Review of the DCMS ‘Live Music’ enquiry of the secondary market
Next up was the chance for the resale sites to share their views.
It was meant to be a representative from Viagogo and StubHub. Unfortunately Cristopher Miller, Head of Business Development from Viagogo did not show up. Viagogo sent a letter to the committee on the evening before the enquiry stating they would not be showing up because of their recent legal action against Kilimanjaro and the CMA.
The FTA found this very disappointing, for there to be a balanced investigation it is vital that all the key players turn up and answer questions so that there can be a better understanding of how the industry works.
Wayne Grierson Managing Director of StubHub took on the task of defending the importance of resale sites himself.
There was a mention of the fan guard guarantee that protects consumers purchases, there was also mention of all the safety checks they conduct on business sellers to make sure there is no criminal links or activity. He also said that StubHub are in the process of making their business fully CMA compliant in line with the deadline of January 2019.
The FTA welcomes the measures implemented by StubHub because they are crucial to making sure consumers get the safest buying experience. We are all about making sure responsible operators are providing tickets to consumers.
The issue of the price also came up, there was a concern that prices are too high on secondary sites and the fees that StubHub charge also add to this. Mr Grierson explained that the very high prices that are often quoted don’t actual sell on their website, in fact 51% of tickets sell below face value.
The highlighting of a few very highly priced tickets is nothing new. The media have always attacked this side of resale claiming it supports ‘rip off’ prices, so it was interesting to hear that at StubHub 51% of their tickets sell below face value and the tickets that are priced high don’t sell.
There was also mention of a price cap so that these prices could be kept in check, and be seen as fair. It was said if the reason StubHub gets so much bad press is because of the high prices then why not implement a price cap.
This seems like an odd statement to make, specially seeing as there was no mention of price caps for the primary market. Recently we have seen some events being sold on Ticketmaster through their Platinum range that could be seen as unfair and a ‘rip off’.
The FTA believes that it should be the market that decides the price of a ticket not a price cap. Fans will decide how much a ticket is worth by choosing to buy the ticket or not. The evidence from StubHub seems to suggest that fans aren’t silly they won’t pay the high prices, instead they will wait for the prices to come down, which is probably why 51% of tickets sell below face value.
At the FTA we agree that the fees that resale sites set are high and they do bump up the price, specially seeing they charge both the seller and the buyer. This is definitely an area that the secondary sites could look into being more conscious of consumer fairness. It is also an area that the primary market could look into as the fees they charge consumers are also a big reason why prices are so high.
We have no problem with businesses charging a fee for a service but if price is an issue then its only fair to look at all the different reasons why ticket prices are at the level they are.
The question around business sellers also came up in the enquiry in particular what preferential treatment they get. Mr Grierson explained that some business sellers do get paid when tickets are delivered, so before the event unlike consumers who will only get paid after the event. He explained this is because business sellers have a very low drop rate i.e. the chances of having any issues with the ticket they supplied is very low, 0.01% to be exact.
It is always great to see statistics like that and good to know that the businesses selling tickets on StubHub are reputable and a safe way for consumers to buy their tickets. We have always said there should be a place for responsible brokers in this industry, get rid of the bad apples with a proper enforcement and legislation and let responsible business do what it does best, which is to provide choice for consumers.
Mr Grierson was also asked about StubHub’s relationship with Google and how much it paid to come top of the searches. Also, he was asked if he thought it was fair for the consumer if StubHub comes top in the search if an event has not sold out yet. Mr Grierson explained that StubHub don’t monitor the primary stock so don’t know when an event is sold out, they are just offering an option for consumers to buy or resell tickets. He went onto to explain that sometimes better seats are available on resale than on primary, so it offers consumers a choice.
There has been a lot of talk about the role of Google with how businesses use it to their benefit. It is important to remember that all businesses have the opportunity to use Google if they want to. As long as resale sites like StubHub are compliant with the laws then there shouldn’t be an issue, they have a product to sell just like any other business.
The FTA believes in consumer choice and resale websites offer the greatest amount of choice 24/7, that is something the primary market cannot offer.
Overall the enquiry into the secondary market was good, it brought up some good questions about the high fees that consumers face when buying tickets, it gave a chance for StubHub to explain their relationship with business sellers and how they monitor them to make sure there is no criminal activity.
One thing that was a bit disappointing was that we feel a bit more could have been done to defend the consumers right to resell. There were a few times that Damian Collins mentioned that StubHub shouldn’t be selling tickets that are marked as not for resale, and that made them non CMA compliant. However, the law does state that consumers do have a right to resell and this should have been made clear in the enquiry. Promoters/venues/artists/primary agents can’t just do as they please with cancelling tickets as consumers have rights.
We now look forward to when our President Stephen Lee and board advisor Pete Bowyer get their chance to share their views in front of the committee, it will be a great opportunity to address some of these issues. We feel this is the benefit of having the FTA campaign, we can be a voice for consumers and give a more in depth view of everything that is going on in the ticketing eco system.