VIP-News Premium - Vol. 145 March 2012

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MARCH 2012

McGowan’s

Musings

It’s getting busy again – in fact I’m so busy

Music Week in Toronto next week – March

Of course we all know that the gathering­

I haven’t mentioned seagulls for ages – has

21, then Tallinn Music Week at the end of

together­of people to enjoy live music­, as

anybody noticed? Hands up – oh, a few of

the month, it’s a wonder that the News

evidenced­by events like Live Aid, can produce­

you then…and just as I mention this, Shitty­,

gets done at all! But what would you all do

remarkably beneficial social effects­. But it only

the most cross eyed seagull in Brighton

without­it? – Don’t answer that!

really struck me last week whilst attending­a

landed­on the flat roof and toppled sideways

Green Events and Innovations­Conference

trying to hold one wing straight up – insolent

This year’s 24th edition of the International­

which involved Greener Festivals­and the

bird! Anyway, now that’s out of my system

Live Music Conference (ILMC) sold out in

AIF event at London’­s Royal­Festival­Hall last

– busy! – yes, what with a very full on ILMC

advance­again with a thousand live music­ week, - and I suppose­I should have realised

last weekend, and preparations for Canadian

industry

COLOPHON > VIP-News is published by: VIP-Booking 145-157 St John Street London Ec1V 4PW Managing Director: Ronni Didriksen rd@vip-booking.com

delegates

from

61

this before - that so much can be learned from the efficient­and environmentally­

to put the business to rights and to enjoy

effective­people and resources­management­

themselves. Some, especially those that took

of large scale festival­events which can then

part in the football, at Wembley Stadium no

be applied to the better­handling of large

less (!), returned home a little bruised and

gatherings of displaced­people following

battered; the image of our very own Peter

natural disasters and the effects of war and

Briggs, hopping around painfully on one leg,

political unrest. One speaker from the floor

whilst declaring that playing on the hallowed

in panel called, ‘Water – The Stuff of Life,

turf was the best thing he’d ever done, will

mentioned­working­in camps set up for

stick in my mind for some time! What was

‘displaced­people’ in Haiti really brought it

that? Oh, he tore his calf muscle – thanks for

home to me.

asking, he’ll be all right in a couple of weeks.

Another aspect which became clear in that My experience, and this same view was

session was I hadn’t really considered, and

confirmed­by others, was that this year’s

which highlights climate change, was that

ILMC (see report in this issue) had even more

we are now, this early in the year, officially

General Manager: Peter Briggs pb@vip-booking.com

of an international feel to it, with a wider

affected by drought in SE England, usually

range of people involved in the meetings­ ,

apart from the watering of lawns, this is not

Writer and editorial: Allan McGowan am@vip-booking.com

and a lot of newer delegates standing up to

usually a pressing problem, but it certainly

speak their piece – a very good thing! Both

is another weather problem which festival

the Emerging­Markets session and a Market­

organisers­will have to take into account.

Writer: Manfred Tari mt@vip-booking.com For advertising enquiries please contact: Peter Briggs pb@vip-booking.com +44 870 755 0092

Focus on China­highlighted how things have progressed in many of the international­ So – I’m off to find thermal underwear as markets­ , and even how live music has

I’m told that it can drop to minus twenty

been and is still applied to the process of

in Toronto during Canadian Music Week, in

advocating­peaceful communication in areas

the meantime – Ladies and Gentlemen – the

recovering from and in some cases currently

News…

beset by political and social unrest.

2

countries

descending­on London’s Royal Garden Hotel­

VIP NEWS >

MARCH 2012

Green Events & Innovations Conference Allan McGowan am@vip-booking.com In the last couple of years attendance at the

project on the fortunes of the live industry in

International Live Music Conference (ILMC

the coming months. The session is modelled

24) has risen dramatically and according

on the famous UK TV humorous quiz show

to the organisers this year’s edition, again

“Have I Got News For You”.

held at London’s Royal Garden Hotel, looks

This year’s agenda will feature a look at

set to follow that trend which will mean

the Chinese Market, and the The Emerging

capping­the numbers at a thousand plus and

Markets­’ Place will compare the development

disappointing­some would be delegates. This

of the Eastern European Market with other

major live music industry event will take place

territories around the world. Also following­

on 9th – 11th March.

the major problems caused at various outdoo­r events around the world last year two regular­

For the second time the ILMC will commence

ILMC sessions The Booking Ring and The

with “The Open Forum” with Greg Parmley

Festival Forum will merge, to discuss the

welcoming guests, Emma Banks (CAA), John

production and promoter reactions to these

Reid (Live Nation), Wayne Forte (Entourage

catastrophes.

Talent, US) and Scott Rodger, manager of Arcade Fire, to review the past year and to 1

the development of the live industry, VIP News will attend and report back.

The ILMC is well known for breaking news and revealing opinions that directly influence

Anzeige_VIPMag_ProSky_X4.pdf

Ben Challis

09.12.10

More Details: www.ilmc.com

10:43

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VIP NEWS >

MARCH 2012

ILMC 24 Allan McGowan am@vip-booking.com

The 24th edition of the ILMC again sold

ILMC was also important as a place to make

out in advance, attracting more than 1000

and renew friendships, and how much it has

people and reaffirming the first word of the

even become a part of some people’s lives. It

event’s official title, International Live Music

certainly gave me personally a much-needed

Conference with attendance from no less

shot in the arm to keep going with what I’ve

than 61 countries gathering to discuss all

begun to call my ‘bastard child’, and plans

aspects­of the current state of the world’s live

for our big 25th anniversary edition are al-

music industry in the conference rooms, bars

ready well under way...”

and corridors of the Royal Garden Hotel in London.

Alongside the serious consideration of matters­ranging from secondary ticketing

This year’s winners

ILMC Founder, Martin Hopewell gave VIP

– a burning­topic rekindled by a recent UK

News his view of this year’s edition:

Channel­4 documentary (see report in this

First Venue to Come into Your Head

issue), to new technologies, emerged and

02 London, UK

“Although it’s probably true that I probably

emerging markets, event safety, venues,

only ever get to hear the positive feedback,

contracts etc, etc, ILMC, notwithstanding its

the general feeling I picked up was that ILMC

post-apocalyptic theme, always has it’s lighter

24 was one of the best meetings - if not the

moments and a full social agenda, including­

best - that we’ve had so far. Certainly I was

football at Wembley Stadium. Certain ILMC

Most Professional Professional

struck by the energy this year - from the rapid

delegates have played on this hallowed

Martin Goebbels

pace of the registrations to the speed with

turf more often­than most professional­and

which the session rooms filled up. Everyone

international­ players!

seemed to be up for it. And there was a real

Services Above and Beyond Eat To The Beat

Liggers Favourite Festival Glastonbury

‘family’ feeling too - something of a return to

One event which started off as a light

Plumber of the Year

the meetings of the earliest years. Its always­

hearted­dig at the presentation of Awards –

Andy Franks

been true that the discussion topics are at

The Arthurs, has found itself being taken very

the heart of the ILMC, and this year was no

seriously by both the winners and music and

different­with high levels of participation and

in many cases daily international press. This

information and an even greater spirit of

year’s winners were as follows:

openness - but this year reminded me that

Best in Show Cirque De Soleil: Alegria Least Painful Tour Roger Waters The People’s Assistant

Martin Hopewell

Sandra McCarthy – Live Nation Second Least Offensive Agent John Giddings The Promoters Promoter Barry Marshall New Boss Martin Nielsen (Live Nation Norway) The Bottle Award Willie Robertson

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VIP NEWS >

MARCH 2012

ILMC 24 – The Conversion Proceeds Manfred Tari mt@vip-booking.com

Over the past three years or so the visitor­ profile­of the annual live music business gathering­at the Royal Garden Hotel in London­

Delegates at ILMC played football at Wembley, two of the players were Dick Molenaar and Claudio Trotta

seems to be gradually changing. The ILMC is getting younger while getting older. The rising­ number of new delegates, from different­ territories­and new concert companies­is naturally stimulating­the rejuvenation of this industry event.

The ILMC 24 had its usual classic conference themes which were once again informative.

However, while some conference topics in the past in particular have been controversially or even emotionally discussed, The ILMC 24 showed that some subjects were handled in a more factual manner instead of through

top shots and high potentials, but it is also

is often one of the more active sessions of the

the grand drama discussions that previously

a conference for the establishment of the

weekend, being run in round table fashion

entertained­and impressed delegates as

concert business overseas and the rest of the

and usually involving everyone in the room

industry­heavyweights argued passionately in

world. The ILMC has its own identity with a

in active discussion on topics that are often

order to get their point of views across.

more intimate peer to peer character­than

not chosen until everyone is in the room. The

most other music conferences in Europe­ .

idea is to elaborate on discussions from the

Good examples of these were ‘The Booking­

While this issue is packed with articles

previous­days’ agenda and to pick up on topics­

Ring’ chaired by Marc Lambelet from Black

referring­to the subject of secondary ticketing­,

that may have been overlooked. This year, not

Lamb, and the Tech Panel chaired by Ben

it was almost surprising to see that this topic

surprisingly, considering­the recent impact of

Challis­from Charming Music and Steve

played a less vital role than in previous years

the Channel 4 Dispatches TV documentary on

Machin from Stormcrowd. Many panels

even though The Great Ticket Swindle or

secondary ticketing (see report in this issue)­,

are getting more comprehensive, while still

Secondary­Ticketing was covered to some

kicked off and remained on the subject of

delivering­facts or news that retain The ILMC

degree­in the opening session and popped up

ticketing­. A lively debate followed involving

as what it’s known for, one of the two most

here and there during the conference.

panelists and as ever all in the room. There

important live music conferences in Europe.

was even a positive ongoing outcome of sorts

Yes Eurosonic is the other one and the main

The ILMC 24 had other more relevant

to the dealing with this thorny subject as Steve

difference between The ILMC and Eurosonic

subjects­on its conference agenda as the

Machin of Storm Crowd suggested a possible

Noorderslag is that The ILMC attracts global

topic of secondary­ticketing has already­ security initiative for ticketing, which is being

players from the live music industry’s premier­

been

league, while Eurosonic Noorderslag is a

years. However­ , The Sunday Supplement,

hotspot­for European festivals, agencies and

taking­place on Sunday at 12.30 and a regular­

promoters.

ILMC session­ chaired by Allan Mc-Editor in

With this in mind, VIP-News will deliver in its

Chief-Gowan inevitably got to the subject.

next issue a proper report on The ILMC 24,

Yes, The ILMC also has its own very valuable­

Described as ‘intimate’ and usually attracting

covering more of the panels.

share of upcoming European music industry­

only 25 people or so, The Sunday Supplement

intensively­covered

in

previous

pursued at the moment by Steve and Andy Lenthall of the PSA - watch this space!

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VIP NEWS >

MARCH 2012

Sale of HMV Live /Mama Group Enters Second Stage Allan McGowan am@vip-booking.com

Hammersmith Apollo is up for sale

Following the early March deadline for bids for the live business

by March 2. It is surmised that offers may only be in the region of £64

interests­of HMV, the company is considering offers for its 13 music

million, the sum HMV originally paid for the Mama Group.

venues, including major London music landmarks the Hammersmith Apollo, and the Forum, along with its five festivals, put up for sale in a

Mama’s festivals and artist management businesses and marketing

‘strategic review’ of its live business, which it acquired from the Mama

partnership may not be wanted by AEG or the eventual buyer and it is

Group in 2010.

thought that MAMA co-founder Dean James is leading a consortium to buy those parts of the firm that are not wanted.

According to The Independent music business players and private equity­outfits have expressed interest, and first round bidders were AEG

The Academy Music Group already operates three major music venues­

Live, the Live Nation backed Academy Music Group and equity types

in London along with the operations of its main shareholder Live Nation­,

and Time Out backers Oakley Capital.

so an AGM bid could be subject to competition regulator approval­. This could be a slight case of musical chairs as MAMA acquired the Apollo in

HMV hired advisers at Citi to put the live music sector on sale in order to

the first place when Live Nation was forced to sell to obtain competition

help deal with its up to £180 million debts. First-round bids were made

regulator approval for buy into AMG.

CBGB Festival Planned Allan McGowan am@vip-booking.com Reports indicate that the legendary and now sadly defunct venue CBGB in New York looks set to be reincarnated as a festival planned for 4-8 July in New York. Following the closure in 2006, the CBGB name reappeared­as a short-lived fashion store and an iheartradio channel. It was also the subject of a legal battle amongst members of founder Hilly Kristal’s family for ownership The festival is apparently intended to feature film and conference strands as well as music, although no line-up has been announced.

More information at www.cbgb.com

6

CGBG – New York

VIP NEWS >

MARCH 2012

> INDEPTH STORY > THE GREAT TICKET SWINDLE

INDEPTH This month’s feature deals with the furore resulting from the Channel 4 Dispatches programme­on secondary ticketing aired late last month. Our report presents some different viewpoints on one of the industry’s most emotive topics. It seemed, not very long ago that the practice of secondary­ticketing had passed into acceptance, with associations like the CPA and others­adopting a ‘if you can’t beat them join them’ attitude’. However the programme has had great effect in the UK and elsewhere, and the argument for and against is firmly back on many agendas­!

The Great Ticket Swindle Manfred Tari mt@vip-booking.com

The ‘unfiltered truth’ about “highly, highly immoral” business

governmental institutions rather decided not to interfere or to

methods­­at Viagogo & Co:

regulate­a market that in the past may have be named as the black market.

For instance, in April 2008 the Department for Culture, Sports and Media (DCMS) published a report entitled, ‘Government Response to the Culture, Media and Sport Select Committee Report on Ticket Touting (HC 202 – Second Report of Session 2007-08)’ concluding, alongside other findings that: “The Government does not see a case for any general restriction of ticket resale.”

It was a didactic masterpiece of the very few recent journalistic reports­on questionable business practises in the music industry. On

Thus Governmentally supported, the secondary ticketing market

February 23, the TV Station Channel 4 aired an insider report about

in the meantime experienced a boom. Over the years the more

the business methods of Viagogo and Seatwave in the UK. The report­

concerned­and active opponents of secondary ticketing in the UK

was made for the investigative magazine series Dispatches, and was

live music business­almost give up. Apart from a few exceptional

entitled the ‘Great Ticket Swindle’. The TV-report revealed in an

initiatives such as the Independent Festival Association’s ‘Ticket Trust’

uncompromising­manner, just how these prominent secondary ticket

ticket exchange.

exchanges run their businesses.

Anyhow, the ‘Great Ticket Swindle’ TV-report produced evidence that Over the years secondary ticketing has become a business model

Viagogo, Seatwave & Co did not just apply a “shady” business model­.

attracting­more than touts alone. In fact four years ago especially in

Two journalists worked undercover at Viagogo and Seatwave and

the UK there were already massive protests against secondary ticketing­

filmed how the company’s staff bought and sold tickets, on their own

and its main players. There have been political initiatives to ban

initiative or working together with so called ‘power sellers’. The report

secondary­ticketing, but the majority of UK politicians and officials in

reveals that in fact the majority of tickets on these ticket exchanges­ have definitely not been offered by fans to be bought by fans.

8

VIP NEWS >

MARCH 2012

> INDEPTH STORY > THE GREAT TICKET SWINDLE

The TV-report even showed how staff members buying tickets under false identity with credit cards issued bearing the names of relatives to get around the capping of ticket sales per person at websites of primary ticket vendors.

And if this is not enough, the programme identified leading UK promoters­such as Live Nation UK, SJM Concerts or Metropolis Music­ as allocating significant ticket contingents to these companies­. We were informed that SJM Concerts provided 29.000 tickets for the 2011 Take That tour to Viagogo, and another 9.000 tickets for the upcoming Coldplay tour. Live Nation UK it was also reported, provided­ more than 3,000 tickets for the 2012 tour of Westlife and another 2,200 tickets for the UK tour of Rihanna.

Do they pay their employees good salaries or do they even Viagogo even filed an interim injunction to stop the broadcast of the

have a bonus scheme for successful sales results?

TV-report, but a High Court refused it on all points.

– Viagogo internally had a culture of intense commercial aggression, as can be seen from the speech our undercover reporter filmed made

VIP News spoke with David Henshaw, the Executive Producer of the

by Eric Baker to the UK staff.

Great Ticket Scandal after the TV-report was aired.

(In that particular scene Viagogo-CEO Baker is filmed at a company What sort of response did you get after the broadcast of the

team meeting when asked about new legal efforts in the UK to cap

“Great Ticket Swindle”?

prices for secondary tickets at no than 10 percent on the face value.

– The response both from the music industry and from the public

Bakers replied: “The odds of that law passing in this country are about

to the programme was huge. At one stage, the programme was

the same as the odds of you turning on your telly and seeing me play

top trend on Twitter in the UK and second in the world. There was

keeper for Chelsea!”)

an avalanche­of angry comments from concertgoers who knew something­strange was going on, but had never seen the reality. In

– It was clear that - apart from the so-called ‘power sellers’, those

the music industry, Radiohead announced that they would from now

who benefit from Viagogo’s resale of primary tickets are promoters­

on only sell tickets through trustworthy agencies that could prove

and event organizers. There has been much discussion in the UK

they dealt fairly with the public. Music Week ran a three-page feature

music­trade press about this, especially in Music Week.

on the programme, and it was discussed in a debate in the House of Commons in Parliament.

Secondary ticketing became a very profitable business at the expense of concertgoers and fans. Do you expect that the

How did the undercover journalists find working for Viagogo

“Great Ticket Swindle” will lead to ticket buyers taking more

& Seatwave?

care about where they buy their tickets in the future?

– They found both companies fairly intense in their expectations of

– I definitely think, judging by the immense response on Twitter

the work force. Seatwave was a little more relaxed than Viagogo,

and elsewhere, that large numbers of fans will think twice before

which was a very competitive environment. In both companies it was

spending­two or three times the face value on a ticket. People accept

constantly emphasised how important it was to keep good relations

that if a concert is sold out, there is a market in resold tickets. What

with the ‘power sellers’ - the touts who supplied large numbers of

they don’t accept is that tickets that should have been on sale in the

tickets.

box office are never made available to ordinary fans at face value.

While working for Viagogo, did the journalists discover how

The entire TV-report can be seen on Youtube at:

Viagogo works internally with their subsidiaries in France or

http://www.youtube.com/

Germany?

watch?v=WWlnL8drSdw&feature=youtube

– We didn’t find out a great deal about Viagogo’s operation outside of the UK

9

VIP NEWS >

MARCH 2012

> INDEPTH STORY > THE GREAT TICKET SWINDLE

Biljettbluffen - A Forerunner of The Great Ticket Swindle Manfred Tari mt@vip-booking.com Sweden was surprised to learn about the

Petra Wangler

facts that I presented and promised to take action. Later he stated that he had informed­ the staff about the policy that the two tickets­ each staff member is allowed are meant for personal use only. The same rule - no reselling­is allowed - applies to the sponsors­.

Something­he said he reminded them of after­the TV report.

Nyamko Sabuni, then minister responsible for consumer issues, had stated in the past that it is really up to the music business and concerts promoters themselves to take action in the matter. But after the TV report she was “prepared to reconsider a new legislation”.

At ILMC Hultsfred festival promoter Gunnar

indeed is organized and that the flow of

Nothing happened though. The secondary

Lagerman told VIP News that a similar TV-

tickets­comes from several directions:

ticket market is still going strong and the fans

Report about secondary ticketing has been

1. Fans and others that simply buy a lot of

still suffer here in Sweden.

show by the public TV-station SVT of the

tickets to sell to others for a higher price.

Swedish Broadcasting Corporation. VIP News

Sometimes students are approached to sit

Did you receive any responses after

spoke to Petra M Wangler, the producer of

by the phone / computer for hours to buy

your TV-report was aired either from

the report about her findings and the results

all they can.

companies­mentioned in the report or from concertgoers that had purchased

of the report.

2. Sponsors that resell their tickets.

When did you broadcast the TV-report

tickets on secondary ticket exchanges?

– The report was heavily covered in the

about secondary ticketing in Sweden

3. Employees at the ticket offices that break

press and some journalists have kept on

and what was the title of the report?

the rules and - for dirty money - print too

investigating­the secondary ticket market

– SVT aired the full report in September 2010.

many tickets to customers linked to the

but as far as I know this is a moral question

It was one episode of the award winning­ secondary­ market.

and no one (except the fans) is willing to

and critically acclaimed series “Uppdrag­

deal with it for real. The answer is of course

Granskning­”

/”Mission:

Investigating­

4. And - most surprisingly, representatives of

because­of the money involved. It’s all about

Journalism­ ”. The episode headline read

the primary market that sell tickets directly to

“I’ll scratch your back - you’ll scratch mine”,

“Biljettbluffen” /”The Ticket Scam”.

the secondary market - under the table.

you see. And the fans- well they are the

Can you please elaborate on the findings

Who else appears with quotes and

change though, since the international

and discoveries of the report?

statements­in your report?

artists­tend to tour more nowadays then

– It proved, thanks to several anonymous

– One of my sources confirms a deal like

before but well - I have no facts pointing in

sources that appeared in the programme,

this going down at the Live Nation office in

that direction­at all.

that the secondary ticket market for concerts

Sweden­ . Carl Pernow, CEO of Live Nation

ones that pay. I personally thought it would

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VIP NEWS >

MARCH 2012

> INDEPTH STORY > THE GREAT TICKET SWINDLE

Secondary Ticketing in Denmark Manfred Tari mt@vip-booking.com

The financial gains offered by secondary­ ways things are done today through portals ticketing­have over the years become a

as Viagogo, Seatwave and others are in my

huge problem in Europe. Also at ILMC VIP

opinion stealing from the artist. Moreover

News ran into to Jeppe Michael Jensen of

it damages the whole industry as we as

the primary­ticket company Venuepoint.net.

primary­ticketing agents have growing costs

In the light of the Great Ticket Swindle he

for customer service etc.

Jeppe Michael Jensen

got back to us shortly after the conference to discuss the secondary ticketing situation in

Do you know if Danish promoters are

Denmark.

actually­working together with these companies by supplying them with

How would you describe the current­ ticketing­ contingents? secondary­ticketing

situation

in

– NO!

Denmark­?

– I have been in ticketing for 12 years and

Do you have any knowledge of how

secondary­ticketing used to a problem,

many tickets in general are sold via

however­it was minor compared to what

secondary­ticketing sites in Denmark?

it is today. First sites such as Ebay and

– No.

Please

elaborate

on

why

they

do

this and about the state of the legal

Danish­parallel­dba.dk were the platform for individuals­who made an extra income

What kind of measures have been

from scalping. Danish legislation forbids the

undertaken­so far to offset secondary

selling of tickets at over face value, which

ticketing?

– All is still pending at our lawyers. We do also

helped, as no real enterprise was active on

– All our tickets are personal however we

have a dialogue with the Danish Consumer­

Danish soil. This has changed with Viagogo,

only randomly check for identity at the

Ombudsman on how to better enforce the

which recently started a Danish version of

venues­ . We generally warn consumers

current legislation.

their web site. Today we are in contact with

through the media and through our partner

fans on a regular basis who have bought

sites of buying­tickets second hand.

tickets through Viagogo and the problem is

proceedings­...

Venuepoint

is

the

company

behind

Billetlugen.­dk­­. Since its launch in 2000 the What is the legal situation on secondary

primary ticket platform became the leading­

ticketing in Denmark?

ticketing outlet in Denmark and operates­

Which are the main companies offering

– It is prohibited to resell tickets above face

ticketing­platform

secondary concert tickets in Denmark?

value unless you have permission from the

Norway­and biljettforum.se in Sweden. In

–

promoter.

2011 the Company gained a revenue of

increasing­dramatically.

Viagogo.dk,

Dba.dk,

Allebilletter.dk,

Buymyticket.­ dk­while Seatwave is not yet

Billetportalen.no

in

more than 100 million Euro and employs Venuepoint also just filed an interim

50 people. At the time of the interview­ ,

injunction­against Viagogo.

Venuepoint­has been sold to Nordisk­Film, a

Can you please explain your point of

– We believe they have violated our

company­producing and distributing­creative­

opinion of the practice of secondary

trademarks­by buying Google adwords in our

content in movies, TV and games in four

ticketing­?

and our partner’s name.

Nordic­ markets.

active­in DK

– There is of course a legitimate need for consumers to resell tickets they cannot use

For further information please check:

for some reason. However the industrialized

www.venuepoint.net

11

VIP NEWS >

MARCH 2012

> INDEPTH STORY > THE GREAT TICKET SWINDLE

The Great Ticket Swindle from a Legal Perspective Manfred Tari mt@vip-booking.com

The Great Ticket Swindle also covers legal­ issues­within the report and therefore

Kai Hermes

Are there similar consumer protection laws in place the UK?

featured­an interview with a legal expert. The

– In so far as this is about a “business-

report features statements from Christian

to-consumer­ ” (b2c) constellation and the

Twigg-Flesner, a professor at the University

question of unfair commercial practices the

of Hull who concluded that Viagogo’s claim,

consumers in Germany and England should

to be a ticket exchange from fans to fans

be equally protected due to the directive

actually­is a misleading of consumers.

2005/29/EC of 11 March 2005 concerning­ unfair

business-to-consumer

commercial

But as the Great Ticket Swindle revealed

practices (so called UCP-directive). This

that Viagogo has been supplied with

directive­demands a complete harmonization­

29.000 tickets for the UK-tour of Take That

of the unfair competition law across Europe

in 2011 promoted by the UK market leader

in regard to unfair commercial practices against consumers.

SJM Concerts­, the German promoter MCT successfully­banned secondary ticketing for

VIP News asked Hermes to watch the Great

the three shows he promoted with the act

Ticket Swindle and to evaluate on the legal

In reference to the business practises

in Germany.

aspects raised as part of the report.

of Viagogo are there also other law

To achieve this MCT worked together with

How do you comment on the findings

consumers from these kind of business

Smart Tickets and the law firm CMS Hasche

of the Great Ticket Swindle from a legal

methods?

Sigle. Kai Hermes was one of the lawyers

point of view?

– Competitors or consumer protection

who on behalf of MCT laid out the terms and

– Viagogo and the other firms present

authorities­can attack an infringement of

conditions that went along with the tickets

themselves­as ticket exchanges that enable­

the UWG. A complaint to the consumer

for these concerts and explicitly forbade the

fans to buy and sell tickets from each other

protection­authorities could be helpful. The

resale of tickets. Furthermore all tickets were

(“fan to fan”). However, according to the

information of consumers could be another­

sold personalized like aviation tickets, while

report of “Dispatches” staff members sell

possibility to protect them against the

Smart tickets supplied a ticketing system that

the majority of tickets. These employees

business­methods of these exchanges. From

enabled the security staff of the promoter

optionally­change the prices for the tickets­

a legal point of view the personalization­of

to check in real time a ticket data bank at

in order to get the maximum of profit. Thus

tickets according to German law provides

the doors of the venues, checking if tickets

the consumers get false information about

for another protection of the consumers

were valid and that the name printed on the

the nature of the sales process, about who

against the distribution of tickets via such

ticket matched the ID-card of the card holder­.

is the seller and about the manner in which

“exchanges­ ” that are in fact selling the

This ensured that tickets sold via second-

the price is calculated. This is misleading.

tickets­through their own staff as commercial­

ary ticketing­websites were identified and

Moreover­, it is likely to be an infringement

dealers.

declared­invalid. Buyers of these tickets have

of the so-called black list of the German

been supplied with an information sheet

Unfair­Competition Act (UWG) with the

Kai Hermes can reached at CMS Hasche

how to sue the seller of those tickets.

consequence­that these commercial practices

Sigle, for further information please go

are in all circumstances considered unfair.

to: http://www.cms-hs.com

opportunities­in Germany to protect

12

VIP NEWS >

MARCH 2012

> INDEPTH STORY > THE GREAT TICKET SWINDLE

A Wider View of The Great Ticket Scandal Allan McGowan am@vip-booking.com

vital and interesting points, it also missed out

tickets­made available, and the size of the

large chunks of the bigger picture…

venues. The better the tour can predict demand­, and price tickets accurately against

Bringing

investigative

fans expectation of value, the more effective

techniques­to bear, Dispatches sought to

an

arsenal

of

the yield will be in returning a profit on the

expose­what it had clearly predetermined

risked capital.

was the dark side of the hitherto opaque

Steve Machin

and mysterious world of the concert industry­

What risk? A question asked by the

- ticket sales and resales­ . The sense of

programme­was “how hard is it to predict

entitlement­and expectation­that fans can

how successful a comeback tour by Take

show, rightly or wrongly, regarding an act

That might be?” It was raised precisely to

and their tickets­is startling and Dispatches

undermine­the notion that there is any risk

exploited this highly charged topic to create­

in promoting concerts. While some tours are

what it portrayed as a sensational scandal­.

inherently more risky than others, one only

A pioneer of the European live entertainment­

has to look at the annual returns filed by

space, Steve Machin has a wealth of

But while the programme­did uncover what

Live Nation to see razor thin margins where

experience­in

appeared to be genuine legal concerns

even a small amount of increased risk could

marketing­. He was Head of Music Services­

around some aspects of the descriptions

significantly­impact upon the business.

for Ticketmaster Europe where he was

of the resale market, overall I would argue

responsible­for developing new services and

that the sensationalist approach that it took

client strategies across Europe and before­that

failed to give an accurate representation of

Risky Business

ran UK National Operations for Channelfly­

the complex economics of the 21st century

So how do the promoters reduce their

(MAMA Group). While at Ticketmaster­, Steve

ticketing market.

risk? By selling tickets at prices that are low

ticketing

strategy

and

introduced the concept of dynamic pricing

enough to ensure that sufficient attendees

to European concert promoters and initiated

provide a return on investment, and that

the charity ticket auction program used by

Rockonomics

price, for some of the tickets is below market

iTunes. He also worked with Tixdaq, the UK

In order to understand this, we first

value, while for others is above market value.

ticket comparison and data service launched

need a quick (and simplified) overview of

in 2007, to monitor the burgeoning ticket

rockonomics­. Economists talk of supply and

It is a common complaint that “music or

resale market.

demand, yield management and mitigation­

concerts­cannot be reduced to a commodity­

of risk - do these principles apply to the sale

and traded” - I am no apologist for the areas­

He is an evangelist for the uniquely powerful­

of tickets? Absolutely. The promoter acts as

of the resale market that were exposed

role that the live experience plays throughout­

an initial speculator, buying the performances­

as legally­challenging from a consumer

a fan’s relationship with an artist and how that

(and related services such as venue hire)

protection­viewpoint, nor making any claims

relationship can be nurtured and developed­

hoping­that they can make a profit on the

as to whether it is right or wrong to trade

through technology. He presently heads up

total­cost of the tour, by selling­sufficient

tickets - that is not the subject of this piece

Stormcrowd - an entertainment consultancy

tickets­at the right prices. The promoter­ – but what is clear is that tickets ARE traded

specializing in ticketing and social­commerce.

assumes­risk from the performers.

like commodities. That is in part because there continues to be a consistent disparity

14

In this article he argues that whilst Channel­4’s

The perceived demand impacts upon supply­

between the market price of a ticket and the

Great Ticket Scandal raised some extremely­

variables - ticket pricing, the number of

published face value at which it is first sold.

VIP NEWS >

MARCH 2012

> INDEPTH STORY > THE GREAT TICKET SWINDLE

Not all tickets are created equal, and over

they did not tell the whole story about many

insensitive­customers who are willing to pay

time the value of each ticket will vary - see

of the points that they covered.

a premium to acquire tickets closer to the

a recent article by PRS for Music for a good

event date.

review of the economics of ticket discounting

1. Fans learned that a significant proportion­

- the “front rows” get traded while there are

of tickets sold on ViaGoGo and Seatwave are

3. More surprising was the evidence that

still seats available “at the back”

not sourced from individual fans looking­to

staff at ViaGoGo have purchased tickets

sell tickets that can no longer be used - the

from primary­vendors such as Ticketmaster

The internet has simply made it much easier

notion of being exclusively fan-to-fan is a

to resell­using the company’s own “internal­

to buy and sell most products, everything

misnomer as tickets come from brokers­and

seller­ ” accounts. There is a significant

from ipods to insurance and all points in

box-offices. It is worth noting, as Dispatches­

difference­between market clearing price

between. Tickets are no different and with

failed to mention, that Seatwave states

(which is generally­considered a good thing

arbitrage opportunity available the internet

clearly­on their website when tickets have

economically) and an exchange making the

allows buyers and sellers to easily connect

been made available directly by the box

market under false pretenses.

and transact at market price - leading to the

office­.

creation of an additional layer of speculation­

The public rage on twitter during the

- fans who buy more than they need, and

2. We also heard that on some tours,

broadcast­was aimed squarely at the

professional brokers investing in buying

ViaGoGo­and Seatwave are provided tickets­

exchanges­and promoters, and assumed (as

tickets­purely to resell - the cold harvesting

directly by the promoter to sell at the best

Dispatches suggested) that artists or their

of tickets.

price possible. The presumption was that

management are not aware that tickets­

tickets are always sold at astronomical prices­

are allocated to exchanges. Speaking to

above face-value. In reality, tickets are often­

Pollstar­reporter John Gammon following the

The Whole Truth

sold on exchanges, or other discount channel­

broadcast­, Live Nation’s Paul Latham stated

The Dispatches investigation wanted to

sites at significantly below face value. The

that Live Nation has never allocated tickets

ensure­that this programme was car-crash

cold truth is that exchanges can provide

without the knowledge and consent of the

television of the highest order. In doing so

access­to a cohort of demonstrably price

artists’ management. The Concert Promoters­

15

VIP NEWS >

MARCH 2012

> INDEPTH STORY > THE GREAT TICKET SWINDLE

Association issued a statement to the effect­

Built in part on largely one-sided questioning­

that placing tickets into the secondary

designed to elicit highly emotional responses

market­reduces prices by increasing supply,

from disgruntled fans who chose to purchase­

and ensures that additional value is captured

tickets (and similarly grief stricken tales

within the industry.

from disappointed fans who chose not to) the programme­failed to make a balanced

Dispatches also failed to mention that there

representation­of issues affecting the ticket

are already mechanisms available that make

business. All the primary stakeholders in the

ticket reselling more difficult should a tour

concert industry that i speak to are concerned­

choose to. These include paperless tickets

with how to get more fans, to habitually

that require the purchasing credit card to

attend­more shows, more often. That is the

be present or photo-ticket schemes such as

wider challenge that frames this debate.

that used by Glastonbury festival. However removing speculators exposes the tour to

(This article previously appeared in Record of

true demand, a point made eloquently earlier

the Day - a daily music industry newsletter­

this week by Bob Lefsetz in his industry blog

featuring the most relevant news along

(www.lefsetz.com) and this is not always

with a future hit track. As VIP –Booking

good news for the artists or promoters.

informs­the live industry so Record of the Day keeps other aspects of the industry – as they say, in tune. Sign up for a free trial at

The Fans Pay the Bills

recordoftheday.­com­)

The wider impact of price sensitivity on the concert business must be considered for

www.stormcrowd.com

everyone­competing for the same share of the fan wallet. Do fans who decide to not spend money on a ticket spend it on other concerts

Further reference

or other music entertainment products­or do

Bob Lefsetz (@lefsetz) on ticket

they spend it on computer games or fashion

scalping:

or some other category? Do fans who spend

http://lefsetz.com/wordpress/index.php/­

high sums of money on concert tickets spend

archives/2012/02/28/john-mayer-fights-

less at the venue on F&B or on merchandise?

scalpers/

Will dynamic pricing be a reality and provide genuine real-time market pricing for concerts

Pollstar review of Dispatches:

and would that be embraced by the industry

http://www.pollstar.com/blogs/news/­

and fans alike as a fair solution?

archive/2012/02/24/797458.aspx

Ultimately in such a complex market there

PRS article on ticket discounting:

are a lot more questions than answers - while

http://www.prsformusic.com/creators/

emotions clearly run high when discussing­

news/research/Documents/Economic%20

entertainment tickets, does it mean the

Insight%2024%2016_12_11.pdf

government­should legislate and introduce price regulation into efficient markets? After­

PRS article on Secondary Market

all the face value is an arbitrary price that

Analysis):

could have been set much higher or much

http://www.prsformusic.com/creators/news/

lower. And anyhow now that these markets­

research/Documents/Will%20Page%20

exist, can the genie be put back in the

(2006)%20Economic%20Insight%201.pdf

bottle­? Would it be helpful, and to whom?

Dispatches­successfully demonstrated that some fans care a lot about ticket pricing but that even more care about transparency.

16

MyMusicMailer.com enables artists to MAIL their music to more than 6.000 venues and agencies worldwide…

VIP NEWS > BUSINESS > MARCH 2012

MUSIC IN SHARES

Music in Shares Manfred Tari mt@vip-booking.com

Higher Revenue and a Lower Loss for Live Nation in 2011 Live Nation’sThe business report for 2011 improved compared to

than 6 percent. While the closing price on February 23 was at $10.5,

the year before. The concert giant managed to improve its revenue

the lowest price one day later was at $9.45. Actually the share price

result­from $5.065 to $5.383 billion and also lowered its net loss from

performance of LYV until February 24 performed well, but since then

minus­$228.3 to just minus $83 million. After the announcement of

came down to $9.34.

the results the share price of Live Nation suffered a sharp loss of more

CTS Eventim Lower Revenue in 2011 Shortly after Live Nation, CTS Eventim revealed its business results

before­Interests, Taxes, Depreciation and Amortisation (EBITDA)

for 2011. The revenue gross went down from 519.6 to 502.8 million­

moved up from 88 to 94.6 million Euros. The share price also benefits

Euros. In particular the revenue results for the Live-Entertainment

from the hope of possible compensation payments by Live Nation due

division­went down from 333.8 to 281 million Euro. Nevertheless

to the arbitration case between both companies. Currently the share

the shares gained as the Company still delivers profits. The Earnings­

stands at 25.76 Euro.

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MARCH 20 2012 NEWS > MISC > SEPTEMBER 2011 >12MARCHVIP VIP NEWS > MISC

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