Opinion: Ticketmaster condones and legitimises ticket scalping – so why does the industry still use their service?

Yesterday, Crowded House tickets went on sale for two very special shows at the Sydney Opera House Forecourt, celebrating the 20th anniversary of their “Farewell” concerts at the same venue – and of course they sold out almost immediately. While organisers were quick to announce a third show (that will go on sale tomorrow at Midday), this didn’t stop fans from heading to the group’s Facebook page to vent their frustration that they didn’t get tickets.

Many who were leaving comments were quick to point something out – Ticketmaster’s own site was reselling tickets and engaging in ticket scalping. Dean McGrath of Brisbane band Rolls Bayce left one of the more apt messages on the board:

Hey Crowded House, or rather the people who moderate their FB page. Please take these comments with the respect intended, I’m a big fan.

A lot of fans missed out on tickets for your shows today. A lot will miss out again when they try to purchase tickets for the newly announced 3rd show. While I understand there is high demand, a large portion of those tickets have gone to scalpers, re-selling at massive prices via the Ticketmaster Australia Resale site. I’ve seen a comment from you stating you don’t have any control over Resale prices for your upcoming shows. Incidentally that’s the same line Ticketmaster have been using all day.

What is in your control though is who you work with, surely. Ticketmaster/Live Nation are providing a platform for scalpers to rip off genuine fans. It’s no coincidence they were the most vocal opponents of new anti-scalping laws. I know you care about your fans, but your ticketing partners do not. They’re refusing to listen to consumers, perhaps they will listen to you? I got my 2 tickets, against all odds, but I’m appalled that others have missed out while scalpers will make a huge profit by exploiting a much loved band.

Though Ticketmaster (who were tagged in the post) didn’t respond to the issue, those who moderate the Crowded House Facebook page were quick to reply to both Dean and a lot of others on the page:

Hi Dean. I understand everyone’s frustration. Scalping is a big problem for all large events. Ticketmaster argue that their resale platform helps prevent tickets being sold, potentially fraudulently, on eBay, gumtree etc. At least tickets on Ticketmaster Resale are guaranteed. However we do have a big issue with those tickets being offered to people who have just missed out on purchasing a ticket.

I have been monitoring sales all day, and the average purchase is just under 3 tickets per transaction. And at any given time there have been 50 – 60 tickets available out of 10,000 on Ticketmaster Resale. While I do disagree with the whole concept of Ticketmaster Resale, in this instance I actually don’t feel the scalping is too out of hand – in fact the level is way less than usual. The pure simple answer is that way more people want to buy tickets than there are tickets available. There are a handful of unscrupulous scalpers out there, but nowhere near as many as comments on this Facebook page would suggest. Team CH (Bill)

Now, we have to keep in mind here that Crowded House ultimately don’t choose their ticket sellers. The venue does. They could take a stand as much as Pearl Jam did in the 90s (as one reply pointed out), but at the end of the day, Sydney Opera House use a mix of internal sales and Ticketmaster for all their events, and there would be exclusive agreements in place for this. But what Bill has shown is a common trend in the industry – to brush it off as a minor percentage of tickets. Ultimately this is missing the point, even if this was “way less than usual”.

The issue isn’t so much that the scalping is happening – there’s nothing new here – it’s that the company who are selling the tickets, Ticketmaster, are legitimising the act itself by allowing their own ticket buyers to sell their tickets at a massive markup.  At the time I write this piece, there are tickets going for almost $1,000 through the Ticketmaster Resale system – some nine times their face value. These are tickets that are being sold at a premium by scalpers, with no intention other than to make a sizable profit and rip off desperate consumers.

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This begs the question: How is this even legal?

Well, in some Australian States, it’s not. In Queensland, for instance, a law was passed in 2006 as an amendment to the Queensland Major Sports Facilities Act 2001 that placed explicit limits on what was legal in the terms of a ticket resale. It only applied to certain venues – and was mainly driven by the sports industry – but the terms were pretty simple: you could still resell a ticket, but only for a maximum value of 10% more than its face value, to cover costs e.g. shipping, effort of resale or whatever the argument might be. There are similar laws in South Australia through the Major Events Act 2013, and in Victoria – though again this primarily is for the sporting industry, and not the live performance industry*.

Ticketmaster will be the first to raise the point that none of the above has stopped ticket scalping, and that their ticket resales do operate within legal limits (and their own internal terms and conditions), but there’s a big difference between trying to put laws in place to prohibit the act, and actively engaging in the act yourself.

To defend their actions, they’ll ensure you look at a notice they have on the ticket page: All tickets on Ticketmaster Resale are listed by sellers at prices they set. In other words, it’s not us, it’s them!  Meanwhile, right below it, you’ll also see one of the many ridiculous fees that Ticketmaster DO set: a delivery fee of $17.90. I know that Australia Post raised their costs not too long ago, but come on. And – surprise surprise – they also take a fee based on the price of the ticket, just like auction site eBay.

So it should come as no surprise that neither company were in support of anti-scalping legislation in NSW last year (which, to be fair, was a bit heavy handed), as reported by SMH, and that Ticketmaster in particular were suggesting “self-regulation”. They also described their own resale service as an “anti-scalping” measure. Yes, a service that allowed their users to resell tickets at any price they deemed appropriate, was “anti-scalping”. Just because you are changing the terms of your ticket sales doesn’t suddenly change a dictionary definition.

Ticketek, Ticketmaster’s primary competitor in the Australian market, have taken the opposite approach – they want more to be done in terms of anti-scalping regulation. The different between the companies? They don’t have a resale function, and thus don’t receive any kick-backs from the practice. The same can be said for other players in the local market like Moshtix and Oztix.

Ticketmaster might be quick to say this is about ease of transferring tickets – but next to no one changes their mind within hours of a show going on sale, and those that do would easily be able to wait a little closer to the show to sell their ticket – which is how Splendour in the Grass operates through a special cost price resale service set up through Moshtix. And if they are legitimate re-sellers, then they would happily sit within a legal 10% threshold, instead of taking advantage of desperate punters.

Opponents of anti-scalping laws, as quoted in that SMH article, try to relate a ticket purchase to buying a house. If you buy a house, you should be able to sell a house. But this argument couldn’t be more disjointed. Let’s stick with the house example for a moment. Unless you got really lucky, or did something dodgy, the market indicated the cost of your house when you bought it. You paid the most that anyone is going to pay for that house today. Now, give it a few years, a renovation and an improvement of the housing market in your area, and you can walk away with a good 30% profit, especially in a strong market like Sydney. But you can’t resell the property for 300% mark up within a few hours.

Though it’s easy to argue that the market is determining the resale value, the value of the ticket had already been determined by the sale. To add insult to industry, you’ll notice that on the resale website, the original value of the ticket isn’t posted anywhere. In fact, according to multiple sources (I’ve never purchased a resale ticket myself), the ticket itself doesn’t quote the price on it when you receive it through the Resale system. The face value has thus become non-existent.

So now it’s time to answer the question presented by this article. Why hasn’t the industry done more? While exclusive venue rights is part of the problem, ultimately it comes down to the fact that Ticketmaster is a subsidiary of Live Nation Entertainment – the world’s largest touring company. So long as Live Nation condones the behaviour, it wouldn’t matter if every other company jumped ship from the Ticketmaster brand. Live Nation’s tours and venues would always buoy their fee-drenched services.

But, that hasn’t stopped the industry from doing what they can, within their existing terms. Crowded House’s venue in question, the Sydney Opera House, who use Ticketmaster, has made a stand with a notice on their website saying that Ticketmaster Resale tickets may be refused entry on the day. Ticketmaster Resale would offer a refund in the case you were denied entry, but if the very venue you’re selling for is classing it as scalping, how can you argue that it’s anything else?

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Venues doing this, artists refusing to allow the practice and punters refusing to purchase through the service are likely to be the only ways we’ll see something like Ticketmaster Resale discontinued.

I’m not against the concept of Ticketmaster resale by any means. I’ve been burnt by Ticketmaster in the past where I wanted to change the pickup name of a ticket, and they wouldn’t permit it, nor change it to an alternate service (even for a fee) which meant that a ticket never got used. Both the ticket, and my money, went to waste. A resale option would have been fantastic. But legally allowing sellers to resell their tickets doesn’t have to create an ecosystem that encourages, supports and legitimises ticket scalping and profiteering.

The Ticketmaster Resale enterprise is just that – a money making enterprise. If the music industry is serious about ticket scalping, they should do what they can to stop supporting Ticketmaster until the company – at the very least – makes the reselling feature fit within what is fair. Now I’m not pretending like scalping is going to go anywhere if the industry is able to take a stand against Ticketmaster. Sites like eBay and Gumtree will still exist, and scalpers will still have their field day there and out the front of venues around the world, wherever law enforcement isn’t snapping at their heels, so long as the public are willing to buy them. But the legality behind these transactions is clear, and buyers engage in them at their own risk. No one in the industry is sitting there and going “this is OK”. And that’s the problem. Ticketmaster and all the companies that use them are legitimising ticket scalping.

And no, that is NOT OK.

*read more about all these laws in this report from the Parliament of Australia.