Ticket Holds, Pre-Sales & Transparency

Do you think you own the concert tickets you’ve purchased?  Various people from within the concert industry might disagree with you, claiming your purchase only gives you a license to attend the event listed on the ticket – a license that does not grant you the right to re-sell or even give the ticket away.

Potter and the Fan Freedom Project think otherwise.  Funded primarily by an online ticketing exchange, the Fan Freedom Project promotes a set of talking points that the organization frames as “Basic rights for fans and ticket owners.”  As stated in the FFP’s press materials, those points are: “Ownership,” “Ticket Transfers,” “Transparency,” “Fair Access” and “Competition.”

While subjects such as “ownership” and “ticket transfers” may seem pretty clear cut, ticketing “transparency” has only recently received coverage by mainstream media outlets via reports about 20,000 seat venues offering less than 5,000 seats to the general public, with pre-sales for fan clubs, credit card holders and other marketing practices resulting in most of the seats being sold before public onsales commence.

It could be argued that the people who join fan clubs or use their credit cards to take advantage of pre-sales are the true fans in any particular market.  After all, they are often the ones that have stuck with the act since the beginning, buying CDs, tickets and merch.  For them, a pre-sale ensuring them decent seats is merely saying, “thank you” for their support.

While talking with Pollstar, Potter described scenarios where 20,000-seat venues are only offering approximately 25 percent or less of their seats for sale to the general public. 

Potter also took issue with ticketing practices meant to thwart scalpers, such as nontransferable policies requiring purchasers to appear at will-call and show their purchasing credit card in order to pick up the tickets, at one point saying that “it’s harder to get into these concerts than it is to get on an airplane.”

While Potter and the Fan Freedom Project represent one side of the issue, it is a side that needs to be explored.  Especially if you buy concert tickets.

Let’s start with the basics.  What is the Fan Freedom Project?

It’s focused on live events, ticketing in particular.  It’s probably one of the industries that an extraordinarily number of people are interested in and engaged with, and they know the least about.

What funds the Fan Freedom Project?

We are substantially funded by StubHub and we have been public about that since day one.  But that’s not the reason 150,000 people support us and agree with us.  I will tell you that there are very, very, very few consumers that disagree with anything we say once they hear us out. 

It typically takes them about 30 seconds to hear us out and say, “Ok, we agree that, if 30-second sell-outs are happening because scalpers are jumping online with bots and grabbing all the tickets, that’s bad and they should be penalized.  And if a 30-second sell-out is happening because Justin Bieber is pre-selling 93 percent of the seats in the house to fan club guys, VIPs and AMEX black card holders, that’s also unfair.”

And so, [with] a little sunshine, a little disclosure, at least people can understand the world that they are unhappy with. And then fans can make smarter choices.

And when consumers find out Justin Bieber is scalping his own tickets, or Katy Perry is scalping her own tickets, through anonymous marketplaces, I think they get a little taste for who they’re going to trust.  And that’s not a bad thing, either.

Our view is, particularly in publicly owned arenas, tell the consumer the truth.  The consumer gets to know the truth when they buy a car.  They get to know the truth when they buy a product on the store shelf.  Just tell them the truth.  If Justin Bieber is only going to sell them 1,000 seats when the house has 14,000 seats and the rest of them are pre-sold, fine.  If you’re going to sell the tickets for $2,000, fine.

Bon Jovi, on their tour, and The Rolling Stones … they see what the secondary market does with their tickets, and they say, “Skip the secondary market.  We’re going to make that money.”  And we have no trouble with that.  Not a problem.  But if you’re going to lie to your consumers, they should know.

For instance, we asked the Target Center in [Minneapolis], which is owned by the public.  In fact, a citizen of Minnesota asked the Target Center, “Tell us how you’re allocating tickets, for instance, for Justin Bieber and Lady Gaga shows.” And the response from the Target Center was “That’s a trade secret.”

You’ve already mentioned a couple of artists – Justin Bieber and Katy Perry.  What’s up with the Fan Freedom Project taking on Kid Rock and how ticket sales to the fan club are nontransferable?

Two things.  No. 1 – if artists are going to treat everybody like scalpers just to stop the handful of scalpers that are out there, then we’re going to let fans know.  Also, if you’re going to sell tickets that are nontransferable, then consumers should know that before they buy the ticket.

As you know, so often a consumer will go to a ticket site, it’s the public onsale at 10 a.m. on a Friday, and they’re in a frenzy clicking five computers at a time trying to get on to that site. They’re not reading the fine print.  And that’s where you’ll find it, in the fine print that says, “This is a nontransferable paperless ticket, you’re never going to see this thing, you’ll have to show up at the door yourself, you’ll have to bring your purchasing credit card.”  We think consumers should be aware of that before they pay $60, $80, $125 per ticket.

Speaking of having to bring the purchasing credit card – that pretty much requires a fan to have a credit card if they want to go to concerts, as opposed to using cash.

It does do that. And there’s an extraordinarily percentage of Americans that do not own credit cards, particularly after the mortgage debacle.

Or people under 18.

That’s true, too.  So you buy your kid concert tickets, you have to go to the gate and stand in line so they can swipe your credit card or [you’ve] got to give your kid your credit card and your photo ID because they have to match.

Do you know it’s harder to get into these concerts than it is to get on an airplane?  Think about that. An airline doesn’t make you show your credit card. … You can always buy an airline ticket for somebody else. I can buy an airline ticket for you on my credit card that’s in your name that you can pick up at the airport.

It was also interesting that this week, the Green Day shows at the Barclays Center [in Brooklyn] and in Rochester, our understanding is that the band didn’t even know the tickets were being will-called only for all the floor seats at the Barclays Center. And, when the reporters called, the band said, “We don’t know what you’re talking about.” Then, all of a sudden [one] day later they they reversed that. They’re still not emailing them to you, you have to go to the window to get them [but you can pick up the tickets in advance].

I gotta tell you, I’d rather have those tickets in hand so I can hand them out to one of my buddies in case one of them is late for the show and I don’t have to wait for them at the gate.  The beauty of the digital ticket is when you can hand them to your friends, email them to your friends.  But, before they were totally nontransferable and you had to pick them up on the night of the event at will call. Now you can pick them up in advance at will call.  At least it’s an improvement for consumer convenience. What’s interesting is that the band denied knowledge of the fact that the tickets were being made will-call only and not transferable.

We’ve been talking about issues such re-selling and transferring tickets. Are you addressing other issues, such as service?

No.  The service charge business, if you will, the model is silly.  For instance, we’re not complaining about prices.  We’re not the group that’s interested in cheap beer and free parking. That’s too easy. We’re not asking anybody to lower their prices.  I think that if companies were smart, they would not break out their service charges.  They would just put them in the ticket price.  Consumers get more offended by service charges than they do … if it’s an $80 ticket, they pay $80.  When it’s $60 plus $20 in service charges, it makes them angry.

Do you think the concert industry as well as primary ticket sellers have only recently become aware that consumers may not be all that pleased with the way ticket sales are handled?

I don’t know. If you’re an artist or a band manager, touring is the last, best place to make money.  You’re not selling a lot of albums these days. It used to be you would tour to promote your album. Now you sell albums to promote your tour.  The business has changed … dramatically and I think everybody is trying to figure it out.  There certainly was an impression until probably three years ago that the concert business, that the demand was inelastic, that you could raise prices, raise prices, raise prices and still sell out.  I think that started to change about three years ago and now folks are trying to adjust prices and things like that.

When it comes to things like the ticket being property, nobody tried to stop you from re-selling tickets until Ticketmaster decided it would be a great idea.  Now that tickets are digital, we have the ability, the technology to stop you from transferring that ticket.

Ticketmaster is going to bands saying, “We can help you make more money.”  I think that’s part of it. The business people, the folks whose business is profits … not folks whose business is consumer welfare or consumer interest. Ticketmaster’s clients are venues, Ticketmaster’s clients are bands.  Their clients are not consumers. I think that’s demonstrated because they’re pushing the envelope. I don’t blame them for pushing the envelope but then consumers have to push back.

Some people say scalpers are bad or re-selling tickets is bad because the artist doesn’t make any money from it. My view is the artist got their money.  They got paid full price. If they want to raise their ticket prices, raise the price.  Once you’ve set your ticket price at $80 or $100 and I pay you the $80 or $100, what’s the problem? You’ve been paid.

Where do you see the Fan Freedom Project a year from now?  What battles are on the horizon?

I think this battle is just getting started.  The more consumers know about the concert industry and the ticketing industry, the more they want to know and the more they want to reform it.  When we surveyed consumers and said to them, “Do you know tickets are held back in concert venues?”  They said they weren’t surprised by that. And we said, “What do you think is the percentage that’s held back?” They answer, “10 percent, 15 percent,” some went as high as 25 percent.  When we told them it was 40, 50, 80 percent, they went from, “Gee, that’s not very good” to, “Gee, that should be illegal.”

I think it’s because they feel duped because they’re being encouraged to get crazy and frantic, to go online and open up four computers to try to buy concert tickets.  And then they’re being re-directed to TicketsNow.com and finding out it’s the artist scalping the tickets to them. And they feel duped.  They feel as if they’ve been played and it doesn’t feel good.

(For more information about the Fan Freedom Project, click here for the organization’s website)