The sneaky online ticket rip-off

With festival season just around the corner, what are your chances of getting a ticket?

If you have ever tried to buy tickets online you will know that the more popular the event, the harder it is to get a look in.

Indeed, when I tried to do this, tickets went on sale at 9am, and minutes later they were all gone. I was online and on the phone at the same time, but no luck. A quick search on the internet then revealed plenty of tickets on other sites, for hugely inflated prices.

It led me to ask: who are these magical ticket-hunters with super-fast broadband connections?

Overview of the online ticket selling process

Promoters set the prices and distribute the tickets via the venue or a Primary Agent. The Primary Agents, websites like Ticketmaster, sell the tickets and make their money through booking fees.  Tickets are then eligible for legal resale, and this usually means via a Secondary Agent.

What are Secondary Agents?

If you buy a ticket, then later change your mind, you could sell it using a Secondary Agent. In the past, you might sell to a tout outside the venue, but while traditional touting is illegal, internet-based resale via a Secondary Agent is not.  

Prices are not regulated, so if the demand is high, the price will be high. The ticket price will effectively be set at the price the market will bear. If you are willing to pay it, that’s what it costs.

How do they get the tickets?

Secondary Agents may purchase directly from the box office, buy unwanted tickets from individuals or buy wholesale from tour operators who have failed to sell hospitality packages. 

The Office of Fair Trading has found evidence to suggest that there are also less transparent methods, such as the use of high speed dialling equipment to increase chances of getting through to the venue first. 

The problem

Ticketmaster is a large US company and a major Primary Agent in the UK. It had a longstanding agreement with Clear Channel Communications (a promoter and owner of a number of theatre and concert venues) who then formed a spin-off company in 2005 called Live Nation, which merged with Ticketmaster.

This merger was initially opposed by the Competition Commission, but it later reversed its decision.

Ticketmaster also has a sister company called TicketWeb which provides internet box office facilities for venues and promoters, and an agreement with the Football Association for match ticket sale.

That just about covers the whole market. Oh, except for its ownership of a major Secondary Agent, Get Me In. Every resold ticket earns Get Me In a percentage of the profits. A Companies House search shows that Get Me In, TicketWeb and Ticketmaster share the same UK registered office address, which is cosy.

A Watchdog investigation looked at just how quickly tickets sold through Ticketmaster appeared on its partner site, Get Me In. 

It found that in less than half an hour tickets were being resold for considerably more. Tickets were also being sold on sites like eBay. If a ticket is found for sale on eBay and priced excessively, Ticketmaster reserves the right to cancel that ticket.

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So, you CAN sell a ticket with its partner company, which takes a percentage of the profits, but it would appear it’s not so keen on you selling the tickets on eBay, where Ticketmaster will get no percentage of the profits.

(And what profits these are! Rod Stewart tickets for his 2005 concert, initially on sale for £50, were being sold on eBay starting at £349, a healthy 598% mark-up  - as if being a  Rod Stewart fan were not already punishment enough!)

The solution?

An Office of Fair Trading report has concluded that the legislation already in place* is sufficient to protect consumers. This legislation protects you against things like non-receipt of tickets, or misleading prices, but it does not address the problem of tickets being snapped up immediately and sold for extortionate prices elsewhere.  

Strict new legislation about ticket resale is being considered. The Bill, proposed by MP Sharon Hodgson, would allow “event organisers to prevent their tickets being resold by unauthorised retailers for a price greater than 10% above the ticket’s face value.”

There is debate that this would merely push the initial price of the tickets even higher, while encouraging a thriving black market. There would certainly be substantial problems in enforcing this type of legislation, but surely it’s a step in the right direction?

Both the Office of Fair Trading and Trading Standards have reported a surprisingly low number of complaints about this practice. This is largely because people feel they have no choice but to accept the situation, and don’t bother complaining. So, if you want to see a change in the ticket-selling process, the onus is on you to complain, complain, complain!

*Price Indications (Resale of Tickets) Regulations 1994, Enterprise Act 2002, Consumer Protection (Distance Selling) Regulations 2000 and the Unfair Terms in Consumer Contracts Regulations 1994.

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