Russia’s Ponominalu investigated over drip pricing
Russia’s Federal Antimonopoly Service (FAS) has opened an investigation into leading ticket agency Ponominalu over alleged drip pricing.
According to the competition regulator, Ponominalu misrepresented the price of tickets for a January show by Kasta (Каста), a popular hip-hop group, in an advertisement on Vkontakte, Russia’s Facebook equivalent.
The advert, placed in late 2018, said Kasta would play a large show in Moscow, with tickets priced at 1,500₽ (€21). However, says FAS, when the buyer reached checkout on Ponominalu.ru, the minimum price payable was 1,650₽.
“The advertisement did not contain any information about service fees and commission for purchasing tickets on the internet, and it is impossible to purchase tickets on the site [Ponominalu.ru] without paying a service fee,” reads a statement from FAS’s Moscow office.
“The advertisement did not contain any information about service fees and commission”
If found guilty, Ponominalu.ru is liable for a fine up to half a million rubles (€7,000). An initial hearing took place on 26 June.
According to Moscow Ticketing Forum MD Katerina Kirillova, promoters who consciously rely on sales through Vkontakte, Russia’s most popular social network, in 2017 sold an average 30% of their tickets through the service.
According to the International Ticketing Yearbook 2018, Ponominalu is Russia’s second larger ticket seller, after Kassim.ru, which generated revenues of 7.1bn₽ (€88m) in 2017. Ponominalu was acquired by Russia’s largest mobile network, MTS, last February.
Several other ticket sellers have been warned or sanctioned for not including the full cost in the price of tickets, including in the UK, the Netherlands and, most recently, Canada, where Ticketmaster was slapped with a $4m fine.
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Party like a Russian: Trends in ticketing
The ticketing market in Russia has largely developed according to its own rules. While the era of electronic tickets didn’t begin until the late 2000s, the sector is now in the process of rapid formation.
According to news agency Intermedia, the turnover of the market for cultural events (excluding cinema and sports) in Russia topped US$1.2 billion in 2014, and experts estimate the size of ticketing industry to be around $2bn.
At the end of March, the first conference in Russia on ticketing solutions and technologies, Moscow Ticketing Forum, was held in the Russian capital. The conference brought together around 600 key market players from Russia and beyond to discuss the state and future development of the Russian ticketing market. While delegates showed a high level of expertise, our European colleagues can learn much from the Russian approach and experience.
I believe that Russia can undoubtedly become a trendsetter in technological development in the global ticketing market and in the entertainment industry.
Our European colleagues can learn much from the Russian approach and experience
Online vs offline
By the end of 2016, 65–70% of all tickets sold in Moscow and St Petersburg were paperless. While this percentage is obviously smaller in the regions of Russia, where it averages 30%, it is expected that sales of electronic tickets will continue to increase, reaching 80% in larger cities this year.
Electronic tickets in Russia are bought mostly by millennials, with paperless sales of up to 60–70% at youth-focused concerts and events. However, a majority of ticket sales in Russia are still offline.
Monopoly vs diversification
In comparison to international ticketing markets, there is no monopoly in Russia. While CTS Eventim dominates in Europe and Ticketmaster in North America, the Russian market is more diversified. Tickets for most events are sold through several major ticket agencies, including parter.ru (Eventim’s local operation), kassir.ru, ponominalu.ru, concert.ru and many others.
In Russia, as elsewhere, each ticketing partner is allocated a quota by the event promoter, with each selling only their own quota and taking a fee on any tickets sold. This means customers visiting a ticket agency’s website can only view that seller’s inventory.
Most experts in Russia consider the ‘quota’ system of ticket distribution to be obsolete
Imagine what would happen if airline tickets were sold on a quota model. Each aggregator would show only its own limited pool of tickets – with business-class tickets available on one service, tickets in the middle of the plane on another and seats closer to the tail on a third.
This distribution model is still used in both the Russian and international markets. Most market experts in Russia, however, now consider this approach obsolete.
Trend #1: Towards a global distribution system
The answer is a ‘global distribution system’, wherein all tickets are available for purchase through all possible channels, as it is in the aviation industry.
Through global-distribution technology, it is possible for promoters to open access for all tickets to be sold by all ticket distributors. Under a global distribution system, all distributors receive equal access to the ticket database in real time.
A transition to this model is beneficial for event promoters, who can connect to as many tickets distributors as they want. It increases sales – as every customer can have access to all tickets in their budget in one convenient place – and allows promoters to accumulate data, previously held by ticket agencies, about their audience.
One such global-distribution service in Russia is Tickets Cloud, a cloud-based platform that allows promoters to connect to an unlimited number of distributors – such as ticket agencies, social media sites and artists’ fan clubs – to sell tickets around the world.
More than 30% of Russian theatres are now utilising global distribution systems, as well as several concert venues in Moscow, including YotaSpace (1,500-cap.) and Crocus City Hall (7,500-cap.)
Trend #2: Social selling
As Steve Machin, CEO of Accent Media (.tickets), said at Moscow Ticketing Forum: “The amount of tickets sold via social networks is constantly growing, and we can not deny it.”
According to local experts, promoters who consciously rely on sales through Vkontakte – a Facebook-like social network, the most popular in Russia – sell an average of 30% of their tickets through the service, and this trend is set to continue.
Trend #3: Secondary opportunities
The Russian secondary market in its current state is still unregulated and largely outside the law, with ticket brokers paying no taxes. This niche, therefore, is ripe for technological innovation, and a number of Russian start-ups are working in this direction.
Enter Eticket4 – Russia’s first online ticket marketplace. This start-up was presented in a competition for ticketing technology at Moscow Ticketing Forum and was well received by delegates.
Moscow Ticketing Forum demonstrated that ticketing industry players, both inside and outside Russia, realise the importance of new technology in not only increasing sales but developing the entire live music industry.