Ticketing Companies Step Into The Light At Subcommittee Hearing

Subcommittee Hearing
Caroline Brehman / CQ-Roll Call, Inc / Getty Images – Subcommittee Hearing
Amy Howe, President and COO of Ticketmaster, shakes hands with Rep. Bill Pascrell (D-N.J) before a hearing conducted by the Subcommittee on Oversight and Investigations of the House Energy and Commerce Committee Feb. 26.

Representatives from six North American ticketing marketplaces were questioned and, in some cases, fired shots at each other during the “In the Dark: Lack of Transparency in the Live Event Ticketing Industry” congressional hearing delving into the ticketing industry Feb. 26. 

Characterized as a $9 billion industry in the U.S. still “rife with practices harmful to consumers,” the Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce called the hearing primarily to explore five consumer protection issues: hidden fees and all-in pricing, restrictions on transferability, deceptive “white-label” websites, ticket availability (or “holds”), and speculative ticketing. 

Testifying at the hearing under oath were Ticketmaster President and COO Amy Howe, AXS CEO Bryan Perez, StubHub Vice President and General Counsel Stephanie Burns, Vivid Seats Vice President of Legal Affairs Ryan Fitts, TicketNetwork Founder and CEO Don Vaccaro, and Tickets.com President and CEO Joe Choti. 

The hearing opened with remarks from Subcommittee Chair Diana DeGette, Committee Chair Frank Pallone, Jr., and several ranking members, followed by statements from each witness and an extended period of questioning from various elected officials to the witnesses.

The questioning was limited in scope, as each representative was allowed only five minutes of time. Inventory was one of the more disputed issues among the witnesses, as Burns, Fitts, and Vaccaro all argued that primaries’ holding inventory and not disclosing when it is all made available was a tactic to create the illusion of scarcity to put pressure on consumers and increase demand. 

Morgan Griffith (R-VA), referenced a plugin that allows brokers to view remaining available inventory for AXS shows and asked Perez if there was benefit in the disclosure of that information to consumers. Perez responded, “In my opinion there is no benefit in the disclosure of that information to the consumer. I think the brokers are using that information to try and gauge supply and demand so they can maximize profits.” 

Perez later explained that as inventory gets low, one entity might come in overnight and “scoop up all the tickets,” and artificially raise the resale market price. Perez conceded one disclosure he would be more comfortable with is the total number of tickets, as it was previously mentioned that sports venues’ capacities are known, but different stage and show configurations change capacities for live music events.

The most tense exchanges were between Howe and Burns. In her opening remarks, Burns took multiple jabs at Ticketmaster, claiming the ticketing giant’s dominance made it very difficult for StubHub to enter the primary market, that its use of resale-restrictive technology through SafeTix is anti-consumer, and that it engages in “blatant data grabs” by forcing customers to register with it to access tickets purchased on other platforms. 

Howe on multiple occasions directly disputed or responded to Burns’ comments and Ticketmaster fired its own shots in the form of exhibits attached to Howe’s opening remarks titled “Deceptive Pricing: Markdowns Paired with High Fees,” “Deceptive Pricing: Inaccurate ‘All-In Pricing,’” “Ticketflipping.Com,” “Deceptive URLs” and “Speculative Ticketing.” Among other things, the documents show instances in which secondary platforms like StubHub, Vivid, and SeatGeek listed prices lower than Ticketmaster on the initial screen available to consumers, but increased fees later on in the process, ending up with a price comparable, or even higher to the check-out price on TM. Another exhibit criticizes StubHub’s “all-in” price display option as inaccurate.

There was some tough talk by legislators about calling for more regulation from the FTC, and similar to last year’s “That’s The Ticket” FTC workshop, all witnesses agreed they would welcome more regulation, particularly of “all-in” pricing (showing total price on the first screen) if it was consistently enforced.

Speaking to Pollstar after the hearing, Gary Adler, Executive Director and Counsel for the National Association of Ticket Brokers told Pollstar: “One of my biggest takeaways was when the specific question was asked of each panelist if they believe federal legislation was necessary, [particularly with all-in pricing] each panelist answered ‘Yes.’”

Multiple committee members made reference to The BOSS Act, essentially a reworking of a bill that has failed to gain passage since its initial submission in 2009, introduced by Sen. Richard Blumenthal and Reps. Bill Pascrell and Pallone in June attempting to bring “transparency” to ticketing. That bill is backed by the NATB, but hasn’t gained traction, as it requires primaries to disclose the total number of tickets and to not restrict resale, while demanding secondaries disclose the face value of all resold tickets. 

The emphasis of future legislation may still be  disputed, though. When asked what the most significant anti-consumer practices in the ticketing industry are, Ticketmaster and AXS seemed in agreement: bots, deceptive websites, and speculative ticketing. When asked the same question, StubHub, Vivid and TicketNetwork agreed it was transferability. The point came up repeatedly and Burns claimed in her opening remarks that they expect all Ticketmaster transactions to use SafeTix technology (which does not necessarily restrict resale) by 2021. 

Fitts directly expressed concern for his company’s future business when he said: “The danger with SafeTix – which sounds like a nice product, but it has dangers – is that eventually that becomes a walled garden for only Ticketmaster to operate.” In the spirit of the event, Ticketmaster did respond to these claims of creating a walled garden by stating that transferability was only restricted on 0.2% of tickets (at the client’s behest), and 70% of shows do not sell out and thus never require any restriction on transferability.