THIS WEEK IN CULTURE + THE CULTURE BUSINESS
News Briefing: The ticketing consultation
The UK government has launched a consultation on the ticketing business, with a particular focus on the ticket resale market and a proposed price cap on the unofficial resale of tickets by touts. The use of so called dynamic pricing on primary ticketing sites for in-demand shows is also in the spotlight.
In this TW News Briefing we review the ticket touting controversy, explain how ticket resale is currently regulated in the UK, and run through the proposals for tighter regulation.
THE SECONDARY TICKETING MARKET
When we talk about the sale of tickets for gigs, shows and concerts, we can distinguish between:
• Primary ticketing platforms – websites where promoters and producers, and the venues they use, sell tickets for their shows.
• Secondary ticketing platforms – where third parties resell tickets they acquired from the primary sites. We variously refer to those third parties as resellers, brokers, scalpers and touts.
Ticket touting existed pre-digital, of course, but it was the shift online that turned it into a billion dollar business.
Websites like Viagogo and StubHub provide marketplaces where touts can easily resell tickets. Ticket-buyers can access the secondary ticketing platforms just as easily as the primary ticketing platforms, and they may not even understand the difference between the two.
THE SECONDARY TICKETING INDUSTRY
Anyone can resell tickets via websites like Viagogo and StubHub. That includes individuals who bought tickets for a show that they initially planned to attend, but who then – for some reason – can’t make it. As tickets are often non-refundable, reselling the ticket in that scenario allows the buyer to get their money back.
However, the majority of the tickets available on the secondary sites are being sold by people who never intended to attend a show, and who instead bought tickets in order to resell them at a marked-up price point, and therefore make a profit.
Of course, a profit is not guaranteed, the tout may not sell a ticket or might have to sell it at the last minute for less than they paid for it. But if it’s a ticket for an in-demand limited run music, comedy or theatre event, it’s likely they will be able to sell the ticket at a significant mark-up.
The platforms charge a commission on any sales, often quite a significant commission. In return they facilitate the transaction and help promote the touted tickets, especially via Google search, where many people start the ticket-buying process.
They also usually provide the buyer some sort of guarantee that if the tout doesn’t provide a ticket that gets them into a show they will be able to claim a refund. Though quite how the refund guarantee works differs from site to site.
THE CONTROVERSY
Many of the tickets listed on the resale platforms are being sold by a relatively small community of commercial touts who aim to secure a large number of tickets for in-demand shows.
Various tactics are used to secure those tickets, including employing software – or bots – that automatically buy up tickets from the primary sites as they go on sale.
This activity results in tickets on the primary sites selling out very quickly. Fans who don’t manage to get tickets during the initial on-sale are then forced to buy from the resale platforms in order to attend a show, with the tout adding a profit margin, in some cases many times the face value of the original ticket.
Some fans might actually buy tickets on a resale platform, at a higher price, when tickets are still available at face value on the primary sites, because they find it confusing as to which sellers are official and which sellers are touts.
The resale platforms have a history of employing misleading language and other tactics to capitalise on consumer confusion in this way.
The result is that many fans end up paying significantly more for tickets to in-demand shows, with the extra money going to the touts and the resale platforms, not the people performing or producing the shows.
This has caused lots of controversy over the last two decades.
REGULATING SECONDARY TICKETING
How ticket touting is regulated varies greatly from country to country, and in some countries – like the US – from state to state.
A ticket is technically a contract between the promoter or producer of the show and the audience member. And the promoter or producer can include a term in that contract that prohibits resale, and which says that if the ticket is resold it can be cancelled.
This means that the promoter or producer can monitor the resale of tickets and then cancel any tickets that have been resold by a tout.
Because the resale platforms in theory guarantee a refund if a touted ticket doesn’t provide access to a show, the customer should get their money back, meanwhile the tout and their resale platform of choice has been greatly inconvenienced.
However, this is only possible if there is a certain amount of transparency on the resale platforms as to what tickets are being resold, and it still requires quite a lot of effort on the part of the producer or promoter.
It can also result in audience members, unaware their tickets have been cancelled, being very unhappy when they are turned away from the venue on the night.
And in some places – for example, some US states – the law actually stops contract terms prohibiting resale.
In terms of specific laws regulating ticket touting, these might include…
• An outright ban on ticket touting, so that only people and companies approved by a show’s producer or promoter can sell tickets.
• A ban on mark-ups, so that people can only resell tickets at the face value set by a show’s producer or promoter, possibly with a small admin fee allowed.
• A price cap, so that the price charged by a tout can only be a certain percentage higher than the face value set by a show’s producer or promoter.
• A ban on the use of special software, or bots, to buy up tickets from primary ticketing sites.
• Other restrictions on how touts source tickets from primary sites.
• A ban on touts advertising for sale tickets that they are yet to actually secure (known as speculative selling).
• Obligations on the tout and the resale platforms to provide information to the customer, including the original price of the ticket, seat number, the identity of the seller, the fact that they are a reseller, and whether or not there are any terms that could result in the resold ticket being cancelled.
REGULATIONS IN THE UK
There are various regulations of ticket touting in the UK. Some are general regulations that apply to ticket resale, others were specifically introduced to regulate ticket touting.
In particular, there are restrictions on touts using certain tactics to access tickets, and obligations on touts and the resale platforms to provide information about seat numbers, the identity of the sellers, terms that could result in a resold ticket being cancelled, and so on.
Obviously, for those regulations to work they need to be enforced. In the past, National Trading Standards has gone after individual touts that broke the law, securing some convictions. Meanwhile, the Competition & Markets Authority has taken action against resale platforms that did not comply with the rules.
Regulation of ticket touting in the UK has increased over the years, mainly as a result of campaigning efforts by consumer rights groups; by anti-touting campaigners within the music and cultural industries, especially the FanFair campaign; and the efforts of certain politicians, especially Sharon Hodgson MP.
However, those campaigners argue that more needs to be done. The previous Conservative government in the UK indicated it wasn’t in the mood to introduce any new regulation.
However, last year, before the General Election, the Labour Party said that – once in power – it would introduce a 10% price cap, which would greatly hinder the commercial touts.
THE CONSULTATION
Now that Labour is in government, a consultation has been launched to consider that promised price cap, and other possible new regulations of the secondary ticketing market.
That includes limiting the number of tickets any one tout can sell for any one show and increasing the legal obligations of the resale platforms, in particular in relation to the information provided about touted tickets and the touts selling them.
Announcing the consultation, the government’s Business Secretary Jonathan Reynolds said, “From sports tournaments to Taylor Swift, all too often big events have been dogged by consumers being taken advantage of by ticket touts”.
Those touts, he added, too often employ “unfair practices” that “look to fleece people of their hard-earned income, which isn’t fair on fans, venues and artists”. To that end, the government plans to put ticket buyers “back in control”.
The consultation is not just looking at secondary ticketing, with the use of dynamic pricing by the primary platforms also being reviewed. That follows the backlash to the use of dynamic pricing by various music artists, most notably last year by Oasis for their reunion shows.
However, it seems likely that the most tangible outcomes of this work will be tighter regulation of the resale market, and in particular the possible price cap.
The commercial touts and the resale platforms will lobby hard against any new rules and the price cap. The Guardian ran an article last year about a meeting where the resale sector met to discuss how they might campaign against the Labour Party’s plans.
They will likely argue that ‘over regulating’ the resale platforms will force online resale to unregulated forums or foreign websites where customers are more likely to be the victims of out-right fraud.
Those who support more regulation of ticket touting will fight back against those arguments, most likely pointing to countries where ticket touting bans or price caps are already in place, and noting that cases of ticket fraud are no higher in those countries.