Paperless tickets: Is Ticketmaster hurting consumers?

March 29, 2011

A man holds a pair of tickets for the 'Live 8' Hyde Park concert, in central London, July 1, 2005.  	 REUTERS/Toby MelvilleIf you buy tickets to events, there’s an awfully good chance you get them from Live Nation’s Ticketmaster, the dominant player in the industry. And if you get paperless tickets, you had better read the fine print before you buy them or you could be in for a shock.

Ticketmaster, some artists and venues are changing the terms of tickets — moving to a paperless ticket (known to some as a restricted ticket). The restriction on these tickets is that they are linked to the buyer, who must show the credit card used to purchase them and possibly some other identification in order to gain entry to a venue.

Ticketmaster says the restrictions prevent scalping. But a new group formed to fight this tactic says the practice is aimed at the company gaining greater control of the secondary ticket market (they would be the conduit for resales or transfers) and would badly hurt consumers by taking away the actual ownership of the seats for a given event.

Brad O’Keefe, a banker in Minnesota who owns season tickets for several teams, is livid about the notion that he may no longer be able to easily give his seats to customers, friends or family. And, he said, even donating seats to be auctioned for a charity would become too cumbersome to even bother.

“With that restrictive ticket that I have no control of the ticket,” O’Keefe said. “That’s where I have a problem as a fan and as a ticket holder.”

Jon Potter, the former head of the Digital Media Association who runs the fledgling Fan Freedom Project, said too much is being taken away from consumers in this new maneuver by those who control the tickets.

If you’re not named as an attending person at the time the tickets are purchased you’re not getting in.

“Consumers should recognize that they’re being sold a ticket that has puppet strings on it,” he said. “Essentially, they’re being played like a puppet by Ticketmaster and event producers.”

If you buy tickets to an event then you ought to be able to do what you want with them, whether it’s sell them, give them to a friend or donate them to charity, Potter said.

What should happen, he said is simple: “The consumer buys the ticket; the consumer owns the ticket.”

The Fan Freedom Project is backed by the National Consumers League, eBay and secondary ticket seller StubHub.

Paperless tickets have been introduced in scattered markets and have been seen on a more widespread basis through tours of certain performers over the past year and a half. In November, hundreds of people attending a Justin Bieber concert in Louisville were forced to wait for hours after the system set up to verify attendees failed.

Another criticism of the system is that the person whose credit card purchased the tickets is required to be there along with all of the attendees whose tickets were purchased with that card. Among those inconvenienced are parents who bought tickets for teens and now must wait with them in line so they can gain entry.

Live Nation spokeswoman Linda Bandov responded with the following statement:

“At Live Nation Entertainment we manage over 300 of the greatest artists in the world, and we promote thousands of artists a year. We can only succeed when fans are happy, and that’s why we support Fan Protected Paperless Ticketing. The facts are that fans, artists, teams, venues and promoters love Fan Protected Paperless Ticketing. Satisfaction is off the charts, and almost every fan says they would rather have access to a good ticket if it means giving up the right to scalp or transfer the ticket.

“We’re extremely disappointed that StubHub has strayed to side with scalpers to exploit the common fan.  Scalpers have never been on the side of consumers and there has not been a single artist that has come out in support of this hoax. StubHub and scalpers are misleading fans because they can’t make as much money if tickets are reasonably priced using Fan Protected Paperless Ticketing. So they are desperately lobbying to take tickets out of the hands of kids and soccer Moms and sell them back to them at multiple times face value — because that’s how StubHub and scalpers make money. Fan Protected Paperless Ticketing isn’t right for all events or all tickets. But it’s the way to get a kid a ticket at a reasonable price without a scalper snatching it away from him. We need life long fans. And today the ONLY way to ensure that some fans can get into a popular show at a reasonable price is through Fan Protected Paperless Ticketing.”

New York passed a law last year that requires consumers to get the choice of whether they want paperless tickets or traditional tickets. Subsequent attempts elsewhere to restrict the practice have at least gained a toehold, with legislators in Connecticut, Minnesota and North Carolina taking up the issue and a bill introduced in Congress earlier this month.

“The future may be paperless ticket,” said Potter of the Fan Freedom Project, “[but] that doesn’t mean they have to be restricted tickets.”

12 comments

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Ticketmaster has cornered the market and is now a monopoly for all practical purposes.

Many events only sell tickets through Ticketmaster and not through local box offices.

Now that they are firmly entrenched, they will engage in more and more predatory pricing practices.

They have already gone from “per transaction” to “per ticket” pricing, effectively doubling, quadrupling, or more, the money they collect “per transaction.” All with no additional cost to them.

This latest step just helps to “seal the deal” for them. By controlling entrance with your credit card as your gate pass, and Ticketmaster can tell the venues “You can get rid of all your ticket takers with us.”

Expect to see their “fees” rise considerably over the next few years to as much as 50% or more of the event price.

When your the only game in town, you do that sort of thing.

Posted by bobw111 | Report as abusive

Just victims of the in-house drive-by,
They say “jump” you say “how high?”
-RATM, Bullet in the Head

Posted by bobSmith | Report as abusive

Fan point of few 2 examples – Charlie Sheen went on sale in Detroit, 19 min sold out 2200 tickets, 1400 listed on stub hub for double the price. A week later, Jimmy Buffet goes on sale, 2 minutes after they go on sale all lawn tickets sold out, but 1200 are for sale at double on stub hub. That is not a fan favored strategy. That is people with very fast, automatic computers taking advantage of the system. Until that practice is stop, tickemaster and artists must take steps to protect the normal fans from predators or people will loose faith, just as they have with all the high speed trading on wall street.

Posted by wilson7 | Report as abusive

I cannot believe Ticketmaster is still in business. You would think that venues (at least the ones not owned by Live Nation) would have realized by now that their insane fees and practices are costing them sales. Even with the kickbacks Ticketmaster gives the venues they still must be loosing money on the deal.

I understood the role of Ticketmaster in the pre-internet age. They would have a kiosk in the local record store and it would save you the time to go all the way to the venue. That was worth a convienence fee. There was someone physically there who they had to pay. But in today’s world where you can order and print your own ticket without actually interacting with an agent why do I need to pay you $10 for that? If anything it should be discounted because I’m not going to a ticket window at the venue so you might have less payroll. I find it insane that venues do not sell directly from their own site to keep all the ticket profits for themselves. What use do the Yankees have for Ticketmaster? If you can find the TM website then why can’t you find the NYY one?

Customers have many entertainment choices. More and more people will avoid events because of TM (I’ve cancelled potential orders after seeing the fees); the smart venues will dump them the dumb ones will loose their business.

Posted by anarcurt | Report as abusive

[…] has a new name for its restricted tickets: “Fan Protected Paperless Ticketing.” But who exactly are they protecting, and […]

Posted by What Are Fan Protected Paperless Tickets? | Fan Freedom Project | Report as abusive

I love it 😉
Capitalism at its best
They should consult with GE’s tax advisers to make sure they dont have to pay any income tax on their earnings

Posted by winkman | Report as abusive

What Ticketmaster does is scalping. They buy tickets from the venue then resell them to people at a higher price.

What a joke.

Posted by awquity | Report as abusive

If TM doesn’t figure out a way to let season holders and box owners give/sell their tickets – TM/venues/teams/acts are doomed. They will figure it out.

Posted by gordo365 | Report as abusive

Maybe if the artists knew how people felt, they might change their usage of TM or specific venues, but you have to have the numbers to make yourself heard and use the social networks to your benefit.

Posted by RayGPowell | Report as abusive

I recently bought tickets to three events; Robert Plant, Crosby Nash, and Neil Young. I receive notices from Live Nation a couple of days before the tickets go on sale indicating the exact time the tickets can be purchased. Each time I try to buy the best available seats which turn out to be row X at best. How can that be? In less then 2 minutes all those other seats are sold. BS! It a racket. I would like to see the major artists refuse to perform in any venue that does not sell tickets fairly.

Posted by ds76 | Report as abusive

One step closer to a paperless, cashless, fully electronic financial system brought to you by the NWO. Smile, it’s what all of you voted for.

Posted by gruven137 | Report as abusive

[…] debuted on a personal fiancé blog belonging to Reuters’ Web site. The entry was entitled “Paperless Tickets: Is Ticketmaster Hurting Consumers” and it was posted on March 29, 2011. The phrase was included in a response issued by Live Nation […]

Posted by Ticketmaster Rolls Out New Phrase, ‘Fan Protected Paperless Ticketing,’ Calls It A Day | Authority Tickets | Report as abusive

“StubHub and scalpers are misleading fans because they can’t make as much money…”

Negative. They are upset because this system would prevent them from making ANY money which is anti-capitalistic.

Basic principles of property law would indicate that if you purchase the rights to use something, you can do with the obtained property as you please as long as it’s within the confines of the law. Ergo, you purchase a ticket, you should be able to do as you please with it: use it, sell it, give it away, etc.

Posted by Shwax | Report as abusive

[…] on a personal fiancé blog belonging to Reuters’ Web site. The entry was entitled “Paperless Tickets: Is Ticketmaster Hurting Consumers” and it was posted on March 29, 2011. The phrase was included in a response issued by Live […]

Posted by Ticketmaster Rolls Out New Phrase: ‘Fan Protected Paperless Ticketing’ | Authority Tickets | Report as abusive

[…] including the right to give away or sell your tickets online and on your own terms.  Check out some press on the issue and read eBay/StubHub’s position o // Share and […]

Posted by “Fan Protected Paperless Ticketing”…Who’s it Really Protecting? | Report as abusive

The problem with applying property law directly is that you aren’t really buying any property. The ticket is probably better viewed as a rental agreement for the seat which comes with restrictions even in it’s current form. I think it makes sense to consider it more like an apartment rental… you aren’t always allowed to do as you please with it.. (remodel, sublet, pets, etc..)

I absolutely hate TicketMaster/LiveNation/Stubhub, etc… and would love more competition and a better way to get tickets to the actual fans at face value. I like the idea of paperless tickets, but it certainly has flaws that need to be worked out first. Unfortunately I don’t trust that anyone in the ticket business or government will find a way that is fair and isn’t influenced by greed.

Posted by cec772 | Report as abusive