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VIPNEWS PREMIUM > VOLUME 145 > MARCH 2012
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VIPNEWS > MARCH 2012
It’s getting busy again – in fact I’m so busy
I haven’t mentioned seagulls for ages – has
anybody noticed? Hands up – oh, a few of
you then…and just as I mention this, Shitty ,
the most cross eyed seagull in Brighton
landed on the flat roof and toppled sideways
trying to hold one wing straight up – insolent
bird! Anyway, now that’s out of my system
– busy! – yes, what with a very full on ILMC
last weekend, and preparations for Canadian
Music Week in Toronto next week – March
21, then Tallinn Music Week at the end of
the month, it’s a wonder that the News
gets done at all! But what would you all do
without it? – Don’t answer that!
This year’s 24th edition of the International
Live Music Conference (ILMC) sold out in
advance again with a thousand live music
industry delegates from 61 countries
descending on London’s Royal Garden Hotel
to put the business to rights and to enjoy
themselves. Some, especially those that took
part in the football, at Wembley Stadium no
less (!), returned home a little bruised and
battered; the image of our very own Peter
Briggs, hopping around painfully on one leg,
whilst declaring that playing on the hallowed
turf was the best thing he’d ever done, will
stick in my mind for some time! What was
that? Oh, he tore his calf muscle – thanks for
asking, he’ll be all right in a couple of weeks.
My experience, and this same view was
confirmed by others, was that this year’s
ILMC (see report in this issue) had even more
of an international feel to it, with a wider
range of people involved in the meetings ,
and a lot of newer delegates standing up to
speak their piece – a very good thing! Both
the Emerging Markets session and a Market
Focus on China highlighted how things have
progressed in many of the international
markets , and even how live music has
been and is still applied to the process of
advocating peaceful communication in areas
recovering from and in some cases currently
beset by political and social unrest.
Of course we all know that the gathering
together of people to enjoy live music , as
evidenced by events like Live Aid, can produce
remarkably beneficial social effects . But it only
really struck me last week whilst attending a
Green Events and Innovations Conference
which involved Greener Festivals and the
AIF event at London’ s Royal Festival Hall last
week, - and I suppose I should have realised
this before - that so much can be learned
from the efficient and environmentally
effective people and resources management
of large scale festival events which can then
be applied to the better handling of large
gatherings of displaced people following
natural disasters and the effects of war and
political unrest. One speaker from the floor
in panel called, ‘Water – The Stuff of Life,
mentioned working in camps set up for
‘displaced people’ in Haiti really brought it
home to me.
Another aspect which became clear in that
session was I hadn’t really considered, and
which highlights climate change, was that
we are now, this early in the year, officially
affected by drought in SE England, usually
apart from the watering of lawns, this is not
usually a pressing problem, but it certainly
is another weather problem which festival
organisers will have to take into account.
So – I’m off to find thermal underwear as
I’m told that it can drop to minus twenty
in Toronto during Canadian Music Week, in
the meantime – Ladies and Gentlemen – the
News…
COLOPHON >
VIP-News is published by:VIP-Booking145-157 St John StreetLondon Ec1V 4PW
Managing Director:Ronni [email protected]
General Manager:Peter [email protected]
Writer and editorial:Allan [email protected]
Writer:Manfred [email protected]
For advertising enquiries please contact:Peter [email protected]+44 870 755 0092
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McGowan’s Musings
3
VIPNEWS > MARCH 2012
Green Events & Innovations ConferenceAllan McGowan [email protected]
In the last couple of years attendance at the
International Live Music Conference (ILMC
24) has risen dramatically and according
to the organisers this year’s edition, again
held at London’s Royal Garden Hotel, looks
set to follow that trend which will mean
capping the numbers at a thousand plus and
disappointing some would be delegates. This
major live music industry event will take place
on 9th – 11th March.
For the second time the ILMC will commence
with “The Open Forum” with Greg Parmley
welcoming guests, Emma Banks (CAA), John
Reid (Live Nation), Wayne Forte (Entourage
Talent, US) and Scott Rodger, manager of
Arcade Fire, to review the past year and to
project on the fortunes of the live industry in
the coming months. The session is modelled
on the famous UK TV humorous quiz show
“Have I Got News For You”.
This year’s agenda will feature a look at
the Chinese Market, and the The Emerging
Markets ’ Place will compare the development
of the Eastern European Market with other
territories around the world. Also following
the major problems caused at various outdoo r
events around the world last year two regular
ILMC sessions The Booking Ring and The
Festival Forum will merge, to discuss the
production and promoter reactions to these
catastrophes.
The ILMC is well known for breaking news
and revealing opinions that directly influence
the development of the live industry, VIP
News will attend and report back.
More Details: www.ilmc.com
Ben Challis
C
M
Y
CM
MY
CY
CMY
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Anzeige_VIPMag_ProSky_X4.pdf 1 09.12.10 10:43
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First Venue to Come into Your Head
02 London, UK
Services Above and Beyond
Eat To The Beat
Most ProfessionalProfessional
Martin Goebbels
Liggers Favourite Festival
Glastonbury
Plumber of the Year
Andy Franks
Best in Show
Cirque De Soleil: Alegria
Least Painful Tour
Roger Waters
The People’s Assistant
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
VIPNEWS > MARCH 2012
ILMC 24Allan McGowan [email protected]
The 24th edition of the ILMC again sold
out in advance, attracting more than 1000
people and reaffirming the first word of the
event’s official title, International Live Music
Conference with attendance from no less
than 61 countries gathering to discuss all
aspects of the current state of the world’s live
music industry in the conference rooms, bars
and corridors of the Royal Garden Hotel in
London.
ILMC Founder, Martin Hopewell gave VIP
News his view of this year’s edition:
“Although it’s probably true that I probably
only ever get to hear the positive feedback,
the general feeling I picked up was that ILMC
24 was one of the best meetings - if not the
best - that we’ve had so far. Certainly I was
struck by the energy this year - from the rapid
pace of the registrations to the speed with
which the session rooms filled up. Everyone
seemed to be up for it. And there was a real
‘family’ feeling too - something of a return to
the meetings of the earliest years. Its always
been true that the discussion topics are at
the heart of the ILMC, and this year was no
different with high levels of participation and
information and an even greater spirit of
openness - but this year reminded me that
ILMC was also important as a place to make
and renew friendships, and how much it has
even become a part of some people’s lives. It
certainly gave me personally a much-needed
shot in the arm to keep going with what I’ve
begun to call my ‘bastard child’, and plans
for our big 25th anniversary edition are al-
ready well under way...”
Alongside the serious consideration of
matters ranging from secondary ticketing
– a burning topic rekindled by a recent UK
Channel 4 documentary (see report in this
issue), to new technologies, emerged and
emerging markets, event safety, venues,
contracts etc, etc, ILMC, notwithstanding its
post-apocalyptic theme, always has it’s lighter
moments and a full social agenda, including
football at Wembley Stadium. Certain ILMC
delegates have played on this hallowed
turf more often than most professional and
international players!
One event which started off as a light
hearted dig at the presentation of Awards –
The Arthurs, has found itself being taken very
seriously by both the winners and music and
in many cases daily international press. This
year’s winners were as follows:
Martin Hopewell
Thisyear’swinners
5
ILMC 24– The Conversion ProceedsManfred Tari [email protected]
Over the past three years or so the visitor
profile of the annual live music business
gathering at the Royal Garden Hotel in London
seems to be gradually changing. The ILMC is
getting younger while getting older. The rising
number of new delegates, from different
territories and new concert companies is
naturally stimulating the 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
the grand drama discussions that previously
entertained and impressed delegates as
industry heavyweights argued passionately in
order to get their point of views across.
Good examples of these were ‘The Booking
Ring’ chaired by Marc Lambelet from Black
Lamb, and the Tech Panel chaired by Ben
Challis from Charming Music and Steve
Machin from Stormcrowd. Many panels
are getting more comprehensive, while still
delivering facts or news that retain The ILMC
as what it’s known for, one of the two most
important live music conferences in Europe.
Yes Eurosonic is the other one and the main
difference between The ILMC and Eurosonic
Noorderslag is that The ILMC attracts global
players from the live music industry’s premier
league, while Eurosonic Noorderslag is a
hotspot for European festivals, agencies and
promoters.
Yes, The ILMC also has its own very valuable
share of upcoming European music industry
top shots and high potentials, but it is also
a conference for the establishment of the
concert business overseas and the rest of the
world. The ILMC has its own identity with a
more intimate peer to peer character than
most other music conferences in Europe .
While this issue is packed with articles
referring to the subject of secondary ticketing ,
it was almost surprising to see that this topic
played a less vital role than in previous years
even though The Great Ticket Swindle or
Secondary Ticketing was covered to some
degree in the opening session and popped up
here and there during the conference.
The ILMC 24 had other more relevant
subjects on its conference agenda as the
topic of secondary ticketing has already
been intensively covered in previous
years. However , The Sunday Supplement,
taking place on Sunday at 12.30 and a regular
ILMC session chaired by Allan Mc-Editor in
Chief-Gowan inevitably got to the subject.
Described as ‘intimate’ and usually attracting
only 25 people or so, The Sunday Supplement
is often one of the more active sessions of the
weekend, being run in round table fashion
and usually involving everyone in the room
in active discussion on topics that are often
not chosen until everyone is in the room. The
idea is to elaborate on discussions from the
previous days’ agenda and to pick up on topics
that may have been overlooked. This year, not
surprisingly, considering the recent impact of
the Channel 4 Dispatches TV documentary on
secondary ticketing (see report in this issue) ,
kicked off and remained on the subject of
ticketing . A lively debate followed involving
panelists and as ever all in the room. There
was even a positive ongoing outcome of sorts
to the dealing with this thorny subject as Steve
Machin of Storm Crowd suggested a possible
security initiative for ticketing, which is being
pursued at the moment by Steve and Andy
Lenthall of the PSA - watch this space!
With this in mind, VIP-News will deliver in its
next issue a proper report on The ILMC 24,
covering more of the panels.
Delegates at ILMC played football at Wembley, two of the players were Dick Molenaar and Claudio Trotta
VIPNEWS > MARCH 2012
6
VIPNEWS > MARCH 2012
Sale of HMV Live /Mama Group Enters Second StageAllan McGowan [email protected]
Following the early March deadline for bids for the live business
interests of HMV, the company is considering offers for its 13 music
venues, including major London music landmarks the Hammersmith
Apollo, and the Forum, along with its five festivals, put up for sale in a
‘strategic review’ of its live business, which it acquired from the Mama
Group in 2010.
According to The Independent music business players and private
equity outfits have expressed interest, and first round bidders were AEG
Live, the Live Nation backed Academy Music Group and equity types
and Time Out backers Oakley Capital.
HMV hired advisers at Citi to put the live music sector on sale in order to
help deal with its up to £180 million debts. First-round bids were made
by March 2. It is surmised that offers may only be in the region of £64
million, the sum HMV originally paid for the Mama Group.
Mama’s festivals and artist management businesses and marketing
partnership may not be wanted by AEG or the eventual buyer and it is
thought that MAMA co-founder Dean James is leading a consortium to
buy those parts of the firm that are not wanted.
The Academy Music Group already operates three major music venues
in London along with the operations of its main shareholder Live Nation ,
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
the first place when Live Nation was forced to sell to obtain competition
regulator approval for buy into AMG.
CBGB Festival PlannedAllan McGowan [email protected]
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
reappeared as 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
Hammersmith Apollo is up for sale
CGBG – New York
8
INDEPTHThis month’s feature deals with the furore resulting from the Channel 4 Dispatches
programme on 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 secondary ticketing had passed into acceptance, with associations like the CPA
and others adopting 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 [email protected]
The ‘unfiltered truth’ about “highly, highly immoral” business
methods at Viagogo & Co:
It was a didactic masterpiece of the very few recent journalistic
reports on questionable business practises in the music industry. On
February 23, the TV Station Channel 4 aired an insider report about
the business methods of Viagogo and Seatwave in the UK. The report
was made for the investigative magazine series Dispatches, and was
entitled the ‘Great Ticket Swindle’. The TV-report revealed in an
uncompromising manner, just how these prominent secondary ticket
exchanges run their businesses.
Over the years secondary ticketing has become a business model
attracting more than touts alone. In fact four years ago especially in
the UK there were already massive protests against secondary ticketing
and its main players. There have been political initiatives to ban
secondary ticketing, but the majority of UK politicians and officials in
governmental institutions rather decided not to interfere or to
regulate a 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.”
Thus Governmentally supported, the secondary ticketing market
in the meantime experienced a boom. Over the years the more
concerned and active opponents of secondary ticketing in the UK
live music business almost give up. Apart from a few exceptional
initiatives such as the Independent Festival Association’s ‘Ticket Trust’
ticket exchange.
Anyhow, the ‘Great Ticket Swindle’ TV-report produced evidence that
Viagogo, Seatwave & Co did not just apply a “shady” business model .
Two journalists worked undercover at Viagogo and Seatwave and
filmed how the company’s staff bought and sold tickets, on their own
initiative or working together with so called ‘power sellers’. The report
reveals that in fact the majority of tickets on these ticket exchanges
have definitely not been offered by fans to be bought by fans.
VIPNEWS > MARCH 2012 > INDEPTH STORY > THE GREAT TICKET SWINDLE
9
VIPNEWS > 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
promoters such 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.
Viagogo even filed an interim injunction to stop the broadcast of the
TV-report, but a High Court refused it on all points.
VIP News spoke with David Henshaw, the Executive Producer of the
Great Ticket Scandal after the TV-report was aired.
What sort of response did you get after the broadcast of the
“Great Ticket Swindle”?
– The response both from the music industry and from the public
to the programme was huge. At one stage, the programme was
top trend on Twitter in the UK and second in the world. There was
an avalanche of angry comments from concertgoers who knew
something strange was going on, but had never seen the reality. In
the music industry, Radiohead announced that they would from now
on only sell tickets through trustworthy agencies that could prove
they dealt fairly with the public. Music Week ran a three-page feature
on the programme, and it was discussed in a debate in the House of
Commons in Parliament.
How did the undercover journalists find working for Viagogo
& Seatwave?
– They found both companies fairly intense in their expectations of
the work force. Seatwave was a little more relaxed than Viagogo,
which was a very competitive environment. In both companies it was
constantly emphasised how important it was to keep good relations
with the ‘power sellers’ - the touts who supplied large numbers of
tickets.
While working for Viagogo, did the journalists discover how
Viagogo works internally with their subsidiaries in France or
Germany?
– We didn’t find out a great deal about Viagogo’s operation outside
of the UK
Do they pay their employees good salaries or do they even
have a bonus scheme for successful sales results?
– Viagogo internally had a culture of intense commercial aggression,
as can be seen from the speech our undercover reporter filmed made
by Eric Baker to the UK staff.
(In that particular scene Viagogo-CEO Baker is filmed at a company
team meeting when asked about new legal efforts in the UK to cap
prices for secondary tickets at no than 10 percent on the face value.
Bakers replied: “The odds of that law passing in this country are about
the same as the odds of you turning on your telly and seeing me play
keeper for Chelsea!”)
– It was clear that - apart from the so-called ‘power sellers’, those
who benefit from Viagogo’s resale of primary tickets are promoters
and event organizers. There has been much discussion in the UK
music trade press about this, especially in Music Week.
Secondary ticketing became a very profitable business at the
expense of concertgoers and fans. Do you expect that the
“Great Ticket Swindle” will lead to ticket buyers taking more
care about where they buy their tickets in the future?
– I definitely think, judging by the immense response on Twitter
and elsewhere, that large numbers of fans will think twice before
spending two or three times the face value on a ticket. People accept
that if a concert is sold out, there is a market in resold tickets. What
they don’t accept is that tickets that should have been on sale in the
box office are never made available to ordinary fans at face value.
The entire TV-report can be seen on Youtube at:
http://www.youtube.com/
watch?v=WWlnL8drSdw&feature=youtube
10
Biljettbluffen - A Forerunner of The Great Ticket Swindle Manfred Tari [email protected]
At ILMC Hultsfred festival promoter Gunnar
Lagerman told VIP News that a similar TV-
Report about secondary ticketing has been
show by the public TV-station SVT of the
Swedish Broadcasting Corporation. VIP News
spoke to Petra M Wangler, the producer of
the report about her findings and the results
of the report.
When did you broadcast the TV-report
about secondary ticketing in Sweden
and what was the title of the report?
– SVT aired the full report in September 2010.
It was one episode of the award winning
and critically acclaimed series “Uppdrag
Granskning ” /”Mission: Investigating
Journalism ”. The episode headline read
“Biljettbluffen” /”The Ticket Scam”.
Can you please elaborate on the findings
and discoveries of the report?
– It proved, thanks to several anonymous
sources that appeared in the programme,
that the secondary ticket market for concerts
indeed is organized and that the flow of
tickets comes from several directions:
1. Fans and others that simply buy a lot of
tickets to sell to others for a higher price.
Sometimes students are approached to sit
by the phone / computer for hours to buy
all they can.
2. Sponsors that resell their tickets.
3. Employees at the ticket offices that break
the rules and - for dirty money - print too
many tickets to customers linked to the
secondary market.
4. And - most surprisingly, representatives of
the primary market that sell tickets directly to
the secondary market - under the table.
Who else appears with quotes and
statements in your report?
– One of my sources confirms a deal like
this going down at the Live Nation office in
Sweden . Carl Pernow, CEO of Live Nation
Sweden was surprised to learn about the
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
reselling is allowed - applies to the sponsors .
Something he said he reminded them of
after the 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”.
Nothing happened though. The secondary
ticket market is still going strong and the fans
still suffer here in Sweden.
Did you receive any responses after
your TV-report was aired either from
companies mentioned in the report or
from concertgoers that had purchased
tickets on secondary ticket exchanges?
– The report was heavily covered in the
press and some journalists have kept on
investigating the secondary ticket market
but as far as I know this is a moral question
and no one (except the fans) is willing to
deal with it for real. The answer is of course
because of the money involved. It’s all about
“I’ll scratch your back - you’ll scratch mine”,
you see. And the fans- well they are the
ones that pay. I personally thought it would
change though, since the international
artists tend to tour more nowadays then
before but well - I have no facts pointing in
that direction at all.
Petra Wangler
VIPNEWS > MARCH 2012 > INDEPTH STORY > THE GREAT TICKET SWINDLE
Secondary Ticketing in Denmark Manfred Tari [email protected]
The financial gains offered by secondary
ticketing have over the years become a
huge problem in Europe. Also at ILMC VIP
News ran into to Jeppe Michael Jensen of
the primary ticket company Venuepoint.net.
In the light of the Great Ticket Swindle he
got back to us shortly after the conference
to discuss the secondary ticketing situation in
Denmark.
How would you describe the current
secondary ticketing situation in
Denmark ?
– I have been in ticketing for 12 years and
secondary ticketing used to a problem,
however it was minor compared to what
it is today. First sites such as Ebay and
Danish parallel dba.dk were the platform
for individuals who made an extra income
from scalping. Danish legislation forbids the
selling of tickets at over face value, which
helped, as no real enterprise was active on
Danish soil. This has changed with Viagogo,
which recently started a Danish version of
their web site. Today we are in contact with
fans on a regular basis who have bought
tickets through Viagogo and the problem is
increasing dramatically.
Which are the main companies offering
secondary concert tickets in Denmark?
– Viagogo.dk, Dba.dk, Allebilletter.dk,
Buymyticket. dk while Seatwave is not yet
active in DK
Can you please explain your point of
opinion of the practice of secondary
ticketing ?
– There is of course a legitimate need for
consumers to resell tickets they cannot use
for some reason. However the industrialized
ways things are done today through portals
as Viagogo, Seatwave and others are in my
opinion stealing from the artist. Moreover
it damages the whole industry as we as
primary ticketing agents have growing costs
for customer service etc.
Do you know if Danish promoters are
actually working together with these
companies by supplying them with
ticketing contingents?
– NO!
Do you have any knowledge of how
many tickets in general are sold via
secondary ticketing sites in Denmark?
– No.
What kind of measures have been
undertaken so far to offset secondary
ticketing?
– All our tickets are personal however we
only randomly check for identity at the
venues . We generally warn consumers
through the media and through our partner
sites of buying tickets second hand.
What is the legal situation on secondary
ticketing in Denmark?
– It is prohibited to resell tickets above face
value unless you have permission from the
promoter.
Venuepoint also just filed an interim
injunction against Viagogo.
– We believe they have violated our
trademarks by buying Google adwords in our
and our partner’s name.
Please elaborate on why they do
this and about the state of the legal
proceedings ...
– All is still pending at our lawyers. We do also
have a dialogue with the Danish Consumer
Ombudsman on how to better enforce the
current legislation.
Venuepoint is the company behind
Billetlugen. dk . Since its launch in 2000 the
primary ticket platform became the leading
ticketing outlet in Denmark and operates
ticketing platform Billetportalen.no in
Norway and biljettforum.se in Sweden. In
2011 the Company gained a revenue of
more than 100 million Euro and employs
50 people. At the time of the interview ,
Venuepoint has been sold to Nordisk Film, a
company producing and distributing creative
content in movies, TV and games in four
Nordic markets.
For further information please check:
www.venuepoint.net
11
VIPNEWS > MARCH 2012 > INDEPTH STORY > THE GREAT TICKET SWINDLE
Jeppe Michael Jensen
12
The Great Ticket Swindle also covers legal
issues within the report and therefore
featured an interview with a legal expert. The
report features statements from Christian
Twigg-Flesner, a professor at the University
of Hull who concluded that Viagogo’s claim,
to be a ticket exchange from fans to fans
actually is a misleading of consumers.
But as the Great Ticket Swindle revealed
that Viagogo has been supplied with
29.000 tickets for the UK-tour of Take That
in 2011 promoted by the UK market leader
SJM Concerts , the German promoter MCT
successfully banned secondary ticketing for
the three shows he promoted with the act
in Germany.
To achieve this MCT worked together with
Smart Tickets and the law firm CMS Hasche
Sigle. Kai Hermes was one of the lawyers
who on behalf of MCT laid out the terms and
conditions that went along with the tickets
for these concerts and explicitly forbade the
resale of tickets. Furthermore all tickets were
sold personalized like aviation tickets, while
Smart tickets supplied a ticketing system that
enabled the security staff of the promoter
to check in real time a ticket data bank at
the doors of the venues, checking if tickets
were valid and that the name printed on the
ticket matched the ID-card of the card holder .
This ensured that tickets sold via second-
ary ticketing websites were identified and
declared invalid. Buyers of these tickets have
been supplied with an information sheet
how to sue the seller of those tickets.
VIP News asked Hermes to watch the Great
Ticket Swindle and to evaluate on the legal
aspects raised as part of the report.
How do you comment on the findings
of the Great Ticket Swindle from a legal
point of view?
– Viagogo and the other firms present
themselves as ticket exchanges that enable
fans to buy and sell tickets from each other
(“fan to fan”). However, according to the
report of “Dispatches” staff members sell
the majority of tickets. These employees
optionally change the prices for the tickets
in order to get the maximum of profit. Thus
the consumers get false information about
the nature of the sales process, about who
is the seller and about the manner in which
the price is calculated. This is misleading.
Moreover , it is likely to be an infringement
of the so-called black list of the German
Unfair Competition Act (UWG) with the
consequence that these commercial practices
are in all circumstances considered unfair.
Are there similar consumer protection
laws in place the UK?
– In so far as this is about a “business-
to-consumer ” (b2c) constellation and the
question of unfair commercial practices the
consumers in Germany and England should
be equally protected due to the directive
2005/29/EC of 11 March 2005 concerning
unfair business-to-consumer commercial
practices (so called UCP-directive). This
directive demands a complete harmonization
of the unfair competition law across Europe
in regard to unfair commercial practices
against consumers.
In reference to the business practises
of Viagogo are there also other law
opportunities in Germany to protect
consumers from these kind of business
methods?
– Competitors or consumer protection
authorities can attack an infringement of
the UWG. A complaint to the consumer
protection authorities could be helpful. The
information of consumers could be another
possibility to protect them against the
business methods of these exchanges. From
a legal point of view the personalization of
tickets according to German law provides
for another protection of the consumers
against the distribution of tickets via such
“exchanges ” that are in fact selling the
tickets through their own staff as commercial
dealers.
Kai Hermes can reached at CMS Hasche
Sigle, for further information please go
to: http://www.cms-hs.com
The Great Ticket Swindle from a Legal PerspectiveManfred Tari [email protected]
VIPNEWS > MARCH 2012 > INDEPTH STORY > THE GREAT TICKET SWINDLE
Kai Hermes
A Wider View of The Great Ticket ScandalAllan McGowan [email protected]
A pioneer of the European live entertainment
space, Steve Machin has a wealth of
experience in ticketing strategy and
marketing . He was Head of Music Services
for Ticketmaster Europe where he was
responsible for developing new services and
client strategies across Europe and before that
ran UK National Operations for Channelfly
(MAMA Group). While at Ticketmaster , Steve
introduced the concept of dynamic pricing
to European concert promoters and initiated
the charity ticket auction program used by
iTunes. He also worked with Tixdaq, the UK
ticket comparison and data service launched
in 2007, to monitor the burgeoning ticket
resale market.
He is an evangelist for the uniquely powerful
role that the live experience plays throughout
a fan’s relationship with an artist and how that
relationship can be nurtured and developed
through technology. He presently heads up
Stormcrowd - an entertainment consultancy
specializing in ticketing and social commerce.
In this article he argues that whilst Channel 4’s
Great Ticket Scandal raised some extremely
vital and interesting points, it also missed out
large chunks of the bigger picture…
Bringing an arsenal of investigative
techniques to bear, Dispatches sought to
expose what it had clearly predetermined
was the dark side of the hitherto opaque
and mysterious world of the concert industry
- ticket sales and resales . The sense of
entitlement and expectation that fans can
show, rightly or wrongly, regarding an act
and their tickets is startling and Dispatches
exploited this highly charged topic to create
what it portrayed as a sensational scandal .
But while the programme did uncover what
appeared to be genuine legal concerns
around some aspects of the descriptions
of the resale market, overall I would argue
that the sensationalist approach that it took
failed to give an accurate representation of
the complex economics of the 21st century
ticketing market.
RockonomicsIn order to understand this, we first
need a quick (and simplified) overview of
rockonomics . Economists talk of supply and
demand, yield management and mitigation
of risk - do these principles apply to the sale
of tickets? Absolutely. The promoter acts as
an initial speculator, buying the performances
(and related services such as venue hire)
hoping that they can make a profit on the
total cost of the tour, by selling sufficient
tickets at the right prices. The promoter
assumes risk from the performers.
The perceived demand impacts upon supply
variables - ticket pricing, the number of
tickets made available, and the size of the
venues. The better the tour can predict
demand , and price tickets accurately against
fans expectation of value, the more effective
the yield will be in returning a profit on the
risked capital.
What risk? A question asked by the
programme was “how hard is it to predict
how successful a comeback tour by Take
That might be?” It was raised precisely to
undermine the notion that there is any risk
in promoting concerts. While some tours are
inherently more risky than others, one only
has to look at the annual returns filed by
Live Nation to see razor thin margins where
even a small amount of increased risk could
significantly impact upon the business.
Risky BusinessSo how do the promoters reduce their
risk? By selling tickets at prices that are low
enough to ensure that sufficient attendees
provide a return on investment, and that
price, for some of the tickets is below market
value, while for others is above market value.
It is a common complaint that “music or
concerts cannot be reduced to a commodity
and traded” - I am no apologist for the areas
of the resale market that were exposed
as legally challenging from a consumer
protection viewpoint, nor making any claims
as to whether it is right or wrong to trade
tickets - that is not the subject of this piece
– but what is clear is that tickets ARE traded
like commodities. That is in part because
there continues to be a consistent disparity
between the market price of a ticket and the
published face value at which it is first sold.
14
VIPNEWS > MARCH 2012 > INDEPTH STORY > THE GREAT TICKET SWINDLE
Steve Machin
Not all tickets are created equal, and over
time the value of each ticket will vary - see
a recent article by PRS for Music for a good
review of the economics of ticket discounting
- the “front rows” get traded while there are
still seats available “at the back”
The internet has simply made it much easier
to buy and sell most products, everything
from ipods to insurance and all points in
between. Tickets are no different and with
arbitrage opportunity available the internet
allows buyers and sellers to easily connect
and transact at market price - leading to the
creation of an additional layer of speculation
- fans who buy more than they need, and
professional brokers investing in buying
tickets purely to resell - the cold harvesting
of tickets.
The Whole TruthThe Dispatches investigation wanted to
ensure that this programme was car-crash
television of the highest order. In doing so
they did not tell the whole story about many
of the points that they covered.
1. Fans learned that a significant proportion
of tickets sold on ViaGoGo and Seatwave are
not sourced from individual fans looking to
sell tickets that can no longer be used - the
notion of being exclusively fan-to-fan is a
misnomer as tickets come from brokers and
box-offices. It is worth noting, as Dispatches
failed to mention, that Seatwave states
clearly on their website when tickets have
been made available directly by the box
office .
2. We also heard that on some tours,
ViaGoGo and Seatwave are provided tickets
directly by the promoter to sell at the best
price possible. The presumption was that
tickets are always sold at astronomical prices
above face-value. In reality, tickets are often
sold on exchanges, or other discount channel
sites at significantly below face value. The
cold truth is that exchanges can provide
access to a cohort of demonstrably price
insensitive customers who are willing to pay
a premium to acquire tickets closer to the
event date.
3. More surprising was the evidence that
staff at ViaGoGo have purchased tickets
from primary vendors such as Ticketmaster
to resell using the company’s own “internal
seller ” accounts. There is a significant
difference between market clearing price
(which is generally considered a good thing
economically) and an exchange making the
market under false pretenses.
The public rage on twitter during the
broadcast was aimed squarely at the
exchanges and promoters, and assumed (as
Dispatches suggested) that artists or their
management are not aware that tickets
are allocated to exchanges. Speaking to
Pollstar reporter John Gammon following the
broadcast , Live Nation’s Paul Latham stated
that Live Nation has never allocated tickets
without the knowledge and consent of the
artists’ management. The Concert Promoters
15
VIPNEWS > MARCH 2012 > INDEPTH STORY > THE GREAT TICKET SWINDLE
16
Association issued a statement to the effect
that placing tickets into the secondary
market reduces prices by increasing supply,
and ensures that additional value is captured
within the industry.
Dispatches also failed to mention that there
are already mechanisms available that make
ticket reselling more difficult should a tour
choose to. These include paperless tickets
that require the purchasing credit card to
be present or photo-ticket schemes such as
that used by Glastonbury festival. However
removing speculators exposes the tour to
true demand, a point made eloquently earlier
this week by Bob Lefsetz in his industry blog
(www.lefsetz.com) and this is not always
good news for the artists or promoters.
The Fans Pay the BillsThe wider impact of price sensitivity on the
concert business must be considered for
everyone competing for the same share of the
fan wallet. Do fans who decide to not spend
money on a ticket spend it on other concerts
or other music entertainment products or do
they spend it on computer games or fashion
or some other category? Do fans who spend
high sums of money on concert tickets spend
less at the venue on F&B or on merchandise?
Will dynamic pricing be a reality and provide
genuine real-time market pricing for concerts
and would that be embraced by the industry
and fans alike as a fair solution?
Ultimately in such a complex market there
are a lot more questions than answers - while
emotions clearly run high when discussing
entertainment tickets, does it mean the
government should legislate and introduce
price regulation into efficient markets? After
all the face value is an arbitrary price that
could have been set much higher or much
lower. And anyhow now that these markets
exist, can the genie be put back in the
bottle ? Would it be helpful, and to whom?
Dispatches successfully demonstrated that
some fans care a lot about ticket pricing but
that even more care about transparency.
Built in part on largely one-sided questioning
designed to elicit highly emotional responses
from disgruntled fans who chose to purchase
tickets (and similarly grief stricken tales
from disappointed fans who chose not to)
the programme failed to make a balanced
representation of issues affecting the ticket
business. All the primary stakeholders in the
concert industry that i speak to are concerned
with how to get more fans, to habitually
attend more shows, more often. That is the
wider challenge that frames this debate.
(This article previously appeared in Record of
the Day - a daily music industry newsletter
featuring the most relevant news along
with a future hit track. As VIP –Booking
informs the 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
recordoftheday. com )
www.stormcrowd.com
Further referenceBob Lefsetz (@lefsetz) on ticket
scalping:
http://lefsetz.com/wordpress/index.php/
archives/2012/02/28/john-mayer-fights-
scalpers/
Pollstar review of Dispatches:
http://www.pollstar.com/blogs/news/
archive/2012/02/24/797458.aspx
PRS article on ticket discounting:
http://www.prsformusic.com/creators/
news/research/Documents/Economic%20
Insight%2024%2016_12_11.pdf
PRS article on Secondary Market
Analysis):
http://www.prsformusic.com/creators/news/
research/Documents/Will%20Page%20
(2006)%20Economic%20Insight%201.pdf
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VIPNEWS > MARCH 2012 > INDEPTH STORY > THE GREAT TICKET SWINDLE
17
VIPNEWS > BUSINESS > MARCH 2012 MUSIC IN SHARES
Music in SharesManfred Tari [email protected]
Higher Revenue and a Lower Loss for Live Nation in 2011Live Nation’sThe business report for 2011 improved compared to
the year before. The concert giant managed to improve its revenue
result from $5.065 to $5.383 billion and also lowered its net loss from
minus $228.3 to just minus $83 million. After the announcement of
the results the share price of Live Nation suffered a sharp loss of more
than 6 percent. While the closing price on February 23 was at $10.5,
the lowest price one day later was at $9.45. Actually the share price
performance of LYV until February 24 performed well, but since then
came down to $9.34.
CTS Eventim Lower Revenue in 2011Shortly after Live Nation, CTS Eventim revealed its business results
for 2011. The revenue gross went down from 519.6 to 502.8 million
Euros. In particular the revenue results for the Live-Entertainment
division went down from 333.8 to 281 million Euro. Nevertheless
the shares gained as the Company still delivers profits. The Earnings
before Interests, Taxes, Depreciation and Amortisation (EBITDA)
moved up from 88 to 94.6 million Euros. The share price also benefits
from the hope of possible compensation payments by Live Nation due
to the arbitration case between both companies. Currently the share
stands at 25.76 Euro.
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VIPNEWS > MARCH 2012 VIPNEWS > MISC > SEPTEMBER 2011
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VIPNEWS > MISC > MARCH 2012 MEMBER PRESENTATION
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C.CLEAR
C.CLEAR IS NO STRANGER TO THE NECESSARY GRIND OF THIS INDUSTRY!
BORN IN QUEENS NY, SHE HTS THE MUSIC SCENE BY WAY OF HARLEM. SHE
FLIPS VARIOUS STYLES AS A SINGER/SONGWRITER/ MC AND IS BEST KNOWN
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Read more about C.CLEAR:
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