When ticketing hits the headlines, it is never good news. No journalist ever writes about how successful a ticketing operation is or of fair and reasonable prices. Alas, it is the lot of the ticketing industry to be an industry where no news is good news.

In recent days ticketing has hit the headlines for the wrong reasons in two separate “scandals”, the Olympics and the ticketing companies, Viagogo and Seatwave.

At the heart of both of these stories lies the same issue - that demand outstrips supply. More people want tickets than there are available. Naturally, when people can’t get tickets they get upset and that is when the complaints come in.

In many ways I feel sorry for Paul Williamson, the head of ticketing for the Olympics, and his team. It really is a case of damned if you do and damned if you don’t. His job, primarily, is to ensure that London 2012 meets it’s commercial targets. The cost of staging the Olympics is enormous and a good deal of that cost will be met through commercial enterprises including sponsorship and ticket sales. But alongside that he also has a responsibility to ensure fair access to tickets and to manage the ticketing requirements of the Olympic family. These three elements are not necessarily compatible. On top of this he has to ensure that every ticket is full - the complaints and outrage we have seen around Olympic ticketing are nothing compared to what will be stirred up if there are banks of empty seats at Olympic events.

Whilst not denying that mistakes have been made, not least around the resale programme, I think that they have done a pretty good job. They have used the natural excitement of the onsale of tickets to essentially shift the tickets that will be hardest to sell, holding back the tickets that they know will sell without any problem until all the more difficult ones have gone.  People may think that this is unfair, but in reality they have ensured that more people will get a chance to experience the Olympics by “encouraging” them to buy a ticket that they wouldn’t have otherwise bought, rather than creating an unsustainable scramble for popular seats and leaving many more people disillusioned and tickets unsold. 

There will still be complaints, there will be people who are unable to get tickets - but with only limited numbers of seats there really is no way to avoid this.

Supply and demand is the business model for sites like Viagogo and Seatwave. They provide an online ticket exchange where event tickets can be bought or sold with prices determined by how popular the event can be. This week, the Channel 4 programme, Dispatches presented an investigation into the practices and methods of these two companies. The reaction was one of shock and outrage, but for those of us who work in the industry it contained nothing of any surprise.

The major “revelation” was that these companies are supplied with primary allocation (i.e were given seats to sell directly by the event organiser)  which is then sold on for sums way above face value. They interviewed many people who hadn’t been able to buy tickets for their favourite band,  who then complained that the tickets were then available for sale on these resale sites.

The second “revelation” is that not all the people who sell tickets on the resale sites are ordinary members of the public, but rather ticket brokers who buy up huge quantities of tickets with the express intention of reselling them.

Finally the third “revelation” was that Viagogo has a bank of credit cards that they use to purchase tickets themselves which they then resell on site.

When I went on to Twitter to question the balance and impartiality of the programme, I was quickly deluged with responses. So let us deal with each of these revelations in turn an try to restore a bit of balance to the argument.

Starting with the final “revelation” (which in fact was nothing new as it was “exposed” by the Sunday Times over a year ago), the use of multiple credit cards to purchase tickets.  This is the one that I do think is sharp practice  - but for the sake of balance I will let you know what Viagogo’s explanation for this is ( a privilege denied to them in the programme). Viagogo (and Seatwave) have a guarantee that customers who buy tickets from them will get tickets and in the event that there is a problem with tickets. Viagogo say that they will source (or use tickets that they have sourced) directly in and order to meet their guarantee. Now this practise of buying tickets on a credit card to meet customer demand is common amongst many primary ticket agents. What Viagogo have failed to explain is why this seemingly reasonable procedure has to be conducted using multiple cards registered to multiple addresses.

The second “revelation” that some of the people selling tickets on the sites are doing so with tickets that they have bought in order to deliberately resell them is up there with the one about the Pope being Catholic. This “touting” has been going on for years, way before Seatwave and Viagogo - way before the internet. Now I am not defending this at all, as both a consumer and ticketing professional it is not something that I happy with, but I recognise that we live in a free market - that if someone buys something then they have the right to resell it for whatever price. Now there is a separate argument about whether a ticket is a possession or a license to enter which carries certain conditions (such as it cannot be resold for commercial gain) - but we will save that for another time. Fundamentally, though, we live in a free market, capitalist economy and reselling tickets is not illegal (except if they are football or Olympic tickets). In the days before Viagogo and Seatwave, people wishing to buy tickets from touts had no option but to take a risk and buy their tickets wherever they could find them, with no guarantees that they wouldn’t be ripped off and defrauded.  A recent survey by STAR (Society of Ticket Agents and Retailers, of which I am a council member) found that one in ten people in the UK have been the victim of ticket fraud, a staggering statistic. What sites like Viagogo and Seatwave have done (and why I am an advocate of them), is to provide a safe environment for those transactions to take place in. Recognising that you can never stop the black market, I am pleased that if people choose to shop in it they can do so safe in the knowledge that they will not become a victim of crime. Buying tickets on these seats guarantees the consumer that they will see the event that they paid for, or at the very worst, will get their money back. It also protects them from ancillary crimes such as credit card fraud. Dispatches did not mention any of this - indeed the logical conclusion of the line that they were promoting was that these companies should stop operating and that the public should be left in to fend for themselves in the black market.

And so to the major “revelation” that Viagogo and Seatwave are supplied with primary allocation. Judging by comments sent to me on Twitter, this was the area that caused most anger.  For me, I was glad that this was exposed,  for I think that the major problem with this is the lack of transparency. But this is not the fault of Viagogo or Seatwave, but the promoters who insist that they keep quiet about it. Again, there is nothing new about promoters supplying tickets for sale through “unofficial” channels in order to benefit from above face. value sales - this has happened for years - again way before the internet. But is there anything wrong with it? Well this is the most controversial area and many have different opinions. Mine is thus:

The market value of a ticket is the price that someone is prepared to pay for it - so if a ticket is sold for four times the face value - that is the true market value. If tickets are being sold at a true market value which is above face value why shouldn’t the rights holders for the event, or the investors who have financed that event, benefit from that uplift? Who else should the money go to - the guy who has done nothing other than get his credit card out to buy and ticket and then resells it? If there is additional revenues to be earned I support the right of the creator to earn it. If those prices are true market value, people ask, why not price tickets at those prices in the first place? The answer is complicated and multi faceted. Partly it is because it is difficult to establish what TMV is before an event goes on sale and the TMV fluctuates dependent on supply and demand (think flight prices) but essentially there is a genuine desire to not price the majority out of the market. That is for both moral and economic reasons.

Of course it is galling when you have tried unsuccessfully to get a ticket only to find tickets available at inflated prices on sale elsewhere, particularly then to discover that it was primary allocation that could have been sold through “official” channels. But the reality is that the number of tickets that Dispatches reported had been allocated were tiny in proportion to the total numbers of tickets on sale. If those tickets hadn’t been allocated the chances of buying a ticket via the “official” channels would not have really increased. The tickets would still sell out and people would still be disappointed.  What would have happened is that the fewer number of tickets available on Seatwave and Viagogo would have been sold for even higher prices and none of that money would have made its way to the bands and promoters putting on the events.

What I would like to see, though, is more transparency, I would like promoters to be more open that they are supplying tickets to resale sites and to not be frightened of doing so. It was interesting an pleasing to see the recent adverts for Madonna’s upcoming gigs saying “to purchase premium seats and to resell tickets got to Viagogo” - open and upfront.

Finally, a couple more points that Dispatches didn’t recognise.

1.Over 50% of tickets sold via Viagogo and Seatwave are sold below face value - a reflection that true market value can mean prices going down as well as up.

2. That the economics of supply and demand means that if more tickets are available the price comes down, so Viagogo and Seatwave getting primary allocation is a good thing.  A few years ago I played a role in making sure this happened with theatre tickets, helping to establish a relationship between reselling sites and primary ticket agents. With the ticket agents selling tickets at their normal prices via these sites and greater number of tickets on sale, it makes it very difficult for touts to sell their tickets at vastly inflated prices.

3. No one forces people to pay inflated prices for tickets. If people didn’t pay it, the prices would come down.

P.S The programme also featured MP Sharon Hodgson who has unsuccessfully tried to introduce a private members bill that would make it illegal to sell tickets for over 10% above face value. This is extremely naive, not only would it drive the resale of tickets underground and into the hands of criminals but it would also bring about the end of face values. What is the face value of an airline ticket or a hotel room?  It doesn’t exist. Neither would it in event ticketing, if Sharon Hodgson had her way.