Ticketmaster denies resale site has easy ticket access

Updated Fri. Jan. 2 2009 1:06 PM ET

The Canadian Press

TORONTO -- Ticketmaster says it is providing consumers with better protection through its resale site TicketsNow, which offers concert tickets at many times their face value, but consumer advocates say such a setup should be illegal.

People who log on to Ticketmaster's website looking to buy tickets for concerts, plays, sports or other special events often find themselves automatically redirected to TicketsNow - which Ticketmaster purchased in Feb. 2008 for US$265 million - just minutes after the tickets go on sale.

"It seems to people it's instantaneous and they've never had a fair shot," said Ticketmaster vice-president Joe Freeman, who noted tickets for high-demand events can sell at up to 14,000 per minute.

"It's as fair a system as we've been able to come up with short of having people wait around the block in the freezing cold, as used to happen in the good old days."

The Consumers' Association of Canada said it has received many complaints from buyers who don't like being directed to a resale site owned by Ticketmaster that charges much higher prices for the same tickets they couldn't buy through Ticketmaster's own system.

"It's a conflict, it's a monopoly, it's unconscionable," said association vice-president Mel Fruitman. "It may not be illegal, but it sure is immoral and unethical as far as I'm concerned."

Freeman insisted that Ticketmaster does not hold back tickets for TicketsNow, nor does the resale site get special access to tickets. He said the resale site is available to any broker or individual who wants to sell tickets.

"We are giving absolutely no preferential access to ticket brokers or anyone affiliated with TicketsNow to get tickets," he said. "We're not diverting tickets to TicketsNow."

Ticketmaster does get a slice of the increased price from tickets sold on TicketsNow, in effect giving the company two sets of service charges from each ticket sold and then resold.

"That's a fair statement," Freeman said. "It's accurate, but it's apples and oranges, because the service charge off the initial sale is almost always shared with the venue, the promoter or the team."

The consumers association complained that Ticketmaster even charges customers to print a ticket on top of its service charge for the same ticket.

"You pay for them not paying to print the tickets," Fruitman said. "They don't have to incur a printing cost, and I've got to pay for that?"

Fruitman also said Ticketmaster's near monopoly on tickets sold at most major venues in Canada and the United States may be broken next year as contracts come up for renewal, with promoter Live Nation already announcing plans to sever its relationship with Ticketmaster in 2009.

Ticketmaster received complaints after an AC/DC show in Vancouver sold out in minutes, only for tickets to be quickly available for higher prices on TicketsNow. The resale site also charged up to $1,199 for a $44 face-value ticket to a recent Killers concert in Toronto - roughly a 2,500 per cent markup.

Tickets for many events are rarely priced at their full market value, said Freeman, who noted many people are used to buying tickets at higher prices from scalpers on the street without any guarantees they aren't counterfeit.

"If you're buying a ticket from a guy under the overpass by the Air Canada Centre, you don't know if those are going to be valid tickets until you're in the door," Freeman said.

"We're trying to bring a much higher level of consumer protection to the whole resale space."

The Canadian Press was shunted back and forth between three Ontario ministries as it tried to learn if Ticketmaster's ownership of TicketsNow violated the province's law against reselling tickets above face value, and was eventually told complaints should be taken to police.

"If there are those who are concerned about it, or have identified some issues, they should refer them to the police so they can investigate," said Attorney General Chris Bentley.

"I'll certainly make sure that my colleague Minister Takhar knows about it as a consumer protection issue that I'm sure he'll want to take a look at."

However, the office of Small Business and Entrepreneurship Minister Harinder Takhar referred calls about TicketsNow to the Ministry of Government and Consumer Services, which promptly redirected calls to the attorney general.

Toronto police say they have received no complaints about Ticketmaster's ownership of TicketsNow.

Freeman said even though Ticketmaster is confident it does not violate the resale law, the company believes the law is outdated and doesn't reflect the realities of the Internet age or the law of supply and demand.

"You and I both know there is a thriving ticket-broker industry ... so the law is really a fiction," he said.

"We very strongly feel the law needs to be modernized to reflect the reality of Internet commerce. By keeping a price cap in place, you're really just driving the (resale) business into the shadows."

Bottom line is, whoever can pay the most should be able to see the show.

The people support these pirates by paying them what they want.

I'm not seeing the big deal either, honestly. People reprice their own shit all the time, this just happens to be a rather stark example. How much is too much? Bottom line to me is that people should have the right to put any price they want on their own property.

Furthermore, TicketMaster does not OWN the tickets, so your example is not accurate. It does own the tickets once it transfers them to TicketsNow (I assume).

Ticketmaster is marking up its own product. Key word: "ITS".

Is TicketMaster actually just sending the tickets to TicketsNow themselves?

No.

Otherwise Ticketmaster could simply contract with the concert to sell tickets at a higher price. Or to withhold X% of tickets for a higher price. Or have a huuuuuuge price disparity ...the list goes on.

Instead it is selling tickets to a company it also owns (but is a SEPERATE company for specific reasons...like not having to give ANY of that mark up profit to ANYONE else!) and then selling them for a much higher price.

The big problem with it is, while one can claim it's a completely seperate company and there's absolutely no collusion, and the OTHER company obtains it's tickets just as if they had no connection....it's automatically bullshit. Even assuming that's true, they still have advantages that they wouldn't have if there was no relationship. Here's a basic one...do they share software? Do they know EXACTLY how ticketmaster sells it's product giving them an advantage in buying them out? Does ticketmaster give prefered access to their servers, whereas YOU get locked out trying to buy the ticket because 943594 other people are hammering the site.

Trying to simplify this.

Let's say I'm the government.
I exclusively hire Joe to find a contractor to build me roads.
I pay Joe a flat fee to find me contractors to build roads.
Joe realizes some contractors make very good money.
So, Joe creates his own contracting firm and hires it.

Is that legal? Is that moral? I don't know, but at a bare minimum it stinks of a conflict of interest. That is basically what is happening with TicketMaster/TicketsNow.

Furthermore, TicketMaster has access to data that competing scalpers do not, so it has a distinct, monopoly related advantage over the competition by colluding with TicketsNow.

That's the problem.

And Venen you may not see a problem with it, but do you at least understand the analogies being used and see where people are saying the problem exists? I mean if it's a difference of opinion that's cool, but I had the feeling I wasn't explaining WHY it's an issue and that's where I was losing you.

Let's say I'm the government.
I exclusively hire Joe to find a contractor to build me roads.
I pay Joe a flat fee to find me contractors to build roads.
Joe realizes some contractors make very good money.
So, Joe creates his own contracting firm and hires it.

If you want to see a concert, you have no choice but to purchase ticketmaster tickets.

So you justify the market that people are willing to pay $2500 to see a show that its fair markup?

How about if there was only one refinery in north america, and they decided to charge $25 bucks a gallon for gasoline, people will pay it, there is nothing else that will work in your car to run it, so what choice do you have.

Looking at that analogy... I honestly cannot say I see a problem with that one, either. Joe is performing something that anyone could really do. I guess my question with regard to the analogy is: Did Joe cut the original person hiring him off? If not, he is merely doing some business on the side and keeping within the terms of his original deal with the person hiring him to seek out contractors.

I would relate it more to something akin to: John gets hired to mine crystal deposits in a cave somewhere. He's getting paid 100k(whatever, just make up a number)/year to mine it up. But, John intelligently realizes that the crystals he's mining up and chucking over to his employer are worth 5 million over the span of a year. He therefore realizes he's ripping himself off, and decides to mine some of his own on the side.

Is that even what's happening though? It seems like everyone is just ASSUMING that TicketMaster is taking all the tickets themselves and listing them on TicketsNow themselves.

Your example is still a fairly obvious conflict of interest and if John's employer knew he was doing it, he would be fired. If you can't understand that, we really have nothing to discuss.

The band said it had received assurances from Ticketmaster that it will stop redirecting Springsteen fans to TicketsNow.

Ticketmaster even charges customers to print a ticket on top of its service charge for the same ticket.