Is reselling tickets more profitable than selling?

by , Conversation Editor Consumer Rights 13 October 2011
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If you’re after tickets for one of the most popular boy bands to come out of the X Factor, there’s only One Direction to go – a pawn broker. Tickets are being sold for as much as £1,000 on reselling websites. Is that right?

One Direction

Official tickets for the band’s 21-date tour reportedly sold out on Ticketmaster after just 10.6 seconds (who was holding the stop watch?).

Fans were outraged, and maybe rightly so, but perhaps that’s just what you get when there’s such big demand?

However, almost immediately after the tickets sold out, they appeared on a number of ticket reselling websites, ranging from £75 to over £1,000.

Get me cheaper tickets

But these tickets weren’t just being sold on eBay, they were also listed on legitimate reselling sites Viagogo and GetMeIn!. The latter’s website description says the following:

‘Like any marketplace, sellers compete with each other, providing the lowest price for consumers.’

In this case it looks like the ticket prices aren’t all that low – in fact, at the time of writing I have found one ticket being sold for over £1,300 on GetMeIn!. Face value tickets were originally priced at £30. Would you be willing to spend 40 times more? Even if my idol David Bowie was to announce one last tour, I wouldn’t spend £1,000 on a ticket.

“Fans” reselling through Ticketmaster

The story doesn’t end there. GetMeIn! is owned by… Ticketmaster. And it’ll make money from every ticket sold on this website. That means it could make more money on GetMeIn! than selling its original face value tickets.

Of course, it’s the sellers who are setting their own prices, not Ticketmaster. But although it’s not Ticketmaster’s fault prices are so high, it doesn’t feel right that face value tickets disappear in seconds, just to materialise on another Ticketmaster site at considerably higher prices.

Moreover, when Ticketmaster’s website tells you that face value tickets are sold out, One Direction fans are faced with an advertisement for these excessively priced GetMeIn! seats. That’s got to hurt.

Where do we go from here?

There’s no evidence that Ticketmaster is moving tickets from one site to another, so it’s almost certainly touts trying to make a quick buck. But I’d certainly be enraged, especially if I was the least bit concerned about the exploits of the bright-eyed and bushy-tailed Harry Styles, Zayn Malik, Liam Payne, Niall Horan and Louis Tomlinson.

Then again, since their boyish looks and barely-broken voices have wooed thousands of fans, I’m starting to get enraged when touts appear to be rampantly exploiting them online.

Sure, it’s great that the tickets actually exist, compared to the eBay touts promising tickets that never materialise, but that’s still no compromise. One Direction are rumoured to be adding a couple more dates to their tour – is that good enough? BBC Watchdog will be interviewing Viagogo about this tonight, so we’ll update you when its statement comes in.

How much would you spend to see your favourite music artist or band? And what do you think can be done about extortionate prices on reselling websites?

19 comments

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Dean

To me this is a scam, plan and simple.

The bands I like never have this problem, it only seems to be affecting throw-away pop rubbish, which is actually fine by me. Society is ripping you off for liking bad music :-)

On Watchdog, Viagogo explained that they made a 25% cut from every ticket sold, meaning they’d make more money the higher the seller’s ticket price. However, they argued that the market would right itself, as these expensive tickets wouldn’t have a chance of selling. Still, you can’t help but feel sorry for actual fans, rather than the people trying to make a quick buck.

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Gareth

This is unfortunately something that is all too common in this day and age. Ok here’s how it is from someone who works in this industry, day in, day out and is meant as insight, not a rant.

The selling of tickets, via websites such as ViaGoGo or GetMeIn is not related to, or how, Ticketmaster sell for events (I will explain later regarding getmein/Ticketmaster affiliation). Events get “sold out” for various reasons including event pre-sales via the promoter/venue’s sponsored clubs and sites. When an event goes on general sale after such pre-sales there is not always high inventory available. The promoters/venues are in complete ownership of all ticket sales and allocations. Primary ticket agencies such as Ticketmaster, SEE tickets etc. will sell as directed.

A huge misconception of the general public is that all tickets for sale are on sale via a central hub that all primary ticket agencies can “lucky dip” out of or that “evil Ticketmaster” owns all the tickets and is pawing all the money. This is most certainly not the case.

A ticket agency is purely an outlet for a “product” to be sold to the general public. The “product” (in this case One Direction tickets) is owned by the producer/promoter/Venue who will, in turn, pay the ticket agents a minor fee (or service fees are added on top of ticket price by the agency where full or majority ticket face value will go directly to the promoter).

These service fees will pay for event creation on the agency selling systems(which is more than just pushing a button), online presence, advertising and marketing, dedicated admin and management support of the event, ticket stock control, printing on said stock, ticket dispatch team, fraud prevention, call centre support, customer services support among many other functions of the agency.

When an event is created for sale the promoter/venue will decide on allocations for each agency to sell. This will mean(purely for example) on a 1000 seated event perhaps 40% of the tickets will go on sale via Ticketmaster,40% via SEE tickets, 10% via Stargreen and 10% via venue(this is an example and not actually the % etc as that will vary on contractual agreements etc).

If there is a presale on this event (let’s say via SEE tickets) then they may sell out there allocation quickly, at which point the promoter may shuffle the allocations remaining across the board so on the on sale morning SEE may have sold 40% and now have 20% to sell, Ticketmaster with 20%, star with 10% and venue with 10%.

On high demand events general on sales there can be up to 20,000 people queuing online to purchase which means they can sell out almost immediately. Once it does via any agency they will in turn request the promoter for any remaining allocation to release on sale so allocations will be shuffled again, taking from agents not selling as quickly and added to those who are near to (or are) sold out. (Kinda like a stock exchange).

On some occasions the venue/promoter may have held off addition “roll” dates for the event so once they think demand has surpassed availability they may give the agents the go ahead to release these dates.(The reason they are not released initially is usually to ensure the artist/production isn’t selling to empty houses and to give customers who failed to get tickets on the first event a second or third attempt.)

They may also decide to increase the capacity of the event. Perhaps the upper levels were not initially released due to expected low demand or certain areas were held off for reasons such as possible camera/lighting rigs that have since been moved. In such a situation these allocations will be released via the agents or venue by the promoter/venue request. This will explain one reason why some sold out events will have allocation at a later date. Ticketmaster (and other primary ticket agents) will always advise customers to “return and check back at a later date” for this reason.

Another service agencies do to reduce “scalpers” (who we hate as much as the public. They make our jobs harder and are partially the reason ticket prices go up) is we tend to have set ticket limits on each card purchase. This is to give everyone a better chance, you may be told 4-10 ticket may be purchased maximum per cardholder. Once a high demand event is sold out programmes are run manually by event management teams in the primary agency (and venues) through all bookings to locate cards that have breached maximum ticket limits (folk who have bought more tickets than allowed) and all excess tickets will be cancelled and card refunded of the difference. These tickets are now unsold will then be re released for sale through Primary channels.

Should tickets go on sale via legitimate secondary sites such as ViaGoGo, lastminute.com and getmein (eBay is not a legitimate secondary site and has no “safety net” terms and conditions for customers against fraud) these tickets are done so via customers reselling for the most part.

Customers can post whatever value they deem acceptable for the tickets (it is only illegal to resell football and Olympic tickets). They may not even have tickets yet physically to sell but with getmein’s terms and conditions should a seller fail to delivery on the tickets sold, the buyer is covered and will receive 150% (of the price they paid) by the seller who will be charged for this (which should act as a deterrent).

If ever inventory is released via a legitimate secondary site(regardless of company affiliation), this will be via the promoters/venue/producer’s direct request. This could be for many reasons (such as special event packages(VIP experiences, meet and greet etc.) Ticketmaster is affiliated with getmein but does not work on same systems (or have access to each other’s customer information etc.). Both companies, though both situated in the same business umbrella, work completely independently of each other.

Ticketmaster decided to take on getmein as a result of the increase of unofficial or supported secondary sites that have over the years sprung up and fraudulently scammed unsuspecting customers, leaving them with heavy bills and no tickets. Customers often don’t even realise that sites they have purchased through may be completely bogus or have not customer support policy.

By affiliating with Ticketmaster, Getmein has been able to reassure customers that they have a trustworthy secondary sales point, should all go wrong and they fail to receive purchased tickets, they will be covered by a legitimate terms and conditions policy. It may not be the only (or savoury) option for the customer but at least the customer can be assured that all bases are safely covered. Furthermore, staff of primary ticket agencies often have in their employment contracts agreements that should they be found reselling personal tickets at inflated prices on secondary sites they can be reprimanded or even dismissed. This is how severely most agencies attempt to regulate the secondary market to try keep ticket prices down.

This is by far a simplified description of the ticketing industry, primary and secondary ticket agencies and fraud prevention terms and conditions. Of course there are other major factors contributing to selling an event. I don’t profess to know all aspects of the ticketing market nor do I speak of any company directly so some of the above may vary slightly depending on the companies mentioned of course.

What is central to every official primary ticket agency is selling tickets to the events to the best possible standard and to try ensure their customers receive the best possible tickets to the events from allocations available to them.

What is central to all “scalpers”(who also often sell fake tickets on eBay) and customers reselling at hugely inflated prices is personal profit, no more. Unfortunately laws do not cover the price of a ticket any more than the price of a family heirloom at auction, it is a side effect of the current market place, which is open to everyone.

A really great and well thought out comment Gareth, if not a bit long!

I don’t think anyone else thinks this is anything other than just touts/scalpers/individuals trying their luck. But it doesn’t feel like primary and secondary ticket websites are doing enough to stop it. Although you mention some ways, I don’t think punishing company employees is going to work.

The question is – is there more that can be done? Should the ticket limit for high-demand shows be set lower – say two per person? Should there be a limit on the cost a secondary seller can sell a ticket for? Should more be done to check that people actually legitimately need to resell their tickets – ie. should secondary websites vet our constant resellers?

The second question is – is the incentive to stop this type of selling big enough? If a company like Viagogo gets a bigger cut the higher the reseller’s ticket price, what incentive do they to stop them from doing this? Perhaps this is evidence that there needs to be outside pressure, rather than what looks like self-regulation.

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Gareth

Thanks, ha sorry it is quite long but I think simplifying what we do leaves us way to open to misunderstanding and incorrect judgements being passed on the industry.

Ticket limits are decided by the promoter. Some high demand events are set to 2 per person but then on events, like One direction, where the average age of the customer may be 16 or under it would be necessary to have an adult present so then you would have parents complaining that they had a “Sophie’s choice” over which child to bring and as such limits are raised (ticket limit was 4 per person/card on this tour). Where limits are breached we often cancel the surplus as they are in breach of our terms and conditions.

Secondary websites do vet regular sellers, but only to ensure that they follow through with the items they are selling is matching what was offered. It is not required of the secondary websites to query requested values. If so then sites such as eBay would go bust overnight. If you tried to sell a vintage baseball card that you picked up for 20p in the 80’s but is now deemed a collector’s item and worth £1000’s would you try sell it through a website that only allowed face value or a certain upper level %? Absolutely not. Tickets are no different, they are a commodity that sometimes exceeds face value in the secondary market. If you cap, or remove, official secondary websites, unofficial websites will spring up and if they don’t you will see more people trying their luck at events with scalpers.

The secondary market it based on the commission on reselling of tickets, regardless of the event so no, there is no incentive for them to stop. The incentive for the official reselling platforms is it gives the customer a safer option than risking it with the scalpers engulfing events. It also give people a quick and easy option to resell on events they are unable to now attend where terms and conditions do not allow refund or exchange(these terms are of course usually flexible in extreme circumstances and within 24hours of purchase. The issue is blaming the secondary and primary agents for doing their exact function. Ticketmaster and other primary agencies are constantly looking at ways to ensure those who purchase tickets are those who attend. Products and event access systems are being developed as we speak to try ensure this. Also as you stated in the article most overly inflated items will not sell/ or will take much longer to sell as customers will not spend that. Only the primary industry is regulated(by the promoters and venues). The outside pressure that will make this change is if the general public refuse to pay these high prices on the secondary market. It will reduce the sellers value and regulate the market.

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Neil

I also work in the ticketing industry, and it’s interesting to read this. It’s been a hot topic recently, and it’s hard to see why when concert tickets are essentially a luxury item rather than an essential.

Fans who miss out on tickets are understandably frustrated when the only option is buying from a secondary seller at high prices, but if a hundred thousand people want to see a band, and that band decides to only play 2 nights at Hammersmith Apollo, then most fans will end up disappointed. The fact that 100 tickets ended up being bought by people who are trying to re-sell them at a profit makes little difference.

In fact, I’d argue that with Viagogo and GetMeIn, you can at least guarantee a ticket if you’re willing to spend a little more. Perhaps it’s your partner’s birthday and you want to get them a ‘sold out’ ticket for their favourite band?

I’m personally a huge fan of live music, and would prefer not to pay above face value for my tickets, but I can’t see the point of trying to outlaw re-selling. Why are tickets different to anything else that’s in short supply? If we were going to regulate prices to ensure that people can afford things (which is what people are saying when they suggest banning the re-sale of tickets for profit) then I’d probably prefer the government to start looking at petrol or houses instead!

Interesting Channel 4 Dispatches special about this: http://www.channel4.com/programmes/dispatches/4od#3290181 It talks all about reselling and some shady ticket seller practices… as described by BitterWallet: http://www.bitterwallet.com/channel-4s-ticket-reselling-investigation-nails-viagogo/54160

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Wayne

I think that when a ticket is bought your name is printed on it and you carry proof of who you are to use the ticket at the event to stop all this scam/tout….

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dave

so what happens when a parent buys the tickets for their kids .

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Concerned Parent

This is extortion. Someone has to look into the resellers like vivid seats.com, stub hub.com, killer seats, ticketliquidator, They are selling tickets for more than 1000%. There should be a cap for resellers. This is unethical especially for teenagers to have to pay so much for 49.00 tickets. The band (ONE DIRECTION) should have a stand on this.

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Christine Cushing

I think that it is horrible and I am to the point of wondering why ticketmaster even exists. I tried to get the tickets with the pre sale code for my daughters. I called and spoke to ticketmaster reps 3 times the day before, and 3 different reps told me that the presale was internet only and that it did not start until 12pm Eastern time. When we logged on at 11:50, surprisingly, tickets were not only already being sold, but everything was almost sold out….before the time that we were assured that they would go on sale! Surprise… all of the secondary sellers somehow managed to have purchased thousands of tickets and plenty of meet and greet and VIP packages…which they split up somehow and sell the meet and greets for like 3,000plus and that does not even include a ticket. They then get another 1000.00 for the ticket! It is crazy that anyone would pay this but when it comes to children, sometimes people who can afford it, will. This is horrible and the promoter/artists should stand up for their fans and stop this.

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Jasman

What the hell? I am in love with these boys but i would NEVER pay a grand to see them unless they were front row and meet an greet! What a scam! :)

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alicia

mannn are there more v.i.p tickets that is less than five hundread dollars?

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Joe

Can anyone confirm if any ticket agency sold Meet and Greet tickets for One Direction at the O2 arena in April 2013?

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megan

trigogo are going to rip you off and anyone know wair do you get tickets from i am dyeing

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MsSupertech

StubHub has become a massive rip-off via e-bay. It seems to be prepared to sell ticket for MORE than face value… I thought this sort of touting is illegal?
Obviously when I was able to bid in a normal e-bay auction it’s up to me if I’m prepared to pay a premium for my tickets. But an asking price well above face value is quite a different matter…
For example, tickets for ‘Strictly Come Dancing’ live shows are face value £65 but StubHub is offering these ticketa at £201.76 each. This is more than THREE times the face value. No amount of ‘reassurance’ about the security of the purchase justifies this. I’ve seen a similar mark-up on tickets for international cricket games in England last summer – despite a specific ECB ban on ticket resale above face value. It’s time Which? took a close look at StubHub.

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Neil

It’s not illegal to sell tickets at any price you choose. They’re no different to anything else in that respect – bread, milk cars, houses, video games….

Perhaps you’re confusing the law about selling football tickets without the club’s permission (at any price) which was intended to prevent hooliganism.

I can’t really see the difference between someone putting tickets on Ebay or advertising them at a high price on StubHub. Either way, it’s up to the customers how much we are prepared to pay.

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Andy Haldane

I recently bought tickets for Killers concert for my niece. This had to be via a resale site as original tickets were all sold out.

This raised a few issues and how much scope there is for these companies to make profit.
1) Original ticket face value 49.50 pounds (Ticketmaster profit included)
2) Service charge 5.50 pounds.
3) Ticket being sold on Getmein for 78.50 pounds (Getmein is a Ticketmaster company). No doubt seller has to pay Getmein for this service.
4) Getmein add their own 20 pounds service charge per ticket.
5) Final Total cost 108.1 pounds to buy and only arrived 2 days before concert.

Getmein also have the cheek in their T&C to advise that original tickets can be placed directly on Getmein to help keep costs down! I may be naive but believe they can make more money by resale rather than original purchase therefore have no interest in keeping costs down.
They also recommend resale prices to sellers so no doubt take the opportunity to position the price accordingly.

Is it note time these practices were shown to be what they are Offical Ticket Touting which would be illegal if conducted on the street.

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Neil

Reasonable points, except that ticket touting isn’t illegal, whether it’s conducted online or on the street.

(It might be illegal to sell *anything* on the street without a permit in some places, but that’s nothing to do with touting).

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