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Posts that contain political commentary on the topic of ticket scalping or ticket resale.

Should Public Policy Favor Ticket Resellers?

Should Public Policy Favor Ticket Resellers?

Lawrence White, an economist at NYU wrote a commentary on Huffington Post in support of ticket transferability and the State of New York’s recent renewal of a law, “that allows venues to sell non-transferable paperless tickets only if buyers have the option of a transferable alternative, including the right to resell their ticket above or below face value as they see fit…”

The gist of White’s position …if you buy the ticket, you should own it, and be able to do with it as you wish — use it, resell it, or give it away. That is where a secondary market comes in… [t]hese developments give flexibility to a first-instance ticket buyer, whether because the buyer cannot attend an event because of changed plans, or because the buyer wants to sell some of a multi-event series of tickets such as a season ticket. They also benefit the late-instance buyer whose plans change so that attending the event is now a possibility.

I agree with notion that a ticket should be transferable. There are too many inconveniences and short sighted outcomes when tickets are restricted from resale. However, the law should not dictate transferability, especially when the secondary ticket market is largely driven by profit motivated resellers. A comment posted by Ejay McCarthy in response to Professor White’s article claimed, “I tried to buy Justin Bieber tickets for my nieces, but it was sold out in a matter of minutes. Go to ebay right now and you can find them from 200 per ticket all the way up to 3500 per ticket.” That experience has been shared by more than enough average consumers to fill Madison Square Garden to capacity. The secondary market still has too many options for crowding out the public from primary ticket sales.

Public policy that dictates ticket transferability is unnecessary. Why not have laws that regulate the number of tickets resellers can acquire from the primary market? They do not exist because laws like that would interfere with the free market.

 

Control vs. Fans Rights

Control vs. Fans Rights

Earlier this afternoon, a panel discussion at Ticket Summit in Las Vegas entitled, ‘The Merger” was held to discuss the Live Nation / Ticketmaster merger that was approved by the Justice Department earlier this year. The panelists included Jeff Kline of Veritix, Doug Lyons of Tickets.com, and Don Vaccaro of ticketnetwork. For ticket brokers, the timing of the panel discussion could not have been better as almost simultaneously, Live Nations stock price is being hammered by news of a revenue dip and slow summer concert sales. This made harping on Live Nations business model very easy.

While Live Nations stock price tumbled, the panel got to the root of a key issue from the ticket resellers perspective and that is the issue of control. If a fan buys a paperless ticket, why can’t they sell it or gift it later? Why can’t someone in California buy a pair of tickets for a friend in Florida? Because Live Nation / Ticketmaster wants to keep those tickets out of the hands of resellers. Huh? wait. So inconvenience millions upon millions of fans because you want to control who can sell a ticket? Essentially, yes, though Ticketmaster usually veils the explanation. This discussion leads to the issue of ‘fans rights’ which is relatively new talking point in the ticket resale community.

For ticket resellers, fans rights are a convenient platform from which to argue that less control of tickets is better for the fan. This is of course because less control also means there are more opportunities for the secondary market. And that is really the point that this panel and industry leaders, including Chris Tsakalakis of StubHub wants to get across to consumers and industry players. Let the market run free and everyone can win.

A good question raised by the panel discussion is why can’t ticket resellers be viewed as just another distribution channel? What is the problem with presenting options to a diverse customer base? In recent years, major league sports have begun to partner with resellers (Ace Tickets and the Red Sox in Boston and StubHub partnering with the MLB, for example), so why can’t concert promoters and Ticketmaster do the same?

More to come from Ticket Summit 2010.

N.Y. State Ticket Report: Where’s the Data?

N.Y. State Ticket Report: Where’s the Data?

New York City is an exceptionally vibrant market for secondary market ticket sales. In the U.S. the Big Apple is nearly head to head with Las Vegas in scalping activity and high resale prices.  It is no secret that New York has sought to curb ticket resale through various forms of legislation over the years. In June 2007 the states position changed when then Governor Eliot Spitzer opened ticket resale to the free market. The bill is presently extended through June 2010.

Despite the expected benefits of a free market in New York, legitimate issues persist. A report recently presented to the Governor & Legislature of New York State sought to evaluate these issues in considerable depth. The report offers some background on ticket resale issues in New York and answers some specific questions placed before the Department of State. Though it raises valid and highly relevant points, its conclusions are seriously flawed. The most concerning is the absence of valid data used to reach conclusions about primary and secondary market ticket sales activity.

The report, which was commissioned by the New York State Department of State, initially claims that “[T]he Department conducted a comprehensive analysis of ticket prices and their availability for popular events on both the primary and secondary markets”. Based on that statement, I expected the report to contain an empirical study of primary and secondary market ticket sales. However, three paragraphs later, the report states that “These recommendations are the product of an analysis that was hampered by the Department’s inability to compel any segment of the industry to produce valuable ticket sales and availability information on either the primary or secondary markets.” Notwithstanding that these two statements conflict with one another, how does one make any empirical claims about primary or secondary market ticket sales activity without data?

In defense of the State Department, I know first hand that some ticket sellers are unwilling to share market data for any reason. However, the claim that no one would cooperate did not make sense. In my own experience, StubHub, one of the leading ticket resale market places, has always been willing to provide data to valid research efforts. In checking the Departments claim, I asked StubHub if the New York Department of State had approached them for data. A representative for StubHub confirmed that the Department of State met with them in December of 2009, but according to Joellen Ferrer, a spokesperson for StubHub, “We were not approached by the [Department] for data”.

So, what data did the Department use to support the key findings of the report? Turns out the data were gathered by browsing select ticket prices posted on primary and secondary market ticket seller websites. This may sound like an acceptable method for gathering ticket price and sale data, but it is actually open to a great degree of error. The reason is that ‘offer price’ and ‘sold price’ are not always the same. Sometimes ticket resellers will offer a ticket for $500 that is simultanously being offered somewhere else for less. In other cases, someone may call the reseller and pay $400 by negotiating. Clearly, there is no way to know what tickets sell for or how many are for sale without having the transactional data. Therefore, claims such as  “[T]he Department failed to establish any causal connection between the existence of price caps and the availability and cost of tickets on the primary and secondary market” cannot be supported by research that is not based on actual transactional activity.

The lackluster manner in which this report was prepared is unfortunate for two reasons. First, New York is an exceptional case for ticket sales and there is a legitimate need to empirically evaluate and address unique market conditions. If those issues are going to be properly addressed, the solutions need to be based on facts and not casual observations. Second, the quality of this report pales in comparison to one that was produced ten years ago by the Department of Law titled, Why Can’t I Get Tickets?, which is one of the best in-depth analysis of ticket scalping produced by a state office.  The Department of State should look to that report as an example on how to approach this difficult issue and make a more substantial effort in doing their homework.

In a future writing, I will highlight some of the relevant issues raised by this report and propose how the state should approach the issues.

Wiseguys Tickets: Good for Fed’s, Bad for Resellers

Wiseguys Tickets: Good for Fed’s, Bad for Resellers

The recent allegations against Wiseguy Tickets (which their lawyer does not seem to deny) represents a step forward for law enforcement in the illegal and unfair practice of hacking primary ticket seller websites to get the best tickets. Simultaneously, this case represents a step backward for ticket resellers.

Look like an admission to me: Wiseguys lawyer, Mark Rush, stated that “Wiseguys were simply businessmen who came up with technology that essentially allowed them to get to the head of the digital line for Internet tickets, much like fans who used to camp out overnight to be first in line to buy tickets at the box office.” That statement brazenly glosses over the ‘access policies‘ enforced by primary market ticket sellers and Federal laws that prohibit hacking private computer networks – which include ticket sellers websites.

The Good: It is about time the FBI took a serious and public stand against those who use ‘bots’ to illegally obtain event tickets. The practice is boldly and openly practiced with seemingly little enforcement action. Showing some creativity, the fed’s allegations focus on fraudulent and illegal access to private computer networks in an effort to obtain event tickets. They approach the case in this way because there is no federal law against buying tickets with the intent to resell them, or ticket scalping as a practice, though there are some state laws. Hopefully for the consumer enforcement action to this end with increase.

The Bad: News of this case is a setback for ticket resellers who seek to shed the ‘scalper’ image of the past. Ticket resellers should be speaking out against this illegal and unfair practice.  This kind of news does not help advance a positive image of the industry and only angers fans who are unfairly denied access to event tickets.

It will be interesting to see how Ticketmaster/Live Nation address this issue. Seems to me that they could spend millions trying to sue those who hack their sites, but if I were them, I would be hiring some technical talent capable of plugging the security holes exposed by this case.

Federal Indictment on Wired.com

Resold Tickets Pose New Challenge

Resold Tickets Pose New Challenge

At last weeks Ticket Summit in Las Vegas, the leaders StubHub, Ticket Network and Razor Gator each explained that resold ticket prices are dropping on increased supply. Don Vaccaro, CEO of Ticket Network stated that “average [resold] ticket prices were down 15%.” This story is consistent with StubHub’s statement that average ticket prices are down $20 to $140 from last year. Lower prices coupled with increase supply suggests that growth in the secondary market means better values for fans. It is not always easy to see that value if you are on the market for a Coldplay tickets (as I am), but Coldplay is an exception because they are riding the wave of a great album and have not toured in three years. Coldplay aside, there are plenty of deals to be found on the secondary ticket market. For example, Toby Keith is playing at Comcast tomorrow (7/26) and StubHub has 20 tickets for under $40 each – the same seats Live Nation is selling for $72. This coming Tuesday, Jewel is playing at the Warfield in San Francisco. In this case, Ticketmaster has a pair for $147.10 (inlcuding fees) while both StubHub and TicketNetwork are offering a comparable pair of tickets for about $20 dollars less. Usually, when artists speak of ticket resale, or scalping, they speak of price gouging – not under-cutting!

I foresee a challenge of a different kind for Live Nation and Ticketmaster. Not only will they need to address underpricing in the early period of ticket sales, they need to avoid being undercut by ticket resellers and consumers trading tickets in the late period. If concerts and sporting events were selling out, this would not be a problem, but they are not. Stadiums and arena’s are not filling and primary marketing tickets are going unsold. Live Nation has responded to this challenge by fire selling lawn seats, but I suspect primary market sellers are going to have to start offering bargains on unsold seats of better quality if they are going to compete, yes compete, with ticket resellers in the few weeks leading up to an event.

Demystifying Ticket Summit

Demystifying Ticket Summit

This past week I had the opportunity to attend Ticket Summit in Las Vegas. I was prompted to attend the conference when I was invited to participate in a panel discussion on ticket pricing. Prior to being invited, I am embarrassed to admit I had only known of the National Association of Ticket Brokers (NATB). When I researched Ticket Summit, I quickly learned it was run by Ticket Network, a leading broker and provider of technology solutions to ticket brokers. So, if NATB is supposed to be the leading industry association, why is a large broker running an event that seems very similar to NATB’s World Ticket Conference? I attempted to contact the NATB on two occasions via phone and email to inquire about attending the World Ticket Conference, which was to take place at a neighboring Las Vegas hotel. That contact went without reply and I was unable to attend that conference.

What I learned by attending Ticket Summit is that though the event may appear to be constructed on a self interested agenda, it appears better run and more organized than NATB’s World Ticket Conference. For example, Ticket Summit has a dedicated public relations contact that went out of her way to make sure I had face time with key leaders attending the conference – bear in mind I am a hobbyist blogger not a reporter for the New York Times (and one was there too). Then there is the content of the panels, Ticket Summit had rich discussions ranging from “Futures Markets”, “Pricing Strategies for Ticket Sellers” (for which I was a panelist), and “Internationalizing Your Ticket Base”. NATB’s World Ticket on the other hand had no PR contact I could locate and panel topics that seemed less interesting, including “How to Fix a Broken Sales Team” and “Is Your Website Hurting Sales?”.

In fairness, Ticket Summits panel discussions need improvement in two key areas. First, some panels were too short for the material and issues being discussed – some felt rushed. Second, the quality of discussion on the panels could benefit from stronger moderators. For example, the keynote panel on “Ticketing in a Recession Economy” lacked continuity in discussion. The panel I participated on was dominated with questions about dynamic pricing which distracted the panelists from talking about “Pricing Strategies for Ticket Sellers”.

Of course, Ticket Network being a technology provider for ticket brokers is well suited to run a conference for its customers, but the conference leaps beyond this purpose in that is includes key competitors, including StubHub (whose president gave a keynote) and their show case features businesses that are clearly competitive to Ticket Network. It would make a little more sense for Ticket Network to go to all this trouble if they were making money on the event, but even if 500 attendee’s all paid the $249 conference fee, $124,000 and some sponsorships could not possibly pay for two and a half days of meeting rooms, catering and two receptions.

So, why does Ticket Network run Ticket Summit? Simple, Don Vaccaro, CEO of Ticket Network, is a very smart guy. By investing in the conference, he drives the agenda and keeps his customers close and his competitors even closer. From the outside it appears selfish, but up close it is more “fair and balanced” than FOX News.

As the week progresses, some writings will follow on interesting issues raised at the conference.

I was prompted to write this article to help academics (market designers included) and outsiders have a better understanding of Ticket Summit and the premise of the conference which takes place twice a year.

Nine Inch Nails Speaks Out on Scalping

Nine Inch Nails Speaks Out on Scalping

In the run up to the 2009 summer concert season, anticipation builds among fans for the chance to see their favorite bands live. As ticket sales commence nation-wide, so does the rankor among fans about their in ability to get good tickets (or any tickets for that matter) at a reasonable price.

It is unclear what triggered Trent Reznor to speak up on his bands community forum about the ticket pricing and scalping situation, but he did and in doing so, provided some helpful insight into the frustration and difficulties bands encounter in dealing with a system does not serve the best interests of fans.

In his note, Reznor correctly points out two issues, while failing to address one important issue:

1. TicketMaster does not efficiently sell ticket and their selling methods basically invite scalping. Even when they know for a fact that their systems practically welcome scalping, they do nothing to fix the problem.

2. Reznor correctly speculates that if the TicketMaster/LiveNation merger go through, the company would begin selling tickets via auction, which would raise prices for the best tickets.

What Trent failed to explain is why his legendary band, and others are not coming together to more aggressively counter a system that clearly does not make artists feel they are serving fans. Is the TicketMaster Live Nation machine so powerful that ten or twenty major artists cannot induce some kind of change? It is kind of sad, fans don’t like the system, most bands don’t like the system, WHO DOES want to keep things status quo and how is it that the person who drives the gravy train – the artist – is powerless?