Anti-Consumer Ticketing On The Rise

Steve Pociask President, American Consumer Institute
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Over the last few years, there has been an increase in a type of ticket to live entertainment and sports events that does not have the consumer’s best interests at heart.  This summer, “A-list” artists, including Arcade Fire, Eric Church, Garth Brooks and the Black Keys, will use this paperless system.

From a convenience standpoint, paperless ticketing seems to be a win for consumers — no need to worry about losing your tickets, along with the appearance of efficiency through technology.  While that may be the appearance, it’s anything but the case.

In reality, paperless ticketing puts restrictions on consumer’s ability to resell their tickets, limiting choice in what they do with their purchases. It requires the buyer to show up with a credit card and identification, and makes the entire party enter the venue at the same time. Should the buyer not be able to use the tickets and want to transfer them to a family member or to sell them, he or she is put in a precarious position. Because the artist and venue have final say over whether or not a fan can transfer those paperless tickets, the original buyer may lose 100 percent of their hard earned money if their plans changed and the tickets are nontransferable.

Assume a dad purchased a pair of Justin Bieber concert tickets at $200 as a gift for his daughter and her friend who attend college in another state. If these were paperless tickets, the dad could not send them in the mail or email a PDF to his daughter because the tickets would be tied to HIS credit card. That gift could be a total loss, unless dad drove to the venue and attend the concert himself. Maybe he did not read the fine print during the online purchase? Who would, considering there is a “shot clock” ticking down and rushing consumers to buy now? Paperless tickets are a deceptive practice that is not designed to protect consumers.

Why, then, have artists, promoters, venues and ticket sellers like Ticketmaster been pushing paperless ticketing? They claim that it is the only way to protect consumers from scalping, but the previous example shows that this is not the case.

In reality, paperless tickets are designed to eliminate the secondary ticket market – reseller competition. In fact, Ticketmaster has its own secondary market presence in TicketsNow, Ticket Exchange and TM+, which plenty of artists and venues have given their blessing to. TM+ even lists resale tickets alongside primary sale tickets. It is obvious that the industry does not have an issue with scalping – in fact, by withholding tickets from the public and offering them on resell sites, they are often the scalpers.

The industry has tried to enlist state legislators to help extend their control over the secondary market. Over the past few years, legislation was introduced with the support of venues and ticket sellers in Florida, Oregon, Tennessee and Rhode Island that would define the terms of a ticket in law (something that should be left to the contracting parties to decide) and give ticket sellers the legal right to sell tickets in whatever manner they choose, whether existing now, or in the future.

Such attempts are crony capitalism at its worst, and consumers in those states have been fortunate that none of the aforementioned bills became law. However, policymakers should be vigilant in keeping the secondary market competitive. That secondary market provides about $2 billion dollars in savings to consumers, which makes it a tempting target for the dominant ticket provider. The fact is that a competitive secondary market produces better outcomes for consumers than a monopolized market.