top 15 of all websites selling entertainment
tickets and leads all other online exchanges. We are passionate
about building a strong marketplace for tickets, offering our
customers the safest as well as the most competitive environment
for them to buy tickets for all kinds of event . We aim to normalise
and legitimise the secondary ticket market in the UK and Europe.
2.3 Seatwave is in the business of getting
passionate fans to the events they love by making it easier and
safer for people to buy and sell tickets. Our goal is to build
the biggest, most trusted and most inspiring marketplace for event
tickets.
3. HOW DOES
SEATWAVE MAKE
MONEY?
3.1 We charge premium fees for Seatwave's
services. Our commissions and fees are fairly similar to some
of the other less consumer-friendly ticketing services but with
good reason. We believe that Seatwave's offering is, and will
continue to be, superior to any other ticketing exchanges. To
offer better quality service than our competitors, we need to
able to attract great people to work for us and in higher numbers
than other operators. If we are unable to offer a service that
is better than others, we would have no right to charge premium
fees.
3.2 Seatwave makes the same amount of money
whether tickets are sold or bought at face value or double face
value. We encourage sellers to list their tickets at prices that
reflect previous and current demand—we do this by providing
up-to-date information from our site—but ultimately Seatwave
has no control over the price the seller settles upon. We charge
sellers only when a ticket is sold—there is no charge for
listing a ticket on the site.
3.3 Consumers do incur a cost when using
Seatwave but there is a reason for this—and we are totally
transparent about it. If Seatwave customers are not happy with
our service, we will go out of our way to address the problem
and, where appropriate, we will pay the event goer the full price
of the ticket plus half of what they originally paid for the tickets.
4. WHAT ARE
THE UNDERLYING
CAUSES OF
TICKET TOUTING?
4.1 The secondary market is a result of
the failure of the primary market—restricted supply and
the resulting excess demand is largely caused by primary suppliers
(eg event promoters). Sporting events such as Wimbledon and the
Six Nations lead to massive demand but much of the supply has
historically been limited to privileged "inner circles"
in the respective sport and many tickets are sold via corporate
hospitality deals. Similarly mismanaged distribution techniques
deployed by event organisers such as poorly managed phone lines
and websites lead to fans being unable to access tickets when
they are first released.
4.2 The "face value" of tickets
when they are first released to the public by promoters often
does not reflect the market value which tickets would ultimately
achieve on the open market. Promoters make an increasing percentage
of their profits through the sale of merchandise and ancillary
goods. So when underpriced tickets are resold they sell above
face value—which actually reflects something closer to their
true value.
5. THE CHARACTERISTICS
OF THE
SECONDARY MARKET
5.1 The secondary ticket market in the UK
is primarily an informal market involving both individuals and
businesses, selling both off and on-line. It is currently estimated
to be worth around £1 billion in the UK alone and £3.5-5
billion Europe-wide (source Dow Jones News). [34]
5.2 Ticket resale is a legitimate and lawful
industry in the UK, barring two important exceptions sales of
football and 2012 Olympics tickets. Whilst a signifies the proportion
of sales are by "businesses" it is important to recognise
that many sales are made by individuals who simply wish to resell
tickets they no longer need for which they are unable to get a
refund—many of these sales simply recoup the face value
of the ticket originally sold or are even made at below face value.
6. WHAT IS
A TOUT?
6.1 The term "tout" refers to
someone who buys tickets to an event in order to resell them at
a profit. "Tout" may also refer to individuals and businesses
that mislead consumers by offering to sell tickets which they
do not actually have. The former activity is a perfectly legitimate
one, even if the term "tout" has negative connotations
for some. The latter activity is fraudulent as such and should
be dealt with by law enforcement.
6.2 Seatwave is not a "tout".
Seatwave provides a venue to r individuals and businesses who
wish to resell tickets. It also provides a venue for individuals
to resell tickets which they are unable to obtain a refund for
because of the restrictive terms and conditions imposed by event
organisers.
6.3 Seatwave facilitates the resale process
in the clearest, most intuitive way possible by providing a safe,
secure and trusted environment for sellers and buyers alike—far
from the stereotype "tout" imagery deployed by those
who would seek to end the secondary market.
7. THE IMPACT
OF THE
INTERNET UPON
TRADE IN
TICKETS
7.1 Similar to many industries, the Internet
has transformed the resale market for event tickets and disrupted
traditional business models—all to the benefit of consumers.
This disruption has relinquished the stranglehold event organisers
previously held over the supply of tickets and democratised access
for consumers. In any industry, disruption on this scale will
always lead to calls for regulation by those whose interests are
most threatened—in this case the event organisers—these
calls on this occasion are misguided.
7.2 Consumers have benefited enormously
from the introduction of the Internet—both in terms of accessibility
and transparency.
7.3 At one time the only option for consumers
who "missed out" on the initial supply of tickets, in
many cases a less than 15 minute minute window on a weekend morning,
was to seek out the traditional ticket tout at the venue. This
would be done in the hope they could purchase a legitimate ticket
at a reasonable price—an often na-ve aspiration. The
advent of the Internet has shed light on the resale process—consumers
can no make decisions on whom to purchase from and at what price
from the comfort of their own sitting room. Sites like Seatwave
can remove the element of risk from the process by providing market
information and providing financial guarantees through schemes
like TicketlntegrityTM.
7.4 The Internet has, for ticket resale
and many others, put control exactly where it belongs—with
the consumer. It has allowed for an increase in transparency in
the market. Transparent markets are more efficient and can help,
ultimately, to reduce prices.
8. SALES OF
TICKETS ABOVE
FACE VALUE
8.1 The high prices achieved by some tickets
for "must have" events have generated headlines in the
press and calls for government intervention from many parties.
However, according to the Department of Culture, Media and Sport's
own research, [35]"consumers
are inclined to view tickets as acceptably transferable [...]
and that (re)selling at a profit is also acceptable so long as
it is done in a small-scale fashion and by `individuals'".
8.2 "Face Value" is an important
piece of information for consumers to have (and Seatwave requires
that all its sellers list this information in accordance with
the Price Indications (Resale of Tickets) Regulations 1994) but
many consumers who were unable to purchase a ticket when it was
first released are happy to pay above this face value to secure
the ticket they want—particularly as the date of the event
approaches. The price a ticket is finally sold is therefore a
result of its scarcity and desirability. As long as consumers
make the decision to purchase at above face value in possession
of the appropriate information about the ticket there is nothing
"wrong". Tickets are, after all, like any commodity
in a free market and will sell at level determined by the market.
8.3 Some event organisers are now selling
many of their best tickets well above face value within "VIP
Packages", these often include perks such as a chance to
see sound checks or to go backstage. In reality, although these
perks have notional value, the package deal obscures the true
price paid for the ticket at the heart of the package.
9. SEATWAVE'S
COMMITMENT TO
A FAIRER
DEAL FOR
CONSUMERS AND
FANS
9.1 Seatwave is on the side of the fans
and our activities are determined by this. There have been and
continue to be, inappropriate activities, in the industry. The
industry and the Government have the responsibility to protect
consumers.
9.2 Seatwave is committed to working with
the Department for Culture, Media and Sport to both increase protection
for ticket buyers and protect the in rests of ticket resellers.
We have participated in the DCMS's series of "Ticketing Summits"
aimed specifically at protecting fans from dishonest ticket touts
and have signed up to the DCMS' "Statement of Collective
Agreement", in fact our actions have gone beyond what is
required of us by the Collective Agreement.
9.3 For its part, Seatwave guarantees that
buyers will receive the tickets they ordered and in good time
for the event. All tickets bought on Seatwave are covered by TicketCoverTM
and are guaranteed through our TicketlntegrityTM system.
9.4 Through TicketIntegrityTM, we guarantee
that our tickets come only from legitimate sources and that we
will represent them accurately and honestly. We guarantee that
the consumer will receive the same tickets ordered (or better)
and that they will arrive in time for the event. If we are unable
to keep this commitment, Seatwave will pay the event goer the
full price of the ticket plus half of what they originally paid
for the tickets.
10. TERMS AND
CONDITIONS—AN
UNFAIR DEAL
FOR CONSUMERS
10.1 The terms and conditions imposed by
event organiser restricting transfers, resale and refunds of tickets
they have bought in good faith result in consumer detriment. By
refusing to allow refunds of tickets, event organisers leave consumers
with limited options. In order to recoup their costs consumers
will use services like Seatwave to dispose of tickets they no
longer need—on what grounds should this be unacceptable?
Similarly if a group of friends buy tickets for an event but one
finds they can no longer attend why should that ticket not be
transferred to someone else?
10.2 Consumers, according to the DCMS survey
of February 2007, [36]support
this view and are inclined to view tickets as "acceptably
transferable".
10.3 The terms and conditions restricting
transfers, resale and refunds of tickets may be legally challenged
as unfair under the Unfair Contract Terms Act 1977 and the Unfair
Terms in Consumer Contract Regulations 1999. The Regulations state
that "A standard term is unfair if, contrary to the requirement
of good faith, it causes a significant imbalance in the parties
rights and obligations arising under the contract, to the detriment
of the consumer".[37]
10.4 In essence these require terms in consumer
contracts to be reasonable. A restriction on transferability is
arguably not reasonable. Under English law any exclusion or restrictions
such as on transferability have to meet the test of reasonableness.
10.5 It is a matter of English contractual law
that for a restriction on transferability to be enforceable it
must be bought to the purchasers' attention before the contract
for the sale of tickets is entered into. Therefore just including
on the back of the ticket a restriction on transferability or
in the small print of ticketing terms may not be sufficient. People
often buy more than one theatre ticket at a time for friends and
family and transfer those tickets to others. Accordingly, any
attempt by a theatre/venue/promoter to prohibit the transferring
of a ticket from one person to another would be unenforceable
as a breach of standard custom and practice implied in the contract
for the sale of the tickets.
11. THE MERITS
OF NEW
APPROACHES BY
TICKET AGENTS
ATTEMPTING TO
PREVENT THE
TRANSFER OF
TICKETS, INCLUDING
WIDER USE
OF PERSONAL
ID
11.1 Seatwave is opposed to any attempt
to prevent the transfer or resale of tickets. Such moves serve
only to protect the interests of ticket agents and event organisers—leaving
fans with restricted access to tickets in the long-term. A number
of ticket agents have attempted to link ticket sale to personal
ID, as is the case with this year's Glastonbury Festival. This
represents a. deliberate attempt to prevent the possibility of
resale and hence maintain tight control over the market. It is
also difficult to enforce, requiring additional checks upon entry—leading
to long queues and public order issues—in reality these
checks are rarely sufficient.
11.2 There have been a number of high-profile
cases of promoters and ticket agents cancelling tickets that have
been offered for sale on eBay and other sites. [38]This
is a practice that should be outlawed because there is no reasonable
need to do so.
12. RESTRICTED
SALES OF
TICKETS FOR
CERTAIN CLASSES
OF EVENT
12.1 At present there are specific restrictions
on sales of certain types of ticket. Two examples have been identified
by the Committee; designated football matches and events at the
London 2012 games. In the case of football matches there is a
historical, and sound, reason—the prevention of hooliganism.
In the case of the London 2012 games the restriction is the result
of a specific prohibition imposed by the International Olympic
Committee. The imposition of further restrictions is, in Seatwave's
opinion, unnecessary. If further restrictions were to imposed
this should be done on a case-by-case basis, the presumption should
alwayws be that resale of tickets is a consumer right.
13. SHOULD RESALE
OF TICKETS
FOR EVENTS
OF NATIONAL
IMPORTANCE BE
BARRED?
13.1 Seatwave is opposed to any attempt
to prevent the transfer or resale of tickets. For events of "national
importance" the protection of the consumer right of resale
is, perhaps even more important than for other types of event.
When an event such as a FA Cup Final or a charity concert captures
the public imagination demand will always exceed supply. Therefore,
opportunities for the public to access the tickets they want must
be maintained rather than restricted.
14. CONCLUSIONS
14.1 Seatwave calls on the Committee to
recognise that demands to impose statutory regulation are largely
driven by attempts of events organisers and ticket agents to protect
their own commercial interests, not by any concern for the interests
of the consumer. The Committee should be mindful of the consumer
interest and should base any recommendations it makes on ensuring
that consumer rights to both buy and sell tickets are protected
and promoted—not restricted.
14.2 The worst resale practices, those which
are fraudulent and illegal, must not be tolerated and appropriate
action needs to be taken by law enforcement authorities to stamp
them out.
14.3 The overriding objective of any interventions
recommended by the Committee should be to support and promote
a transparent and fair resale market.
June 2007
33 Dow Jones-Sport Industry Report. Back
34
Hitwise Monthly Top 100 Report, May 2007, Hitwise Ltd. Back
35
Department of Culture, Media and Sport Research "The Secondary
Market for Tickets (Music and Sport), page 2-February 2007. Back
36
Department of Culture, Media and Sport Research "The Secondary
Market for Tickets (Music and Sport), page 2, February 2007. Back
37
Unfair Terms in Consumer Regulations 1999, Clause 5(1). Back
38
BBC News website article on injunctions taken out to prevent resale
of Wimbledon tickets-19 June 2005-http://news.bbc.co.uk Back
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