“A huge concern”: Live industry reacts to StubHub buy
Controversial secondary ticketing site Viagogo yesterday (25 November) acquired StubHub from eBay in a US$4.05 billion all-cash deal, returning both companies to founder Eric Baker’s hands and eliciting strong reactions across the live music industry.
The sale to Viagogo – a consequence of pressure from eBay shareholders for the company to divest itself of StubHub – followed reported interest from multiple parties, including US resale marketplace Vivid Seats, and saw the e-commerce giant receive almost 13 times its original investment.
As IQ speaks to ticketing experts and commentators, a question on the lips of many is: “Just how did Baker raise the funds for the all-cash deal?”
More technical concerns include what the deal means for the future of the secondary ticketing market; how it may be used to “detoxify” Viagogo’s brand – or not; how regulators will react to the deal; and how much more likely are consumers to get ripped off.
Adam Webb, campaign manager, FanFair Alliance
“This feels like a desperate move from both parties.
“However, news of this acquisition should be a major concern for both audiences and music businesses – especially if Viagogo, a company that recently had a court order hanging over its head and is still the subject of a CMA investigation, uses this process as an attempt to detoxify its brand.
“FanFair will be writing to UK regulators and politicians and we reiterate our advice to music fans to avoid these sites.”
Katie O’Leary, campaign lead, Feat (Face-value European Alliance for Ticketing)
“It’s alarming to think of Viagogo potentially gaining an even greater stronghold in the secondary ticketing market, given it’s been the subject of various legal actions across Europe and banned from advertising on Google globally. (Google last lifted Viagogo’s ban on advertising. For more information, click here.)
“Viagogo claims this will create a ‘win-win for fans’, but further consolidation in the secondary ticketing market would most likely restrict competition, and further negatively impact fans.
“We hope that regulators will have consumers’ best interests at heart when considering this deal, and consider not only the question of Viagogo’s increased dominance but also whether they can be considered a fit and proper owner.”
“We hope that regulators will have consumers’ best interests at heart, and consider whether Viagogo can be considered a fit and proper owner”
Anton Lockwood, director of live, DHP Family
“Coupled with the disturbing news that Google is allowing Viagogo to advertise again, we see this as a step backwards in the fight against inflated price secondary ticketing, Viagogo’s brand has become toxic in the last few years and this seems like an attempt to cleanse it.
“At DHP we stand strongly against unscrupulous traders selling tickets at inflated prices, at the expense of genuine fans – this acquisition can only serve to further that, and we urge the regulators to look very closely at what the new company does.
“We always advise buying tickets from primary vendors or face value secondary vendors who are members of Star to obtain genuine tickets, at the correct price with consumer protection in place.”
Neo Sala, founder and CEO, Doctor Music Concerts
“Viagogo may hope that their reputation will be greenwashed through association with Stubhub, who have historically kept more in line with regulation — but both have a long history of ripping off fans.
“I have no doubt that if this gets cleared it will be bad news for fans, as well as those of us who invest in the live sector. Coupled with the news from Google, it’s really concerning to see things take such a backwards step.”
“At DHP we stand strongly against unscrupulous traders selling tickets at inflated prices, at the expense of genuine fans”
Claudio Trotta, founder, Barley Arts
“In my more than 40 years in the business, this is one of the worst pieces of news I have received.
“It is really scary – first of all, the fact that Viagogo can spend $4 billion in cash is very worrying. Secondly, that Viagogo has bought a competitor that operates in most countries in the world means we are really far away from winning the battle against this cancer – and I do truly believe it is a cancer. I am sure they have made this deal because they absolutely know they can carry on doing secondary ticketing in the majority of countries in the world and circumvent the laws that are in place.
“This is very bad for the future of industry – for music, for punters, and for overall quality. Music is in danger of becoming only for rich people and for fanatics – the only people capable of paying inflated secondary prices.
“We need to do something against this, otherwise live music will be dead in the way we know it. With these prices, there would be no new acts either, which means no more future.
“In Italy, there is a law against secondary ticketing, and also a law on nominative tickets. I am the only one of the major Italian promoters in favour of this law. I think the future is to have complete digitalisation of tickets, and for each to have a unique code. This is the only way to fight secondary ticketing.”
“In my more than 40 years in the business, this is one of the worst pieces of news I have received”
Dave Newton, ticketing professional
“In North America the deal will make no noticeable change as StubHub already dominates the resale market along with having an appreciable share of the primary market (especially in the sports sector) and Viagogo has no presence there.
“But in Europe, Australia, New Zealand and elsewhere, we may see the increasingly toxic Viagogo brand put out to pasture as its market share is folded into the now-established StubHub brand in each of these territories.
“There is a scenario whereby the Viagogo brand is kept alive for a while as a way of deflecting anti-tout activity and attention from StubHub which has been generally been regarded as ‘the best of a bad bunch’ over the last five years. Viagogo could soak up the emotional ire of the media, customers and the events industry while StubHub quietly holds onto its more collaborative and conciliatory reputation.
“Could we see primary ticketing agencies launching resale platforms in Europe if StubHub succeeds in becoming the acceptable face for touting? There may also now be room for significantly-funded new entrants into the space.
“And where does this leave the ticket-buying fan? No less ripped-off, that’s for sure.”
“We may see the increasingly toxic Viagogo brand put out to pasture as its market share is folded into the now-established Stubhub brand”
Annabella Coldrick, CEO, MMF (Music Managers’ Forum)
“On the back of the FanFair Alliance campaign, we’ve seen huge steps to reform the UK’s secondary ticketing market and put a stop to the rip-off, anti-fan practices of sites like Viagogo. For that reason, the announcement is a huge concern.
“The consolidation of the biggest remaining platforms for ticket touts could potentially reverse progress and cause untold harm for audiences and artists alike.”
Rob Wilmshurst, CEO, See Tickets
“I had to check my calendar to make sure it was not April Fools’ Day. I am very, very surprised, not just at the scale of the deal but at where the cash might have come from.
“I am no fan of ticket touting so I can’t say it made my day but it is what it is. In any case, I congratulate Eric for pulling it off.”
Richard Davies, CEO, Twickets
“This is further terrible news for ticketing as two deceitful operators combine forces in order to further turn the screw on the consumer. It demonstrates the need more than ever for a specialist face value resale service that properly serves genuine fans.”
“The consolidation of the biggest remaining platforms for ticket touts could cause untold harm for audiences and artists alike”
Maarten Bloemers, CEO, Guts Tickets
“In five years I expect this to be deemed a total waste of money. It’s a joining of forces of two eerily similar entities companies, the main similarity being that they do not care in the slightest about the consumer they are supposedly serving.
“Technological innovation is making these businesses obsolete, and will put the priority back with the consumer, where it belongs.
Jonathan Brown, chief executive, Star (The Society of Ticket Agents and Retailers)
“We note with interest the news that Viagogo has bought StubHub and will continue to watch developments closely.
“Customers need to know where they can buy tickets reliably from authorised sources and the best way of doing this is to always buy from Star members who have signed up to our code of practice and approved dispute resolution service.”
Adam French, consumer rights expert, Which?
“Viagogo has a long history of ripping off music and sports fans and had to be threatened with court action after failing to provide vital information to customers, so any move to increase its grip on the secondary ticketing sector is likely to be a worry for consumers.
“The regulator should closely examine this deal and the impact it could have on competition in the sector to ensure consumers do not lose out.”
This article will be updated with more reactions as IQ receives them.
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Collaboration, cooperation and the future of ticketing
Monday’s news that Ticketmaster is shutting its secondary ticketing sites, Get Me In! and Seatwave, has received an almost universally rapturous response from the UK live music industry (Rob Davies’s reservations in the Guardian duly noted) – which, to me, just highlights the ridiculous situation the industry allowed itself to get into over the last ten years, through intransigence and an aversion to cooperation and collaboration.
Without writing the complete history of this sorry state of affairs, let’s rewind to the DCMS’s decision not to legislate against above-face value resale back in 2007, when the live music industry was told, in summary, that there was no appetite for legislating against the free-market activities of all those that engaged in touting, and therefore the industry should go and sort out its own problems (cf. conclusions and recommendations from p38 of this document).
At that time in the UK, we had three established touting sites – this was before the successful rebranding of ‘touting’ as ‘secondary ticketing’ – Viagogo, Get Me In! and Seatwave.
What happened next?
One of the first things was that Ticketmaster bought Get Me in! – the first blatant example of the “can’t beat ’em, join ’em” trend that many in the industry subsequently adopted.
This was followed by the Music Managers Forum (yes, those wonderful people who have now been a significant force in turning the tide on this issue) launching the Resale Rights Society, whose aim was “to ensure that artists and the live music industry share in the proceeds of resold tickets” by endorsing ‘kitemarked’ secondary sites in return for a cut of the resale profits. WTF!
The Concert Promoters Association also got in on the act by launching their own secondary platform, OfficialBoxOffice.com, built and powered by See Tickets.
There was even a certain booking agency stalwart who, having railed against the secondary market at successive ILMCs, then was found lurking on the other side of the fence as an ‘ambassador’ for Viagogo.
These actions all contributed significantly to the sorry state of the live music market that, in February 2012, was so brilliantly exposed in Channel 4 Dispatches programme, with the finger being pointed at artists and promoters who were supplying primary inventory directly to the secondary platforms.
Then eBay brought over their StubHub platform from the US, and Ticketmaster bought Seatwave, giving us the ‘big four’.
The industry allowed itself to get into a ridiculous situation, through intransigence and an aversion to cooperation and collaboration
So how did the tide then turn?
A number of things happened around the same time, many inspired by ticket buyers who were pissed off at being ripped off. Who’d have thought? Certainly not Carl Leighton-Pope, who said at a Music Tank debate, “Now that secondary ticketing is here we have to embrace it. Nobody is going to be able to do anything about it, especially if the public wants it.”
Sharon Hodgson MP initiated a private member’s bill to introduce legislation capping resale at 10% above face value. The bill was voted down, but it did start a parliamentary process that then gave consumers (including consumer associations, such as Which?) and those in the live events industry who refused to be tempted into the dark side (stand up, Stuart Galbraith) something to build a campaign around.
Sharon herself was a pissed-off customer, having been ripped off trying to buy Take That tickets for her daughter.
This trend for pissed-off consumers taking direct action continued with Marie Goldman channelling her frustrations at her father being a victim of a duplicate (ie fraudulent) resale into developing the Piktical platform, which enables the whole ticketing industry to centrally control the distribution and redistribution of tickets, locked down by facial recognition.
And, more visibly, Claire Turnham’s Victim of Viagogo campaign, which was born out of the manipulation she suffered at the hands of Viagogo when buying Ed Sheeran tickets as a birthday present for her son. To date, the campaign has been responsible for more than £750,000 in refunds being returned into the hands of ticket buyers.
In the midst of all this, Twickets was launched from within a music industry base as a true fan-to-fan resale platform, with no tickets able to be resold above their original face value. (A heads-up at this point to the original fan-to-fan resale service, Scarlet Mist, which has been running largely unnoticed in the background for years. The solution to the problem was already there back in 2007, if the industry had only collaborated and collectively decided that it wanted to put its customers first.)
The increase in noise from the public, coupled with a momentum in the print, online and TV coverage, gave confidence to those artists big enough and principled enough (stand up, Adele, Ed Sheeran, Arctic Monkeys, Catfish and the Bottlemen, Noel Gallagher and others) to voice their opinions and to express their anger and frustration at their own fans getting ripped off.
Social media played a big part, too, as artists are now exposed to the voices of their audience directly (especially through Twitter) and want to know what their team (manager, agent, promoter) are doing about it.
The artists’ voices were channelled through the MMF, who leapt back over from the dark side into the light and launched FanFair Alliance (FFA), headed up by the tireless campaign manager Adam Webb.
Promoters weren’t prepared to allow customers to return tickets for a show – the sentiment being, “tough; it’s their fault they can’t make the show, not mine”
This was the key cog in the machinery, as it gave everyone in the live events industry in the UK something to aggregate around. FFA supported Victim of Viagogo, liaised with the long-established All-Party Parliamentary Group on Ticket Abuse, fed the media and strategised with artists, managers and promoters, steadily building a rounded campaign whereby legislation, enforcement, education and pressure brought us to the point this week where Ticketmaster have announced: “That’s right, we’ve listened and we hear you: secondary sites just don’t cut it anymore and you’re tired of seeing others snap up tickets just to resell for a profit.”
Ticketmaster has made a pragmatic decision to protect their core primary business, as their focus (and the focus of nearly all ticket companies in the UK) is the entity that controls the inventory – whether that be the artist, the promoter or the venue.
Over the last 18 months, we have seen Viagogo lead their business in the UK to the edge of the legislative cliff, refusing to engage with parliamentarians, National Trading Standards or the Competition and Markets Authority. It can only be a matter of months before Viagogo is forcibly shut down – or they do another disappearing act under the cover of darkness, as they did when the RFU won their legal action against them a few years back and they fled overnight to Switzerland?
(It’s just a hunch, but Viagogo was set up by Eric Baker after he sold StubHub to eBay just over ten years ago. Could it be that the non-compete clause has run its course and very soon we’ll see Eric Baker back in the US with a new secondary ticketing incarnation, competing there with his former company?)
Over the same 18-month period, artists and their managers have put Ticketmaster on the spot by requesting, on a show-by-show basis, that they refuse to allow listing of certain shows on their two resale sites – the unspoken threat being that Ticketmaster would miss out on any primary inventory otherwise.
Ticketmaster never had a strategy to develop a secondary ticketing service – it acquired two players already in the market as a way of sharing in a pie that looked like it was just going to grow and grow with, at the time, seemingly no appetite within the industry or government to stop it.
Now the tide has turned, Ticketmaster (UK) are wisely repositioning themselves as a primary ticketing agency, and have flipped their existing resale platforms into providing fan-to-fan resale functionality for the main service.
In 2006, I specced out a return-and-resale module for WeGotTickets, as it had become a frequent request from customers who were no longer able to make a show. The module never got developed, largely because of the resistance we met from promoters. They weren’t prepared to allow customers to return tickets for a show that wasn’t completely sold out – the sentiment being, “tough; it’s their fault they can’t make the show, not mine”.
I understood this at the time but with hindsight it seems so short-sighted and insular. I wonder what would have happened if, at that time, all the ticket companies had developed such functionality (props to Skiddle for being the first, I believe, to actually go live) and we had evolved the UK ticketing industry into a position whereby the customer was clearly the priority. For everyone.
It is not enough to just pay lip service to the mantra of “putting the customer first”
There is an inherent contradiction in the way the ticketing industry works these days, in that the ticket companies focus almost all their energies and resources exclusively on their clients (those that control the inventory) – yet it is the ticket buyer that is charged for that service in the form of the booking fees, services charges, delivery charges, transaction charges, etc.
The booking fees that the customers pay are artificially (and ridiculously) high because the ticket companies offer the inventory controllers an inducement in the form of a kickback/rebate on every ticket sold, which can be as much as 50% of the total booking fee.
If we really are “doing it for the kids” (stand up, Alan McGee), then the service that is being provided by the ticket companies to the inventory controllers should be charged to those controllers and wrapped up in the ‘face value’ of the ticket. Certain delivery options could then incur an additional cost per order, but everything else should be an inside charge – a ‘show cost’, if you like.
One thing this whole debacle has shown me is that it is not enough to just pay lip service to the mantra of “putting the customer first”. Customers know a raw deal when they get one and sometimes they’re motivated to do something about it!
What needs to happen next is for the live events industry in general (and the ticket companies in particular) to come together to work out how to control the sale and resale of tickets in a way that is compatible with how the artists want their fans to be served.
I would propose that this would be through a central ticket repository system that all ticket companies are hooked into, where the issuing, transferring and redeeming of tickets is able to be controlled to the specifications of each live music event’s stakeholders – artist, manager, agent, promoter and venue. Blockchain technology may provide the appropriate backbone to such a system, but we need to be more open-minded than that so that we collaborate and cooperate to design the optimal solution before deciding on the technology upon which it’s built.
We could learn an awful lot from both the airline industry and the banking sector in this respect. I’ve said it many times before, but what allows me to take cash out of my Lloyds account from a NatWest ATM?
Collaboration across the sector, coupled with a desire to provide the best possible service for its customers.
WeGotTickets founder Dave Newton is currently advising on a number of projects in the ticketing and live music space, having resigned as a director of WeGotTickets last October. He can be reached on LinkedIn.
Dave Newton leaves WeGotTickets
Dave Newton, co-founder and long-serving director of pioneering UK online ticket seller WeGotTickets, has left the company after 17 years, IQ has learnt.
Newton (pictured) resigned as a director in October 2017, just shy of 18 months after fellow co-founder Andy Clyde. The two started the platform that became WeGotTickets in 2000 as an extension of their online record shop, Oxford Music Net, and spun it off as a separate company two years later.
The company was among the first in the UK to issue electronic tickets via email.
IQ understands Newton’s departure came amid a round of redundancies for the company, which sells a million tickets a year on behalf of its 10,000+ venue and promoter partners.
A WeGotTickets spokesperson says: “While Dave’s day-to-day involvement is coming to an end, he will maintain a keen interest in our continued success as one of our supportive shareholders. We wish him all the best for his next project.”
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Indie50: Nominate the unsung heroes of the UK live music scene
Nominations are now open for Indie50, WeGotTickets’ celebration of the “unsung heroes of the UK’s independent music scene”.
“Whether a promoter, manager, booker, sound engineer, journalist or even the door person at your local venue, we want to shine a light on the people who work tirelessly towards advancing the UK’s indie live scene and help to make it one of the most fertile in the world,” explains the e-ticketing platform.
After the nomination period, which closes on 31 May, submissions will be turned over to a judging panel comprising Tom Ravenscroft (BBC 6 Music), Laura Snapes (Pitchfork, The Guardian), Jason Edwards (Coda Music Agency), Kevin Moore (director of The Great Escape), Stephen Bass (owner of Moshi Moshi Records) and WeGotTickets founder Dave Newton, who will collectively decide the final 50, to be announced in August 2016.
Know someone who should appear in the inaugural Indie50? Nominate them at the WeGotTickets website.