Caitlin Graham, Which? The OFT Should Re-Examine Ticketing

15 Jan 2013

Credits: @flickrRHiNONEAL

December’s MusicTank panel debate offered a unique opportunity to get various stakeholders into a room to discuss the challenge of getting primary tickets back into the hands of fans.  The ticketing market, in its current form, is not working well for consumers.  Regardless of whether we’re talking about die hard fans or the casual gig goer, consumers are struggling to get tickets to gigs in the first place and being left in the position of either paying well over the odds for a ticket on a secondary site, or not attending at all.

Apart from those ever-present touts standing outside venues trying to flog off extra tickets, there seems to have been a general belief that most tickets offered on secondary sites were sold by other fans who were unable to attend.  However, Channel 4’s Dispatches documentary (Feb 2012) revealed that some of the hugely marked-up tickets seen on secondary sites aren’t merely the result of opportunistic touts.  The music industry itself is actually involved in these practices.  Dispatches alleged that some promoters are allocating an undisclosed portion of tickets to be sold directly through secondary sites and pocketing up to 90% of the profits.  Further, Dispatches also filmed staff members at secondary sites, such as Viagogo, buying large numbers of tickets from ‘primary ticket agents’ with multiple credit cards and then reselling them through Viagogo for large profits.

In response to the Dispatches programme, The Concert Promoters Association claimed that its members were forced to take these actions because the government failed to intervene in the secondary ticketing market, and that they viewed secondary ticket sites as a form of legitimate ‘premium primary ticketing’ market.  If this is how parts of the industry view the secondary market, why have they never made this explicit to consumers before?  We would urge those in the industry who feel this behaviour is unacceptable to continue to voice their concerns and push for a live events industry that has fans at its core.

So what is the solution to getting primary tickets back into the hands of consumers?  For many big gigs tickets go on sale at 9am and demand is high.  It’s hard enough to get tickets when you’re up against professional touts, but now there are even fewer tickets available in that 9am rush as it appears that promoters are restricting primary supplies so as to make a profit on the secondary market.  Regulation may be a possible solution, as has happened recently in France, but it’s difficult to envisage how such a solution would work in the UK.  We would urge the OFT to re-examine the issue of ticketing, in light of the evidence and events of the past year.

This situation feels incredibly unfair for consumers.  And it certainly challenges the ‘free market, supply and demand’ argument that tends to get thrown around when talking about event ticketing.  Rather, this looks like a market where supply is being artificially restricted in order to drive up demand with consumers bearing all of the risk.  There is limited competition, and therefore limited choice for consumers, due to the nature of the contracts between venues, promoters and ticketing agents.  The ticketing market is an unusual market in that ticket prices aren’t set based on the market clearing value.  Tickets are often priced in such a way so as to encourage a specific audience and to enable a wide variety of people to attend events.  It does feel right that tickets should be available to all consumers, not just those with the biggest incomes.  And it’s for this reason that we want to see more primary tickets back into the hands of consumers.

Caitlin Graham, Policy Adviser, Which?

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