Ticket startups get heat from those terribly sweet promoters

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The so-called ‘secondary ticket market’ has a bad rep in the UK. Scruffy ticket touts outside concert venues have been the traditional conduit for unsold tickets and they operate under the guise of everything from a shifty looking guy outside the venue all the way through to agencies – some even linked to organised crime – who bulk-buy the biggest concerts to sell on for a fortune. Some resellers even advertise tickets before they have acquired them and profit from secondary tickets to charity events. eBay’s non-policing of the scoundrels out there hasn’t helped.

Which is why any Internet company like Viagogo, GetMein and Seatwave should expect to get some heat, and be tarred with the same brush, even though they are actually bringing a lot more transparency to the market and allowing fans to trade in a peer to peer fashion.

The government’s Culture, Media and Sport Committee today released a report actually saying the secondary ticketing industry had been ‘transformed’ by the Internet and provided convenience. And no wonder, since the opportunity online is substantial. This market is worth over £1bn a year in the UK alone. About 23 percent of tickets sold in Britain are now through secondary sites. Tickets for Led Zeppelin’s comeback concert in London last year originally sold for £125 pounds, but were resold for an average £7,425 pounds, according to Seatwave. (Although I would hardly call this a typical case).

But although the industry won’t be ‘banned’ by legislators, it must “clean up its act.” The committee and the government is reluctant to legislate but may do so if the sector does not form a voluntary scheme. Viagogo, Seatwave, GetMeIn and eBay have welcomed the report but think this would be a “tax” on secondary tickets and increase the price. Viagogo has already signed a deal with Warner Music Group where fans can buy tickets and receive additional downloads or videos, while Warner receives a share of revenues. This seems like a sensible path which could be developed further.

Alas, promoters are called this flourishing of the market “parasitic profiteering” which gives nothing back to the entertainment industry – but then they are the ones who make the prices so high in the first place, right? Outside of Live8/Aid, the entertainment and promotions industry is not exactly known for its charity towards fans in terms of prices. It’s an industry ripe for disruption and the same thing that happened to the music labels will now happen to the promoters as night follows day.

UK startup Seatwave, the fan-to-fan ticket exchange, last year raised $8 million in Series B funding from Mangrove Capital Partners, Atlas Venture and Oliver Jung, one of Germany’s most successful early stage business angels. Viagogo.com, launched last year by Eric Baker of US ticket reseller StubHub, is a well funded competitor, having raised $20m from Index Ventures and others. It is also backed by lastminute.com founder Brent Hoberman and David Katz, head of Yahoo’s sports and entertainment unit. Getmein.com was launched by Advanced Ticket Systems, creators of Soldouteventtickets.com.

  • http://blog.ivanpope.com Ivan Pope

    I never understood why reselling tickets at a market price is such a big crime. If there is demand and limited supply, I wonder why the promoters are leaving so much money on the table in the first place. Surely they can come up with a system of selling on tickets via a variable pricing scheme depending on demand? That’s what Stelios of easy***** has made his fortune doing. If they won’t do it, others can and will. If the demand is there, all the legislation in the world won’t stop it happening – it’s the third oldest profession!

  • http://www.redmonk.com/jgovernor James Governor

    cheeky tossers. “parasitic profiteering”? what about the outrageous “handling charge” the big events companies change?

  • Scott

    They deserve the grief.

    You try and buy a £25 ticket 2 seconds after it’s gone on sale for a gig that should take days to sell out and, wow, they’re all gone. But viagogo that instant has a load for sale at £90.

    What you’re also finding is half empty venues despite it being a “sell out”. If these companies are snapping up all the tickets and don’t shift half of them, what do they care as the one’s that they’ve sold they’ve sold for a fortune – and they’ve made a tidy profit overall.

    Personally, If a gig had sold out and I really wanted to go I’d rather go back to the “a shifty looking guy outside the venue” days.

    Part of me says fair play for exploiting a loophole and making a business model that is a great success. However, I’d prefer it if these legalised touts didn’t exist.

  • I Am Not Posting To Spam My Blog

    Cretins. “Parasitic profiteering”? Selling something because you no longer want or need it is not parasitic by any stretch of the imagination.

    Arbitrage, buying something explicitly because you know the seller isn’t selling it at market price and you can, could be called parasitic, I suppose. Albeit it’s only parasitic on whatever combination of ignorance/stupidity/pigheadedness prevented the primary seller from selling it at market price in the first place. But arbitrage is still an accepted and even necessary part of free market machinery.

    To be fair to the concert promoters, I think they probably would charge market price if they weren’t afraid of the effect it would have on their audience. If they charged £7,000 for a Led Zep concert, the audience would be filled with corporate types closing deals on their mobiles instead of attractive young people jumping up and down. But the current situation still seems to show a serious lack of imagination and willingness to fall back on cheap lawyerin tactics. Why not have differentiated prices – i.e. cheap seats? Let the corporate types stand at the front and fill the rest of the room with not-so-good views with the sweaty masses. It worked in Shakespeare’s day. There’s not much point saying it’s not fair that you have to pay for a view – it’s no more unfair than having it decided by who’s first in line.

  • http://uk.techcrunch.com/2008/02/11/seatwave-wins-25m-series-c-funding-to-expand/ TechCrunch UK » Blog Archive » Seatwave wins $25m Series C funding to expand

    […] tickets is not illegal in the UK and a recent Culture, Media and Sport Committee released a report actually saying the secondary ticketing industry had been ‘transformed’ by the Internet and […]

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