Top Aus Promoters Call For Scalping Crackdown While Resale Vendors Dodge Questions

16 January 2017 | 5:56 pm | Daniel Cribb

“The entire music industry is a victim."

When you miss out on tickets to see your favourite act and moments later scalpers are hocking passes for stupid amounts on resale sites, the overwhelming sense of rage and disappointment can be unbearable.

The short-term effect is a fan missing out on a gig or paying through the roof because someone wanted to make a quick buck, but there’s a larger ticket resale issue brewing in Australia that needs attention before it develops into something far worse.

Who’s To Blame

Globally, the resale industry is worth billions each year, and with that kind of money at stake, it’s not surprising that, despite the uproar from fans and artists, there’s been little movement in regards to legislative change in Australia.

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"This is morally wrong.”

One of the world’s largest ticketing outlets, Ticketmaster, reported more than $1bn in secondary sales last year alone, according to a report filled by promoting juggernaut Live Nation Entertainment who own it.

“With this success in selling tickets, Ticketmaster continues to attract new clients worldwide,” Live Nation Entertainment President and CEO Michael Rapino said in a press release.

“In the third quarter, we added 170 clients to our base of over 12,000, setting us up for our seventh consecutive year of growth in ticket inventory.”

Live Nation also owns TicketsNow, Seatwave and Get Me In.

Music Glue is an online platform with bases in Sydney, London and New York and is used by artists, managers and more to connect with fans, sell music, merch and tickets - CEO Mark Meharry describes the scalping issue as “vast, complex, deep routed, highly nuanced”.

“The biggest live music companies in the world are making the vast majority of their profit from secondary…[Live Nation Entertainment] have no vested interest in stopping this problem,” Meharry told The Music.

“The economic argument for higher pricing is sound. The legal argument is sound. However, there is a moral argument that is not being considered. This is morally wrong.”

The resale industry is operating in a highly predatory and deceptive manner, which is what’s really costing fans.

“The entire music industry is a victim."

As resale websites are cashing in big time, they’re able to channel funds and time into Google Adwords, resulting in searches being flooded by their results. When punters jump online to search for tickets, they’ll see a handful of sponsored posts before the original ticketing site, including major sites like Ticketmaster Resale, Gumtree, Viagogo and smaller ones such as TicketBiz, Queen Of Tickets.

“It’s incredibly confusing and frustrating for a lot of fans,” revered Aussie music promoter/Frontier boss Michael Gudinski told The Music.

“A considerable number of people aren’t aware that they’re buying from a secondary market site and there have been countless times these people have purchased tickets that are not genuine or vastly inflated when they could have still purchase authorised tickets at the original artist set price.”

Take Guns N’ Roses for examples, when tickets went on sale many people searching for them were lured onto resale sites, many paying $300 for a $175 ticket when the shows weren’t even sold out yet. Why is it that Ticketmaster’s resale site appears before their primary site?

It seems resale sites are often unwilling to open a dialogue about the topic, issuing the same copy and paste answers to punters about supply and demand every time there’s another incident.

Ticketmaster repeatedly dodged questioning from The Music, issuing this statement on numerous occasions:

“Ticketmaster Resale provides a platform for fans to sell unwanted tickets and a safe purchase option for events. Ticketing marketplaces are dynamic and prices change in line with demand. Ticket holders, not Ticketmaster Resale, control the inventory and the price of the tickets they list. With high profile events, tickets are sometimes listed at prices higher than the face value.”

It’s nearly impossible to police the scalpers - that’s why legislative change needs to occur. There’s just too many of them, some of which are based overseas and using bots to buy tickets in bulk, with Music Tank doing in-depth research and discovering a startling number of tickets were being resold by people in countries outside of where events were taking place.

But as Oztix CEO Brian Chladil told The Music, it's hard to initiate legislative change for a couple of reasons.

“It’s anticompetitive and is against capitalism. If you see a good, cheap car on eBay, buy it and resell it for a profit, that’s not illegal, and this is the same thing," Chladil said. "It’s not actually illegal and it’s pretty hard to legislate against because you’re legislating against capitalism."

Unsurprisingly, the only ticketing outlet willing to engage in productive dialogue with The Music was a company who doesn’t have any vested interests in the resale game, Ticketek.

“Resale scalping is a threat to the integrity of the Australian music industry. Everyone suffers when resale scalpers are active,” a Ticketek spokesperson said.

“The entire music industry is a victim, but ultimately it is the music fan who suffers most. When a band you’ve followed all your life finally arrives in your town, it’s heart-breaking to see premium tickets sourced by scalpers priced at exorbitant levels.

“Or worse still, the scalpers will use the emotion of the fan to engage in false and misleading advertising. We see fans paying two or three times face value when the show is not even sold out because a resale site creates that fear of missing out.”

What Can Be Done

Promoters like Gudinski and Paul Dainty (Guns N Roses, Seinfeld) are often forced to use ticketing vendors according to venue contracts but are constantly trying new ways of deterring scalping.

“The reality is that the hands of the majority of promoters in Australia and New Zealand are tied,” Gudinksi said. 

“We’ve tried numerous measures over the years to deter scalping – limits on ticket quantities, asking people to line up at specific box offices, wristbanding at time of purchase – the list goes on.  Ultimately though you walk a fine line where you can end up inconveniencing the genuine fans too much and inhibit their ability to get tickets.”

When Crowded House’s relatively intimate reunion gigs at Sydney Opera House, promoted by Live Nation, in November sold-out and reappeared for insane prices on Ticketmaster Resale, the band claimed on Facebook they weren’t “in a position to change the practices of a big American company”.

Adele’s debut Australian tour is also promoted by Live Nation and thus ticketed through Ticketmaster Resale. When tickets went on sale, Ticketmaster stated, “at our busiest periods, we had over 90,000 fans searching for Melbourne, Etihad Stadium tickets and over 105,000 fans looking for Brisbane, The Gabba tickets.”

“Scalping is such a layered issue."

There’s never been a bigger single-day sale in Australia than Adele had, moving close to half a million tickets, yet you won’t find one ticket on Ticketmaster Resale. Adele’s been quite vocal when it comes scalpers in the past, so it wouldn’t be a stretch to think she has something to do with that – if that is the case, then artists do have a lot of power.

“A lot of artists are actively involved in the ticket prices that are set for their fans,” Gudinksi said. “It is frustrating for them – and us – to see those same fans ripped off by opportunistic secondary market sellers. 

“Scalping is such a layered issue that can be addressed from so many different perspectives and I can’t claim to understand enough to provide the solution but I do strongly believe in the artist having the right to decide what they charge for their live music.”

Legendary Scottish outfit the Bay City Rollers called out a notorious scalper, with Violent Soho also taking a stand last year. Iron Maiden have gone one step further, urging punters support a Bill tabled by the UK government for greater transparency in ticket sale transactions, and now the band operates under a paperless ticketing policy where fans need to present photo ID and the card used to purchase when they get to the venue. This isn’t practical for all artists, though.

Chance The Rapper took things into his own hands last September, buying almost 2,000 tickets from scalpers for his sold-out hometown show, selling them back to fans for face value. But this is beyond unsustainable.

In the UK, managers and artists have set up the FanFair Alliance in order to stand against industrial-scale online ticket touting by “a coordinated and pragmatic approach between Government, creative businesses, entrepreneurs and consumers.” And it’s working.

The Alliance was set up a few years ago and started a petition in early 2016 to “enforce the Consumer Rights Act to protect music, arts and sport fans from touts”, while lobbying individual politicians. It ended up with 83,220 signatures and as a result their House of Commons held a Select Committee on Ticket Abuse to access the damage the secondary market is having on the industry.

“Ticket Abuse” was listed on agenda and Josh Franceschi of You Me At Six, artist manager Ian McAndrew and more delivered testimony before representatives from Ticketmaster UK, eBay, StubHub and the Society of Ticket Agents and Retailers were grilled by the committee.

As Music Week reports, that hearing has led to the UK Government rolling out a plan to ban bots used by scalpers with an in-depth look into the ticketing industry, saying the committee found the session revealed “much more far-ranging and disturbing factors in the market”.

It was recently revealed that Robbie Williams’ management had put tickets directly onto secondary sites, and while they came under fire from Franceschi and the FanFair Alliance, there are still people who support the system and their choice.

US music journalist Bob Lefsetz took to his blog to break down the situation, stating: “It’s about time we faced reality and like any other business grew up and sold our wares at their full value. Like Robbie Williams.”

In the US, congress passed a ticket to ban bots in December, which was signed by Barack Obama.

“Ideally the same thing could happen in Australia very quickly,” Meharry said.

“We are not in favour of terms and conditions which restrict the consumer’s right."

Live Performance Australia – a representative for venues, promoters, ticketing companies and more – is one group on the right track, looking to uphold an industry anti-scalping code of conduct in which those companies affiliated might need to soon sign.

As, in 2014 LPA urged the Government to ban bots and monitor the resale market, with Senator Nick Xenophon also pushing to prohibit bots and tickets being resold for any more then 10%, but the motion was dismissed.

Through more lobbying, fan and industry outcry, it’s back on the table.

“I want to replicate the US laws to protect people from ticket scalpers,” Senator Xenophon told in September.

Live Nation Italy came under fire last month after managing director Roberto de Luca confirmed in an interview he had sold some tickets directly to sites such as Viagogo, with Live Nation taking up to a 90% cut.

As a result, a number of Italian artists are severing their ties with the company, while official complaints have been filed to the public prosecutor of Milan against Live Nation Italy and new policies have been tabled that could slow the activities of some resale sites.

Scottish authorities have also said they will crack down on scalpers and the sites assisting them, with the Competition and Markets Authority set to begin investigating the issue.

While not appearing on Ticketmaster Resale, Adele tickets were listed for up to $4,000 on Viagogo in Australia, and of course, they don’t want to support legislation that will decrease their cut.

“It’s perfectly legal to resell a ticket. We believe once you’ve bought something - whether that’s a house, a car, or a ticket - it’s up to you what you do with it, and the vast majority of people agree with us,” Viagogo told The Music.

“We are not in favour of terms and conditions which restrict the consumer’s right to resell their tickets.”

“I’d like to see some investment and commitment from the major ticketing companies."

Technological advances are also a means to reduce scalping, but still cause problems by disadvantaging those unable to gain access to said technologies. And at the end of the day, just like hackers, scalpers will eventually find a way around any new method of selling.

UK ticket seller DICE requires punters to install an app on their phone and make the purchase there. In theory, this sort of thing is great, but not everybody has access to smart phones.

Another UK seller, Gigantic, has made Twickets its official resale partner – a secondary selling against touting, supported by Adele, One Direction and more.

“I’d like to see some investment and commitment from the major ticketing companies into pursuing new technologies that can either slow down or eradicate scalpers but I also think the issue needs a deeper level of government involvement,” said Gudinski.

Chladil revealed that Oztix is working on its own resale facility, with a cap on how much tickets can be marked up.

“Resale should legitimately be available because there is a lot of reasons people buy tickets to a show and don’t go,” he said.

“What Oztix wants to do is let you sell the ticket, but we’re going to hold the money until the punter says, ‘Yeah, I successfully went to the show.’

“Ken West from Big Day Out had a great idea ten years ago – he wanted to have a resale facility for Big Day Out and the profits went to charity.”

Certain parts of the industry are trying to combat resale, but it seems the only real way for change to occur is if new legislation is passed. Perhaps the Norway method is the way to go – reselling tickets for profit is illegal, and as such, secondary selling doesn’t exist.

“There are cases – such as the AFL Grand Final – where scalping is essentially non-existent because the legislation is in place that prohibits it,” Gudinksi says.

“There is also some argument for scalping to be treated in similar terms to anti-piracy laws for music, television and film. Likewise, there is an argument that a body such as the ACCC should be involved, particularly for those cases where an individual has purchased tickets believing them to be as advertised, only to discover the reality is far different. 

“We’ve had conversations with various bodies but ultimately the public also need to engage and stand up and complain to official bodies such as the ACCC when they believe they’ve been taken advantage of by the secondary market sellers…if you want to make a difference then you need to make an official complaint where it could make a difference.”

Of course, there’ll still be scalpers hocking tickets on classifieds like Gumtree and others if harsh laws are brought in but banning bots and regulating sites goes a long way.

“We are trying to curtail ‘industrial scale ticket touting’ and the first step is to make the activity illegal,” Meharry said. “Gumtree is owned by Ebay, and should ‘ticket reselling’ become illegal in the UK, and Ebay allow the practice to continue unchecked, then they would effectively being facilitating the contravention of an Act of Parliament. And that would not be wise, in my humble opinion.”

"That’s an option the majority of artists would not wish to take.”

There’s a far greater issue at play here due to industrial scale ticket touting.

“We are allowing billions to be syphoned out of the industry,” Meharry said. “Scalpers are not part of the creative economy and none of the money they make is going back into the creative economy. We risk making culture elite, with only the rich being able to afford to go to gigs.”

Ticketek also notes that promoters like Gudinksi, venues and more are losing out due to scalpers.

“Promoters, venues and primary ticketing agents who take all the risks and make big investments in live entertainment are left to see a scalper who takes no risk walking off with obscene profits.”

Gudsinksi has also noticed some artists getting fed up – they’re doing all the work and some scalpers are making more money off each ticket then they are.

“Recently a few artists have started to question whether if you can’t beat them you should perhaps just join them but I’m hoping that a better solution can be met before that starts to happen as I know that’s an option the majority of artists would not wish to take.”

Chladil believes we'll see a rise in tickets on secondary sites unless the Government steps in.

“Something needs to be done about it. No one’s winning in the deal, except for people who have a lot of money to buy the tickets upfront.”

Live Nation Australia and eBay Australia would not comment for this story.