The Daily Need

‘Fan freedom’ and the battle over paperless ticketing

Grace Potter and the Nocturnals. Photo: Andrew Catellier/Flickr

Last month, not long after the band LCD Soundsystem announced they would be performing their final show this April, frontman James Murphy discovered that scalpers had bought up the bulk of tickets for their last show at Madison Square Garden, offering them up on resale websites for as much as $500 a ticket. Incensed, Murphy posted a lengthy rant entitled “f— you scalpers” on the band’s website, and announced that LCD Soundsystem would be including additional shows in an attempt to thwart resellers.

“I just want to give people who actually want to see us a chance to see us,” he wrote. “For a reasonable ticket price. And I want to drop the price of the [Madison Square Garden] tickets being sold by piece of s— scalpers.” This verbal lashing, of course, seeped out into the blogosphere, and has been one of the jumping-off points for a renewed discussion over fair ticketing policies.

Of course, scalping – the polite term is “ticket brokering” — is not a new phenomenon. Most entertainment seekers have taken part in the so-called secondary market of resold tickets at one time or another, either as buyers or sellers. It’s a time-honored practice that occupies the gray underbelly of the entertainment industry alongside the selling of pirated DVDs on the street and downloading television shows via BitTorrent.

In fact, shortly before Murphy’s outburst, I had just begrudgingly purchased my own “brokered” ticket for the blues-rock band Grace Potter and the Nocturnals – an $85 ticket originally priced at $25. Prices on resale websites like StubHub or Craigslist reflect true market prices, proponents contend, and it is true: Sellers will offer the highest price that buyers are still willing to pay. But the ire associated with buying a scalped ticket is less about the inconvenience of a 300 percent markup than it is the idea that the majority of the proceeds go not toward the beloved band, but a faceless middleman with no relationship to the performers. I could readily empathize with Murphy’s outrage and add in a few colorful phrases of my own.

In many ways, the war over scalping and fair ticketing policies is an old and intractable one, surging back to public attention whenever a band makes a fuss or legislators try to enforce restrictions on reselling tickets. Scalping is legal in most states, though some stipulate ceilings for secondary market prices – but enforcement is usually lax. Over the past few years, however, a number of venues and entertainment acts have opted instead for paperless ticketing – an alternate system whereby tickets are assigned to the purchaser. Under this scheme, tickets are either non-transferable, or they can be resold – but only through the original website of purchase, and under its specified terms. Ticketmaster, the nation’s largest ticketing agency, now offers a paperless option for event providers, and acts like Miley Cyrus, Bruce Springsteen and Justin Bieber have made use of it for their shows. But the move to paperless, though gradual, has brought a new set of legal and ideological disputes.

Right now, the battle over paperless ticketing is taking place on two fronts: one in Minnesota’s state legislature, and the other in a sort of war of ideas between Ticketmaster and StubHub. Last week, the Minnesota Senate Commerce Committee approved a bill that would prevent concert venues, promoters and sports teams from placing electronic restrictions on the sale and resale of tickets – in essence, blocking the aspect of paperless ticketing that makes it impervious to scalping. Other states have enacted similar legislation to curb the restrictions of the paperless system; New York mandates that a paper option must be made available with a paperless ticketing system, and Connecticut has proposed a similar bill. These legal disputes revolve around a central question: What is a ticket? A contractual reservation agreement or consumer property?

The big players in the ticketing business (namely the distributing giant, Ticketmaster, and the leader of the ticketing resale market, StubHub) are engaged in a hearts-and-minds campaign over this question with the sports-game-attending, concert-going public. Recently, StubHub, which supported the Minnesota bill, sent an e-mail to its users warning them about the ills of the paperless system, and referred them to the Fan Freedom Project, a movement against paperless tickets.

“Whether you want to buy a $1 ticket to an NBA game or enjoy continuous access to premium tickets for a sold-out event, Americans enjoy extraordinary benefits thanks to the competitive secondary ticket market,” the Fan Freedom Project’s website declares. “Restrictive paperless ticketing would end these advantages and are [sic] a clever new way to control fans even after a ticket has been purchased.”

The infographic accompanying the group’s message also illustrates the disparate outcomes for fans under both systems. Under the existing scheme, the graphic shows, last-minute cancellations or late arrivals still result in customers enjoying a hassle-free night of live entertainment. Under the proposed paperless system, however, customers are depicted being charged “big fees” for transferring tickets to friends, or having to wait for all latecomers to arrive before attending an event purchased on one credit card. In one scene where a customer’s grandmother buys a ticket as a gift, the credit card scanner malfunctions at the venue door and the grandmother is forced to wait in line for two hours.

The scenarios, while undoubtedly exaggerated, make a fair point. Who hasn’t been in a situation where they’ve had to back out of an event at the last minute and give their ticket away?

Two days after StubHub’s e-mail campaign launched, Ticketmaster CEO Nathan Hubbard responded on Twitter: “StubHub thx for coming clean – you stand with scalpers to take tix from soccer moms and kids and sell them back to them at 5x face value,” he wrote. In the following tweet, he continued, “Did u know 94% of fans would rather have access to good seats than transfer their ticket?”

It might seem that Ticketmaster’s paperless system, though flawed, does have fans’ best interests at heart — until one recalls that Ticketmaster owns a resale website of its own. In 2009, Bruce Springsteen lashed out at Ticketmaster for redirecting buyers to TicketsNow, an affiliated company that resold tickets to Springsteen’s “Working on a Dream” tour at premium rates even though shows had not yet sold out. After the ensuing outcry, Ticketmaster agreed never again to link to TicketsNow, but the questionable partnership between a primary distributor and the resale market had already been exposed.

Ticketmaster’s paperless system allows for ticket resale only through its TicketExchange service – a secondary market like TicketsNow but specifically for Ticketmaster paperless purchases. The paperless system does not eliminate the secondary market; it simply confines it to Ticketmaster’s own properties and collects all associated fees.

Ticketmaster has increasingly come under fire over the past several years for what customers are perceiving as increased monopolization over the live entertainment industry – first in the 1990s, when the band Pearl Jam launched a boycott in protest of high service charges, then again in 2008 with Ticketmaster’s acquisition of TicketsNow, and in 2009 when it merged with LiveNation, the country’s largest concert promoter. At last year’s South by Southwest music festival and conference, independent label owner Kris Gillespie declared that the merger was “immoral.” Ticketmaster’s Hubbard, notably absent last year, is attending this year’s conference, taking place this week in Austin, Texas, where he is scheduled to address critics’ concerns.

But StubHub and Ticketmaster are not the only major contributors to the current system. Artists themselves depress ticket prices, as noted by a fantastic 2009 New Yorker article (well worth the subscription fee), which leaves room for a thriving secondary market rife with high prices. It’s hard to deny that the ticketing system is dysfunctional, and this latest tiff involving LCD Soundsystem, Ticketmaster and StubHub is likely just another skirmish in the long and intractable war over fair ticketing policies. In the meantime, desperate fans and high demand continue to turn profits for scalpers in the secondary market. As for the fate of concertgoers? Last week, I went to see Grace Potter and the Nocturnals with an $85 ticket — $60 of which went to a faceless scalper – but as soon as the band hit the stage, it seemed worth every penny.

Further reading:

“The price of the ticket” – The New Yorker

“Tickets to hide” – Slate

 

Comments

  • Lori

    uh I hate scalpers soo much. lately I’ve noticed on Craigslist that if you resell your ticket , you’re asked not to charge more than face value.

  • http://twitter.com/whlteXbread Andrew Catellier

    Thanks for using one of my photos!

  • Anonymous

    I hate scalpers like StubHub, etc. and Ticketmaster both, but I still hate the scalpers more.