Fans deserve protection in the ticket marketplace

This column originally appeared in The Hill on June 16, 2016: http://thehill.com/blogs/congress-blog/technology/283600-fans-deserve-protection-in-the-ticket-marketplace

There has been a lot of news recently about the difficult experience some fans have when it comes to buying, selling or transferring tickets to live events. In fact there are two bills now introduced in Congress dealing specifically with protecting the rights of ticketholders and fairness in the tickets ecosystem. The best interest of fans should absolutely be put first. Practices and policies that restrict a ticketholder’s ability to transfer his or her ticket, the lack of transparency surrounding the mystery of why so few tickets actually go on sale to the general public, and software “bots” that buy up the fraction of remaining tickets that do become available in a flash are just a few of the issues that must be addressed. It is important, however, for lawmakers to consider the full picture of issues and facts before prescribing solutions that are well intended but risk going too far or not far enough.

For starters, competition in any market – from laptops, cars, smart phones and more – has always proven favorable for consumers. Thus a competitive, functioning secondary market for tickets is a good thing. It provides many choices and conveniences for fans, particularly those who might need to sell their tickets at the last minute or those who want to attend a sold-out concert and desire seats in the first few rows. Professional ticket brokers in the secondary market have provided this and other services to their customers for decades. And, importantly, not all brokers are created equal. For instance, those who meet the eligibility requirements for membership in the National Association of Ticket Brokers (NATB) are professional companies that provide a 200% money back guarantee to its customers and denounce the use of software bots.

The tickets environment is multifaceted and complicated. It’s not easy to get an overall picture of all the players involved, from the casual fan selling a ticket, to professional brokers, to unscrupulous “scalpers,” to the corporate primary and secondary sellers who are able to heavily influence the secondary market. The Office of the New York Attorney General conducted an investigation recently that uncovered some truths about the ticket market that have been otherwise successfully obscured for years.

Most surprising is the finding that the “majority of tickets for the most popular concerts are not reserved for the general public.” The numbers are astounding. For instance, a mere 10% of tickets for a 2013 Justin Bieber show in Nashville were made available for general public sale while the rest were held back and set aside for presale and insiders.

It’s no wonder demand, and therefore prices, in the secondary market can lead to frustration. Reinforcing this,the former CEO of Ticketmaster echoed this problem in a blog this week, saying, “even before that sham of an on-sale happens, a big chunk of the best seats are held back from ever going directly on sale…on average, less than half of all tickets go on sale to the general public.”

Both bills in Congress recommend that the use of illegal software (bots) should be cracked down upon, and that “industry players must increase transparency regarding ticket allocations and limits.” NATB ticket brokers support these goals.

Though NATB denounces their use, bots are not the only force at play making it harder for fans to get tickets at a fair price however. Increasingly, tickets come with “strings attached” and fans are being restricted in what they can do with their tickets. For example, “platform exclusivity requirements” force consumer to use a single resale ticket platform oftentimes charging more fees even though fees were already paid in the initial purchase. Others require resale of tickets on platforms with mandatory price minimums known as “price flooring.” Non-transferability of tickets through paperless schemes, delayed issuing of tickets, ticket cancellation policies are just a few other examples. The list goes on.

Simply put, market manipulation by ticket issuers and others in the powerful and controlling primary market harms consumers who cannot obtain tickets for true market value.

The legitimate brokers who belong to our association are both buyers and sellers in this market. Many of our members are pioneers who have survived enormous technological change and the simple hard realities of business, including the little-known fact that some 40% of ticket inventory sells below face value or not at all. These entrepreneurs joined together over 20 years ago to form the NATB, establishing our Code of Ethics that ensures vendor integrity and consumer protection, which is why the National Consumers League, Better Business Bureau, various government agencies across America and others recommend that consumers do business with our members only.

The voice of legitimate ticket brokers is easily lost in the loud, well-financed, and self-serving outcry of large, powerful sellers in the primary market. They bombard consumers with the idea that all ticket brokers are “greedy scalpers.” They feed on mistrust and perpetuate misconceptions about who we are and what we do. And, despite our best ongoing efforts to work with them as partners, many persist in seeing us as competitors to be driven out of the market. Should they succeed, it is the consumer who will pay the price.

Gary Adler is executive director and legal counsel for the National Association of Ticket Brokers.