By John Breyault, Vice President of Public Policy, Telecommunications and Fraud
Today, I am testifying in support of pro-consumer legislation up for debate in the Connecticut General Assembly. The bill, H.B. No. 6298, would protect consumers’ ability to transfer and resell their event tickets. Some of the major provisions of the bill include:
- Prohibiting venue owners or ticket sellers from preventing the resale of tickets by season ticket or subscription package holders
- Prohibiting the denial of entry to consumers holding a ticket bought on the secondary market
- Requiring ticket sellers using paperless ticketing technology to give ticket buyers the option to receive a paper ticket
- Prohibit venue owners from requiring ticket buyers to pick up tickets from a “will call” window at the venue
- Prohibiting the holding back of more than 5% of available tickets from public sale, subject to certain exemptions
- Prohibiting venue operators and primary ticketers from charging a service fee when consumers choose to pick up tickets from a box office
These provisions are common-sense consumer protections. Given the increasingly consolidated nature of the live event marketplace, dominated by the “new” Ticketmaster (Live Nation Entertainment), it’s now easier than ever for this live event behemoth to abuse their near-monopoly.
One of the major ways that Ticketmaster is seeking to cut out competitors is through the proliferation of “paperless” ticketing. At an event with paperless tickets, consumers do not receive a physical ticket that they present at the venue to gain entry. Instead, the consumer is typically required to present ID and swipe a credit card at the venue on the day of the event.
Ticketmaster advertises the convenience of a paperless system and certainly many consumers will find this more convenient. Unfortunately, paperless-only events restrict consumers in a number of ways. First, since the ticket buyer must be present to redeem the ticket, a consumer who wants to buy tickets for their children to attend a Miley Cyrus show would have to stand in line to redeem the ticket so that their kids can get in to the show, even if the parent does not plan to attend. Paperless ticketing technology itself is still in development, as many attendees at a recent Justin Bieber show learned to their dismay while they waited in long lines to use malfunctioning ticket terminals. Ultimately, many ticket buyers were prevented from seeing any of the show.
The second major problem with paperless-only events is that they make it difficult, if not impossible for consumers to resell their tickets on the secondary market. Indeed, cracking down on the secondary market is a key reason that Ticketmaster and many artists, venue owners and event producers have embraced paperless ticketing. NCL supports consumer access to the secondary market. As opposed to previous decades, where the secondary market was synonymous with shady ticket scalpers, today’s online secondary market generally offers consumers a safe, secure venue for buying and selling event tickets. While consumers do often pay a premium for tickets on the secondary market, research has shown that 23% of tickets sold on these markets are sold at face value and 17% are sold a below face value. In addition, due to the rampant practice of holding back tickets for various credit card rewards programs, fan clubs, radio stations, sponsors or producers, the general public often has little opportunity to purchase tickets on the “on-sale” date. For instance, at a 2009 Taylor Swift show in Nashville, less than 12% of the 13,300 available tickets were made available to the general public. Similar incidents at Keith Urban and Hannah Montana shows suggest that this is not an isolated incident.
NCL believes that consumers should have a fair shot at buying an event ticket at a reasonable price. Given the high service fees and rampant use of holdbacks on the primary market, we think that laws such as those envisioned in Connecticut would do much to preserve consumer access to a safe and competitive secondary market. To help achieve this, NCL is playing an active role in the Fan Freedom Project, a coalition of consumer advocates, business groups and live event fans seeking to ensure fair access to live events and preserve a competitive, safe secondary ticket market.
To read my testimony from today’s hearing, click here.