Face Value - The Secondary Market Conundrum: Navin Kekane, StubHub
11 Dec 2012
Fresh from contributing to MusicTank’s Ticketing Summit (Dec 2012), StubHub’s Navin Kekane continues the discussion…
This week’s debate ‘Ticket To Ride: Getting Primary Tickets Back Into The Hands Of Fans’ at MusicTank made it clear there is still much we can do together to identify and address the true issues within the live music industry. For StubHub, as a technology company dedicated to providing a great fan experience, there are clear opportunities to work with willing partners to progress this, most recently under our partnership with AEG, which will see fans enjoy an end to end event journey from artist management to stadia experience that is truly best in class.
The debate at the moment evidently hinges entirely around the issue of distribution of “face value” tickets and how bot technology, combined with opaque distribution by the primary market, offers so-called “Power Touts” an unfair advantage in obtaining tickets before the general public. While this is certainly not a hypothesis I disagree with, the default “price cap” solution fails to get to the root of the problem. Contrary to its proponents’ claim that this would be a disincentive to profiteers, such regulation (as experienced in other industries attempting to control a free market artificially) would be difficult to enforce in practice. It also impacts consumer rights considerably. Ticketing is the only consumer good that attempts to control buyers by instructing them when and at what price they can buy and what they can subsequently do with their purchase.
Put simply, secondary sites which operate an open and transparent platform give consumers access to sold-out events – provided they are prepared to pay for it. And, in our experience, around 50% of tickets are sold at face value or below. Capping prices, and other onerous legislation aimed at the secondary market, will fail in its primary objective: to eliminate the secondary market. Rather, it will drive it underground, with consumers handing over cash for what could be anything from a front row seat to a bus ticket, with no right of redress.
True legislation would tackle the root cause of the problem, distribution transparency. It would require artists and promoters to commit a certain percentage of tickets to public sale, or at least disclose the percentage of tickets made available. Coupled with this, true technological innovation would be to find a way to stop bots.
The argument that only the artist or promoter should be able to set the price for a ticket in perpetuity is frankly ludicrous. Once a ticket is bought and paid for the fan should be free to do with it as they please – and 98% of consumers agree. The fan makes a contract with the performer for an entertainment experience but ultimately it should be their choice whether to enjoy that experience personally, gift it to a friend or sell it for whatever price another fan is prepared to pay. Allowing a free market to determine the going value of a ticket benefits the people who ultimately really matter – the music fans.
Navin Kekane, Business Operations Director, StubHub UK