How to change the secondary ticketing market: Part 4 — Transparency
This is the fourth piece discussing the issue of touting and TicketSwap’s unique approach to making the secondary ticketing market better for fans. Written by TicketSwap UK Market Developer, Daniyal Ahmad.
An oft-used excuse put forward in defence of the practice of touting is that ever since there was ticketing for events, there has been touting to supply tickets at high premium to desperate customers. This evokes an amusing image of toga-clad touts offering tickets to the masses around a Greek amphitheatre. From these ‘humble beginnings’, the everyday tout has certainly come a long way, with pesky in-person ticket flogging replaced in favour of massive online touting operations. In this supposedly long history as an economic activity, touting has not actually become any more transparent or customer-friendly. The essence of touting is often said to be ‘supply and demand’ but truthfully it’s main tenet is deception.
At the very heart of the practice is keeping the customer in the dark about the price, the type of ticket, the identity of the seller, the validity of the tickets and, most importantly, the source of the tickets. For this reason, calls to treat touting like an legitimate economic activity are more than a little rich. In order to be a legitimate economic activity, its participants (touts) and enablers (touting marketplaces such as Viagogo, Stubhub, Seatwave and GetMeIn) must be bound by the same standards of consumer protection, and public scrutiny as any other industry in e-commerce.
At the behest of artists, event organisers and fans, governments around the world are slowly beginning to do just that, intervening in what has been, for over a decade, a ‘self-regulated’ industry. As we discussed in previous posts, there are a number of existing, recently passed or pending regulations that showcase lawmakers’ various approaches to the problem such as Belgium’s blanket ban on all resale above face value, America’s ban on bots used to harvest primary sale tickets en masse or the UK’s existing consumer protection regulations that require secondary marketplaces to provide information on sellers and the tickets that they list. Depending who you ask, these laws are either having a very slight impact on improving the consumer experience when it comes to secondary ticketing or no impact whatsoever. Nonetheless, the recent willingness of governments to get involved is promising, albeit, without any clear successes in stamping out large-scale touting so far. For example, the UK recently passed improved legislation regulating touting marketplaces that could form the basis of increased government enforcement on the issue.
A crucial missing piece in most regulatory approaches to tackling touting is a viable model of how secondary ticketing can be fair and safe without curbing the flexibility of consumers to buy or sell spare tickets they can no longer use. Current examples of ‘effective’ techniques for beating touting such as paperless ticketing or strict ID checks are, at best, deterrents for touts and, at worst, place an unfair burden on normal fans. Organisers and performers who adopt such ticket restrictions must carefully weigh the benefits of discouraging touting with the negative impact on normal fans in terms inflexibility — leaving them with tickets that they cannot refund, transfer, gift or sell at an honest price. In truth, A sustainable solution for fighting touting can only begin with large-scale change in the way that consumers interact with and are informed by ticketing companies — both primary and secondary. In short, this begins with injecting transparency into an industry that has been anything but transparent.
As we discussed in Part 3, capping prices at 20% above face value is a cornerstone of TicketSwap’s marketplace, but our transparency is perhaps our most important value. Sellers must use their Facebook account to log on and sell their tickets so that buyers can be sure that they are buying from a fellow fan, not a tout. Prices are clearly displayed — with the original price and the selling price visible so that users can easily see the pricing differential. Moreover, there are no hidden fees — TicketSwap service fee is simply 10% of the transaction — 5% from the seller and 5% from the buyer. Seated and section-based tickets are clearly displayed and categorised, which prevents sellers from blindsiding buyers with vague or incorrect information. Lastly, users can see the prices that other buyers have paid before making a purchase so that they can always be sure they are getting a good deal. We’ve constructed our platform this way because we genuinely believe that buying and selling tickets should be this simple and transparent. When buying a secondhand ticket, fans should have all the information at their fingertips from the source of the tickets to the original price to the seat number. By giving fans an opportunity to buy and sell tickets fairly, safely and transparently, we are giving fans control of the secondary market.
Our approach of transparency-first secondary ticketing strives to change the behavior of fans and, in turn, the behavior of many organisers, venues and primary ticket companies. The recent press about backroom deals between industry actors and touts or touting marketplaces (Organiser: Scotland rugby, Venue: SSE Hydro, ticket company: Ticketmaster) illustrates that identifying the source of tickets that eventually appear on secondary marketplaces is just as important as controlling the price. In these cases, the consumer is offered a ‘secondhand ticket’ that never was placed on general primary sale, generating huge revenues for tout, touting marketplace and the industry actor involved. While lawmakers have been active on banning the use of bots to harvest tickets, these deals between touts and industry actors arguably are more successful in distorting the secondary market. The need for transparency in the ticket industry has never been higher; the TicketSwap model of transparent resale shows that there is a viable alternative to a secondary market controlled by touts or driven underground by government regulation. From Justin Bieber tickets to Sziget Festival passes to tickets to football matches, each new TicketSwap buyer is getting exposed to a new way of doing business in the secondary market. With 1,300,000 users from over 20 countries, TicketSwap fans are finally getting a leg up on touts.
