by John Breyault, Vice President, Public Policy, Telecommunications and Fraud, National Consumer League
Protect Music and Sports Fans from Ticket Industry Abuses
When Beyonce recently announced her highly-anticipated “Mrs.
Carter Show” tour, fans waited eagerly for the moment tickets went on sale. But
at the magic moment, thousands of fans were disappointed to learn the show had
sold out in seconds.
Was this just a simple case of too much demand for too little
supply, just luck of the draw since not everyone could “win” in the contest for
a limited number of tickets? But the
reality of today’s ticket marketplace is neither that simple nor that
fair.
In fact, the ticketing procedures for the multibillion dollar
sports and entertainment industry have become the antithesis of the fair
marketplace that consumers have a right to expect, especially when so many concerts
and games take place in taxpayer-subsidized facilities.
Instant
sellouts like Beyonce’s occur in part because a large number of tickets are set
aside for paid fan club and premium credit card “pre-sales” and for industry
insider VIPs, leaving thousands of regular fans disappointed each time. Sometimes, those pre-sale and VIP tickets are the ones that end
up on resale websites. And ordinary fans are left with the sinking feeling that
they never did have a chance to buy those tickets at face value in the first
place.
In Nashville, for example, an investigative news unit revealed that only
1,001 of 14,000 tickets were offered to the general public for a recent Justin
Bieber concert. The overwhelming majority
of the 14,000 seat arena was earmarked for pre-sales, available only to privileged
premium credit card holders and paid fan club members. Often, professional scalpers sign-up for
multiple fan club memberships or use multiple American Express cards to gain
access to pre-sale tickets to sell on the secondary market.
What's worse, the investigation found an entire block of tickets held back from the public were then resold above face value by Bieber's own tour, or as the local news headline put it: "Documents Show Bieber is Scalping His Own Tickets."
The
practice doesn’t stop with Bieber. Singer Katy Perry two years ago garnered
unwanted publicity when the Smoking Gun website revealed that the standard rider for her concert tour
reserved the option to hold back tickets and provide them to “resellers” for “distribution to the public” on the
“secondary market,” the quantity and
location of the tickets to be determined in each case by Ms Perry’s personal
manager. Or, as one pop culture website
put it, Katy Perry Reserves the Right to Scalp Her Own Tickets, to her own fans at
a price higher than the face value.
The phenomenon of holdbacks and artists scalping their own
tickets is neither new nor unique to just a few bad apples on the pop music
scene. A March 2009 Wall Street Journal
article cites Neil Diamond scalping his own tickets on the Ticketmaster
resale site, then flatly reports the following:
Virtually every major concert tour today involves some official
tickets that are priced and sold as if they were offered for resale by fans or
brokers, but that are set aside by the artists and promoters, according to a
number of people involved in the sales.
That includes recent tours by Bon Jovi, Celine Dion and Van Halen,
and a current tour starring Billy Joel and Elton John.
No wonder then that it is almost impossible for ordinary
consumers to buy tickets at “face value” when the tickets go on sale to the
general public – and no wonder that venues, entertainers, promoters and the
ticketing giant Ticketmaster are all loath to disclose to the public just how
many tickets they are actually making available to the general public at the
moment of the initial on-sale.
Yet once you do buy a ticket with your own money, the
entertainment industry wants to control what you do with it.
More and more concert tours use restricted ticketing to limit
your ability to resell or even give the ticket away. Under that system, you
have to show up with the credit card you used to buy the ticket, or your entire
party has to show up at the same time, in order to gain entry. If the goal is
to limit the role of professional scalpers, why not deal with the problem at
its source instead of inconveniencing every fan?
Consumer activism about what appears to be an unfair market has
spurred legislators around the country to seek ways to level that playing
field, and to prevent those who benefit from the unfair system from cementing
their control over the secondary market.
In New Jersey, bipartisan groups of lawmakers are considering
transparency legislation that would require ticketing agencies to disclose how
many tickets to an event are actually available when they go on sale online to
the general public. Other proposals would prohibit “bot” technology, software
programs that grab large blocs of tickets before the general public has a
chance to buy them.
Michigan legislators are considering similar proposals targeting
software “bots” as well as proposals to ensure fans own the tickets they buy,
barring the use of restrictive tickets that would limit fans’ ability to
transfer those tickets whether as a gift or through reselling.
Minnesota’s House approved legislation last year to ensure
ticket buyers own those tickets, and can transfer them or use them as they
wish. The bill has been reintroduced this year as well.
In Tennessee, four legislators who originally co-sponsored
a Ticketmaster-backed bill – called, with no sense of irony, the Fairness in
Ticketing Act – that would restrict secondary market rights for ticket buyers,
rescinded that support when they realized that consumers’ rights were being
attacked.
The industry’s attempt to restrict the market in ways that
benefit the entertainment and ticketing giants to the detriment of ordinary consumers
extends to sports as well.
Both the New York Yankees and the Los Angeles Angels recently
opted out of Major League Baseball’s deal with StubHub as the official resale
marketplace, instead negotiating their own partnerships with Ticketmaster to
establish, for example, the Yankees Ticket Exchange for reselling Yankees
tickets. Unlike the secondary market
managed by MLB and StubHub, however, the
new Yankees Ticket Exchange will have price floors, limiting both the ability of fans to buy
cheap tickets and perhaps the ability of ticket holders to offer their seats
for sale at a low market price if the team still has unsold tickets. Since many
season ticket holders can only afford their seats by being able to lay off
those games they do not want to attend, they could be left holding tickets that
will not be used if the floor is imposed.
Already, it has been reported that ticket
prices on the new Yankees Ticket Exchange are higher than on StubHub.
Consumers can benefit in many ways from secondary
markets that allow them to buy and sell tickets, as long as those markets are
transparent, competitive and consumer-protected. Consumers need to make our voices heard so
that decision makers understand we want a fair market and an even playing
field.
That is why the National Consumers League has joined with
advocates and others, including StubHub, to support Fan Freedom (fanfreedom.org), which is
fighting in states across the country for a fair deal for fans.
Consumers have a right to expect a fair and transparent
marketplace.
I am a regular participant in Public Citizen; i was brought to this article from a link on their site, and i find this absurd.
This is the sports & entertainment industry we’re talking about here, not the cost of medical care or grocery stores rigging prices or even gas stations colluding.
We are talking about the absolute far end of discretionary spending, after all other necessities have been considered.
This is where capitalism should be allowed to flourish to its greatest extent, where the market should be allowed to do whatever it wants, where the persons putting on the performance should be the ones to benefit most from the putting on of the performance, since it is after all their time, talent and sweat on stage for all others to admire. Most of the music of those mentioned in the articles can be found in other places for much cheaper. And if the Yankees are too expensive, go watch the Mets or the Islanders or spend the small amount of money on some other large number of available entertainment options and get on with your life.
Let’s focus our outrage on more important issues and stop worrying about how Justin Bieber or Katy Perry or Neil Diamond are figuring out a way to use the secondary market to their own advantage as opposed to allowing ticket scalpers to swoop in and take their cut for those same tickets. I’d rather have my entertainment dollars go directly to the entertainers in this way than the ticket-broker-specialists who work the system to get as many of these tickets as possible in a broader market, and then getting a cut just for holding onto the tickets themselves. Who deserves it more in this case? The ticket broker on the sidelines, or the entertainer who’s putting on the show in the first place?