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UK industry reacts to Waterson report [updated]

Responses range from cautious optimism to "bitter disappointment" as economist Michael Waterson presents his long-awaited review of the UK ticket resale sector

By Jon Chapple on 01 Jun 2016

Houses of Parliament, Michael Waterson report, Eric Hossinger

Michael Waterson presented the report in Parliament at 10am today


image © Eric Hossinger

The much-anticipated independent review of the UK’s secondary ticketing market, commissioned by the British government in October 2015 and released this morning, has divided industry figures with its call for greater enforcement of the Consumer Rights Act (CRA) but no recommendation of new legislation.

The 227-page Independent Review of Consumer Protection Measures concerning Online Secondary Ticketing Facilities, overseen by economist Professor Michael Waterson, rejected calls for an outright ban on touting or cap on resale prices. “The history of price caps in others spheres is not a propitious one, particularly where the set of sellers is not well defined; people find their way around them,” he wrote. “There is a question of who would enforce the cap and what resources they would employ. Merely declaring there to be a cap is not sufficient.”

It included eight main recommendations for the regulation of ticket resale:

  • That a lead body, such as National Trading Standards, carry out a concerted investigation of compliance with the CRA, followed by action coordinated with the police, which “may require dedicated funding for a limited period”
  • That enforcement action (and, if necessary, court proceedings) be taken over breaches of the CRA, including by companies selling tickets to British customers from abroad, “in order to test them in relation to practical scenarios”. Authorities should be able to impose a penalty of up to £5,000 per breach, with courts interpreting the rules more harshly for multiple listings
  • That if “within a reasonable time no progress has been made by secondary sites on compliance and identification of traders”, the government considers alternative approaches, such as mandatory resale licences for companies selling over a certain amount of tickets
  • That, with government assistance, the primary ticket industry forms a project group to ensure greater transparency for consumers on pricing (including compulsory charges), refunds, availability and the range of different ticket outlets and places to buy
  • That if the industry fails to form a project group of its own accord and implement the necessary recommendations as necessary, ministers should call a roundtable for primary ticket industry representatives
  • That the live event industry should be represented in the Cyber-security Information Sharing Partnership, a private-public initiative to share cyber-threat and vulnerability information,  which will “give the [ticketing] industry the ability to share, learn and seek advice from government and other business sectors”
  • That primary ticket vendors should “take seriously the possibility of mass purchase by individuals using bots who have no intention of attending the event and guard against this”. Prof Waterson writes that “captcha-type technologies are not sufficient in most cases”, and recommends that event promoters should “seriously consider requirements for individuals to prove they are indeed individuals by means such as confirmed identity technologies” and report bot activity to the police
  • That the industry should “continue to develop comprehensive approaches, such as a common standard for confirming the authenticity of tickets and common terms, and to improve consumer awareness of the standards and their benefits”, reducing consumer confusion

“Prof Waterson has clearly recognised long-term failings in the secondary market and makes nine pragmatic recommendations that, if implemented, will help reform the market

The report was well received by a coalition of 35 British artist managers, agents, promoters and industry figures, including Mumford & Sons manager Adam Tudhope, ATC Live’s Alex Bruford, Adele agent Lucy Dickins, Jeff Craft of X-ray Touring, ATC Management’s Brian Message, CAA’s Emma Banks and Mike Greek, Coda’s Rob Challice, Iron Maiden manager Rod Smallwood and Paul Pacifico of the Featured Artists Coalition, who put their names to a statement welcoming the “pragmatic recommendations”:

“Professor Waterson has clearly recognised long-term failings [in the secondary market] and makes nine pragmatic recommendations that, if implemented, will help reform the market. We believe that fans should be given every opportunity to buy and exchange tickets at the price they were intended – not see them used as collateral to boost the profits of scalpers.

“The music business has a significant role to play in driving change, and we are committed to work with partners to promote pro-consumer practices and technologies.

“However, we also reiterate Professor Waterson’s call for government to act and for secondary ticketing services to follow the law. Above all, we need a Consumer Rights Act that is fit for purpose, and to have the law on ticket resales enforced by Trading Standards.

“UK audiences deserve clarity and fairness, not a dysfunctional and under-regulated secondary ticketing market that causes untold harm to our world-beating creative and cultural sector.”

“I am bitterly disappointed that Prof Waterson has come to the conclusion that the consumer doesn’t need protection in the form of legislation”

Stuart Galbraith, founder and CEO of London-based promoter Kilimanjaro Live, tells IQ that while be believes “Professor Waterson has done a very good job in assessing what the state of the market is”, he is “bitterly disappointed that [Waterson] has come to the conclusion that the consumer doesn’t need protection in the form of legislation”.

“I’m very pleased to see that he’s highlighted that the CRA is being blatantly flouted, and that secondary ticketers are breaking the law with impunity,” he says, “but the overall conclusion of the report is that the industry needs to self-regulate, which is what we’ve been told for over a decade, and for over a decade we’ve seen customers being ripped off.”

Galbraith, who supports the criminalisation of touting, adds that Prof Waterson’s recommendations would be “fine if the government will provide funding, but that law [the CRA] is already there and it’s not being implemented”.

“The ideal policy is that resale wouldn’t be allowed, but that is predicated on the position that the ticket is a contract between the service provide and the customer, not a good or a thing”

Anton Lockwood, promotions director of DHP Family, “cautiously welcomes” the report “but would like to see how [the recommendations] will work in practice”.

“The biggest thing it’s missing,” he says, “is that nowhere that I can see has Professor Waterson addressed the question of, ‘What is a ticket?’

“The ideal policy is that resale wouldn’t be allowed, but that is predicated on the position that the ticket is a contract between the service provider, the concert provider, and the customer – and you can’t just go, ‘Well, it’s not that customer, it’s a different one.’ It’s like an airline: you can’t just say, ‘I can’t be bothered to get on a plane today, my mate can go instead.’ It just doesn’t work like that.”

He concludes: “In an ideal world [touting] would be banned but, realistically, it’s not going to happen, and I think the fact that Prof Waterson hasn’t gone anywhere near it puts that idea to bed. So now it’s more about how we can use technology to solve the problem [within the framework of the CRA] and how it’s going to be funded to be able to do that.”

“We welcome Professor Waterson’s recognition of the benefits for consumers from the secondary market and his decision to reject further legislation at this stage”

With no legislation forthcoming, StubHub UK was, unsurprisingly, pleased with the professor’s findings. In a statement, a spokesman for the eBay-owned company said: “We welcome Professor Waterson’s recognition of the benefits for consumers from the secondary market and his decision to reject further legislation at this stage, including price caps and any general resale bans or bans for ‘crown jewel’ events. We also welcome the suggested action on bots and the other measures which are directed towards the primary market.

“But we are concerned that there are still insufficient legal safeguards to stop event organisers using row and seat number details to cancel without compensation tickets offered for resale.  Transparency should not come at the expense of people’s right to resell their tickets.”

Jonathan Brown, chief executive of self-regulating UK ticketing body the Society of Ticket Agents and Retailers (STAR), says he “welcomes and supports these efforts to safeguard the future of this hugely important industry” and recommends that “the most effective way to achieve improvements” in the sector is “to extend [STAR’s] current Code of Practice to encompass resale”.

“Secondary sites must take this opportunity to show they are willing to take action, otherwise people will be looking to the government to step in”

Alex Neill, director of policy and campaigns for Which?, which earlier this week reported on the large numbers of tickets being resold in breach of the CRA, comments: “Our research found extensive examples of tickets being sold unlawfully, so it’s right that secondary ticketing sites have clearly been told they are responsible for complying with the law. The government and Trading Standards must now ensure they can take strong action to punish any sites found breaking the rules.

“Fans are rightly frustrated when they see tickets being sold on the secondary market at hugely inflated prices, particularly when they are being sold on an industrial scale, so it’s good to see that the review has acknowledged there is much more the industry needs to do to combat this problem. They must take this opportunity to show they are willing to take action, otherwise people will be looking to the government to step in.”

“The report gives no indication of what enforcement could be relied upon should they still refuse to fall in line with existing legislation”

The CEO of independent British ticket agency WeGotTickets, Dave Newton, praises the report but notes that he would have like to have seen a recommendation for standardised ticket formats.

“One big step forward would be to standardise, or at least open up, the format of a ‘ticket’ so that redemption/entry systems could be installed across all venues in the UK that are not dependent on the primary ticket seller,” he says. “WeGotTickets would have liked to see this recommendation in the report but are still hopeful that this is something that could come as a result of the recommendation that ‘the Government assists the primary ticket industry as a whole to form a project group to examine and standardise’.”

“In our view the only way fans can be properly protected is through a blanket ban on resale for profit”

A statement from ‘fair-to-fan’ ticket exchange Twickets, which only allows sales for face value or less, echoes that it would like to have seen stronger recommendations from Prof Waterson – namely an outright ban on for-profit resale – but nevertheless says it is “delighted to see Professor Waterson’s report address our recent parliamentary petition […] calling for greater protection against touts in the UK”.

“Ideally, we would like to have seen the report go further to protect fans,” comments founder Richard Davies. “It acknowledges that profiteering prevents consumers securing a ticket, yet calls for evidence of manipulation before recommending a price-cap.

“The report further blames event organisers for creating the conditions for the secondary one, but doesn’t consider that they are seeking to make music, arts and sports events affordable.

“In our view the only way fans can be properly protected is through a blanket ban on resale for profit – as has been implemented in other markets around the world, and was successfully achieved for London 2012 [Olympics].”

“How could the recommendations work when one of the world’s biggest primary ticket agents owns one of the world’s biggest secondary sites?”

Stuart Cain, managing director of the NEC Group’s in-house ticketer, The Ticket Factory, which lobbied for a price cap or outright ban on resale and has a partnership with Twickets, calls the report “another wet squib and a kick in the teeth for artists and true music fans” and questions how the recommendations could work “when one of the world’s biggest primary ticket agents [Ticketmaster] owns one of the world’s biggest secondary sites [Seatwave]”.

“The government should be promoting ways of working with the industry to address touting and cybercrime and helping the whole industry to do this,” he says. “Funny that it set up task forces to manage touting for the Olympics when the eyes of the world were watching and it was a big political game, but doesn’t seem to want to play when their reputation is not at risk.”

This article will be updated with more reactions from industry figures as we receive them.

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