Why is it hard to get tickets to a Taylor Swift concert? Because there are an awful lot of Swifties and only so many concert dates, with only so many tickets going on sale each year.
Last week, the Government announced a new consultation on changes in the regulation of ticketing markets, responding to concerns that shortages reflect touts buying up tickets to sell on secondary markets. It will also consider other issues relating to the tickets market, such as the potential for fraud and dynamic pricing when tickets are first sold.
Only a minority of tickets for those and other cultural events are ever resold, however. Most people buy a ticket, keep it and go to the event. Of those resold, a 2016 government survey found that most go at or below the face value, as people shift tickets they don’t want for events where availability is not as tight.
It is understandable that people get frustrated when major events sell out early and there is fierce competition for those tickets that are resold. Policymakers have a responsibility not to shoot the messenger, though, and to regulate markets carefully.
Price caps are considered in the new consultation, but carry the same risks price caps always do. Sellers will get less for their tickets, and buyers will see fewer tickets available. This will tempt both sides of the transaction to go to more informal unregulated markets which are not intended to support ticket sales. In those settings, there will be less protection against fraud and fewer options for consumers when things go wrong.
It is important to remember that a small number of tickets bought and sold at what seem like high prices do not necessarily harm anyone and can have a positive economic impact. Tourists coming to the UK, for example, might see an event they didn’t manage to buy tickets for the moment they went on sale, and they’re willing to pay more as part of a trip of a lifetime that might already cost them thousands for flights, hotels and the like. Those tourists are a valuable source of income for all kinds of businesses here and the small number of tickets involved means the impact on UK fans isn’t material. Hurting ticket resale marketplaces by taking those valuable customers out of the secondary market will undermine the role they play for fans looking to buy and sell.
The more complicated, but potentially even more impactful changes would be adjustments to the legal responsibilities that ticket resale marketplaces have to protect consumers. To be clear, those marketplaces are already subject to general consumer protection regulation and have worked with regulators to improve the protection they provide over time. However, the concern is that ministers shift the legal responsibility from dishonest, or even fraudulent, sellers onto the marketplaces. Unfortunately, there are limits on the potential of independent, third-party marketplaces to verify tickets and, if they cannot do so and the changes go too far, they might need to leave the market.
This would leave consumers more vulnerable to exploitation by the original sellers of their tickets, who can set restrictive and unfair terms for ticket resale through their own platforms. The primary market where tickets are first sold is concentrated and this could make that problem worse. Again, if buyers and sellers are faced with that situation, they might resort to informal markets without the current consumer protections.
There is a better approach that the Government should take as this consultation progresses.
Problems in the ticket market are rarely confined to one part of the ecosystem. People have sometimes used bots to hoover up tickets in the primary market (though this is less widespread than people sometimes fear) and sell in the secondary market. Primary sellers have a role in preventing those bots from getting the tickets in the first place.
In preventing fraud, primary sellers of tickets could create interoperable systems so that secondary marketplaces can verify the tickets offered for sale on their sites.
Ministers should address legitimate concerns with a holistic approach that encourages the original sellers of tickets, secondary marketplaces and others involved to all do their bit to make buying and selling tickets an even fairer and safer experience. This is the same approach that underpins online safety regulation in other areas, giving regulators a role to ensure that each part of the ecosystem is doing its bit. Draconian changes that put all of the onus on one part of the market are far more disruptive and likely to prove counterproductive.
If regulation goes too far, the risks are clear. The functional secondary marketplace has an important role allowing people to sell surplus tickets and get to events when they didn’t win the race to buy them first. Break that, and we end up with a market where people buy and sell tickets with less transparency, fewer protections and no marketplace to easily compare prices. Too few tickets for events people are excited to attend is always a shame, but breaking the ticketing market will not ease that fundamental shortage.
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