Ticket Resale Could Benefit Artists
The symbol of the secondary ticket market is that umbrageous character standing outside Gillette stadium in a dark overcoat offering tickets for a less-then-modest profit. Now, however, big business is trying to get in on the action of a purported $10 billion worldwide market. Who are these companies, who are the pioneers among them, and how will they help the declining music industry?
In America alone, the secondary ticket market has been valued at $2 billion. Twelve states maintain a varying degree of regulation regarding the reselling of tickets. Ticketmaster, Stubhub (recently purchased by Ebay), and Ticketnetwork, are now lobbying state legislatures to relax their anti-scalping laws, and it may only be a matter of time before scalping becomes accepted legally.
Times have changed, and many of these players opposed legalization of a secondary ticket market in the past. Ticketmaster had tried shutting down resellers, arguing that, ticket buyers never actually own their ticket, but are simply purchasing a license to enter the venue. Those licenses, Ticketmaster argued, were not freely transferable and therefore could not be sold for profit. But by January 2008, Ticketmaster purchased Ticketsnow.com and established Ticketexchange. Both entities allowed Ticketmaster to profit from the original ticket sale, and again off the resale of the same ticket. As technology empowered Ticketmaster, it changed its stance. This has caused a lot of controversy, due to the conflict of interest caused by the same company acting as both the primary and secondary ticket seller.
In fact, Ticketexchange, was packaged to be a direct competitor of Stubhub, and promises customers a “100% guarantee” that their tickets will be authentic. Ticketmaster’s venture into the secondary market may be a little late in the game, for other players were there before. Nevertheless, given its size, its declared intention to be a player in this incipient and possibly soon-to-be legal market is catalytic.
Among Ticketmaster’s rival is Stubhub, founded in 2000 in San Francisco, CA by Eric Baker and Jeff Fluhr, two former Standford Business School students. Both Baker and Fluhr left the company in 2004 to form Viagogo, which is now one of Europe’s largets ticket resellers. In 2007, the company was purchased by Ebay, suggesting world-wide attention for resold tickets. Out of every ticket sold, Stubhub makes twenty five percent of the sale price. Sellers will receive fifteen percent less than their final price and the buyer will pay a service fee of ten percent on top of the ticket price.
Other non-peer-to-peer ticket resellers such as Gotickets.com offer fans tickets with “no service fees, no waiting time, and know your order is safe and secure”. Unfortunately Gotickets.com is also responsible for offering the infamous $63 Miley Cirus tickets at the modest mark-up of $3050.00 each. Many of the secondary ticket companies do not publish what percentage of the sale, if any, goes to the artist or team, opening what could be a new source of income for artists.
In the current climate, where ticketing companies are eager to exploit profits in a market they recently shunned as unethical, it seems artists should quickly unite to establish some form of guidelines regarding a return on the resold tickets. This is the same mindset many sport clubs already embrace. Sports teams argue that it is better to have a direct partner facilitating the secondary sale of tickets, than alienating fans by buying expensive tickets from an unaffiliated partner. If artists partnered with one of the secondary ticket sites, everyone would be better-off.
Secondary resellers, for instance, could offer artists exclusive resale rights creating a larger draw to their site. Artists would then be able to agree upon what percentage they received and get more revenue for their concerts. Artists could also help protect fans by agreeing to cap ticket mark-ups at a certain percentage, avoiding exorbitant prices for fans. With the music industry in disarray, it is critical that artists embrace new potential sources of revenue. Ethical dilemmas aside, technology and survival are dictating new modes of doing business that, if properly regulated, could lead to better monetization of live music, the darling of the current music trade. industry profiting.
Sources used, organized sequentially from the writing, are:
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HYPERLINK “http://en.wikipedia.org/wiki/StubHub#cite_note-15″http://en.wikipedia.org/wiki/StubHub#cite_note-15
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