VIP-News Premium - Vol. 145 March 2012

VIPNEWS PREMIUM > VOLUME 145 > MARCH 2012

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VIPNEWS > MARCH 2012

It’s getting busy again – in fact I’m so busy

I haven’t mentioned seagulls for ages – has

anybody noticed? Hands up – oh, a few of

you then…and just as I mention this, Shitty ,

the most cross eyed seagull in Brighton

landed on the flat roof and toppled sideways

trying to hold one wing straight up – insolent

bird! Anyway, now that’s out of my system

– busy! – yes, what with a very full on ILMC

last weekend, and preparations for Canadian

Music Week in Toronto next week – March

21, then Tallinn Music Week at the end of

the month, it’s a wonder that the News

gets done at all! But what would you all do

without it? – Don’t answer that!

This year’s 24th edition of the International

Live Music Conference (ILMC) sold out in

advance again with a thousand live music

industry delegates from 61 countries

descending on London’s Royal Garden Hotel

to put the business to rights and to enjoy

themselves. Some, especially those that took

part in the football, at Wembley Stadium no

less (!), returned home a little bruised and

battered; the image of our very own Peter

Briggs, hopping around painfully on one leg,

whilst declaring that playing on the hallowed

turf was the best thing he’d ever done, will

stick in my mind for some time! What was

that? Oh, he tore his calf muscle – thanks for

asking, he’ll be all right in a couple of weeks.

My experience, and this same view was

confirmed by others, was that this year’s

ILMC (see report in this issue) had even more

of an international feel to it, with a wider

range of people involved in the meetings ,

and a lot of newer delegates standing up to

speak their piece – a very good thing! Both

the Emerging Markets session and a Market

Focus on China highlighted how things have

progressed in many of the international

markets , and even how live music has

been and is still applied to the process of

advocating peaceful communication in areas

recovering from and in some cases currently

beset by political and social unrest.

Of course we all know that the gathering

together of people to enjoy live music , as

evidenced by events like Live Aid, can produce

remarkably beneficial social effects . But it only

really struck me last week whilst attending a

Green Events and Innovations Conference

which involved Greener Festivals and the

AIF event at London’ s Royal Festival Hall last

week, - and I suppose I should have realised

this before - that so much can be learned

from the efficient and environmentally

effective people and resources management

of large scale festival events which can then

be applied to the better handling of large

gatherings of displaced people following

natural disasters and the effects of war and

political unrest. One speaker from the floor

in panel called, ‘Water – The Stuff of Life,

mentioned working in camps set up for

‘displaced people’ in Haiti really brought it

home to me.

Another aspect which became clear in that

session was I hadn’t really considered, and

which highlights climate change, was that

we are now, this early in the year, officially

affected by drought in SE England, usually

apart from the watering of lawns, this is not

usually a pressing problem, but it certainly

is another weather problem which festival

organisers will have to take into account.

So – I’m off to find thermal underwear as

I’m told that it can drop to minus twenty

in Toronto during Canadian Music Week, in

the meantime – Ladies and Gentlemen – the

News…

COLOPHON >

VIP-News is published by:VIP-Booking145-157 St John StreetLondon Ec1V 4PW

Managing Director:Ronni [email protected]

General Manager:Peter [email protected]

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McGowan’s Musings

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Green Events & Innovations ConferenceAllan McGowan [email protected]

In the last couple of years attendance at the

International Live Music Conference (ILMC

24) has risen dramatically and according

to the organisers this year’s edition, again

held at London’s Royal Garden Hotel, looks

set to follow that trend which will mean

capping the numbers at a thousand plus and

disappointing some would be delegates. This

major live music industry event will take place

on 9th – 11th March.

For the second time the ILMC will commence

with “The Open Forum” with Greg Parmley

welcoming guests, Emma Banks (CAA), John

Reid (Live Nation), Wayne Forte (Entourage

Talent, US) and Scott Rodger, manager of

Arcade Fire, to review the past year and to

project on the fortunes of the live industry in

the coming months. The session is modelled

on the famous UK TV humorous quiz show

“Have I Got News For You”.

This year’s agenda will feature a look at

the Chinese Market, and the The Emerging

Markets ’ Place will compare the development

of the Eastern European Market with other

territories around the world. Also following

the major problems caused at various outdoo r

events around the world last year two regular

ILMC sessions The Booking Ring and The

Festival Forum will merge, to discuss the

production and promoter reactions to these

catastrophes.

The ILMC is well known for breaking news

and revealing opinions that directly influence

the development of the live industry, VIP

News will attend and report back.

More Details: www.ilmc.com

Ben Challis

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Anzeige_VIPMag_ProSky_X4.pdf 1 09.12.10 10:43

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First Venue to Come into Your Head

02 London, UK

Services Above and Beyond

Eat To The Beat

Most ProfessionalProfessional

Martin Goebbels

Liggers Favourite Festival

Glastonbury

Plumber of the Year

Andy Franks

Best in Show

Cirque De Soleil: Alegria

Least Painful Tour

Roger Waters

The People’s Assistant

Sandra McCarthy– Live Nation

Second Least Offensive Agent

John Giddings

The Promoters Promoter

Barry Marshall

New Boss

Martin Nielsen(Live Nation Norway)

The Bottle Award

Willie Robertson


ILMC 24Allan McGowan [email protected]

The 24th edition of the ILMC again sold

out in advance, attracting more than 1000

people and reaffirming the first word of the

event’s official title, International Live Music

Conference with attendance from no less

than 61 countries gathering to discuss all

aspects of the current state of the world’s live

music industry in the conference rooms, bars

and corridors of the Royal Garden Hotel in

London.

ILMC Founder, Martin Hopewell gave VIP

News his view of this year’s edition:

“Although it’s probably true that I probably

only ever get to hear the positive feedback,

the general feeling I picked up was that ILMC

24 was one of the best meetings - if not the

best - that we’ve had so far. Certainly I was

struck by the energy this year - from the rapid

pace of the registrations to the speed with

which the session rooms filled up. Everyone

seemed to be up for it. And there was a real

‘family’ feeling too - something of a return to

the meetings of the earliest years. Its always

been true that the discussion topics are at

the heart of the ILMC, and this year was no

different with high levels of participation and

information and an even greater spirit of

openness - but this year reminded me that

ILMC was also important as a place to make

and renew friendships, and how much it has

even become a part of some people’s lives. It

certainly gave me personally a much-needed

shot in the arm to keep going with what I’ve

begun to call my ‘bastard child’, and plans

for our big 25th anniversary edition are al-

ready well under way...”

Alongside the serious consideration of

matters ranging from secondary ticketing

– a burning topic rekindled by a recent UK

Channel 4 documentary (see report in this

issue), to new technologies, emerged and

emerging markets, event safety, venues,

contracts etc, etc, ILMC, notwithstanding its

post-apocalyptic theme, always has it’s lighter

moments and a full social agenda, including

football at Wembley Stadium. Certain ILMC

delegates have played on this hallowed

turf more often than most professional and

international players!

One event which started off as a light

hearted dig at the presentation of Awards –

The Arthurs, has found itself being taken very

seriously by both the winners and music and

in many cases daily international press. This

year’s winners were as follows:

Martin Hopewell

Thisyear’swinners

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ILMC 24– The Conversion ProceedsManfred Tari [email protected]

Over the past three years or so the visitor

profile of the annual live music business

gathering at the Royal Garden Hotel in London

seems to be gradually changing. The ILMC is

getting younger while getting older. The rising

number of new delegates, from different

territories and new concert companies is

naturally stimulating the rejuvenation of this

industry event.

The ILMC 24 had its usual classic conference

themes which were once again informative.

However, while some conference topics in the

past in particular have been controversially

or even emotionally discussed, The ILMC 24

showed that some subjects were handled in

a more factual manner instead of through

the grand drama discussions that previously

entertained and impressed delegates as

industry heavyweights argued passionately in

order to get their point of views across.

Good examples of these were ‘The Booking

Ring’ chaired by Marc Lambelet from Black

Lamb, and the Tech Panel chaired by Ben

Challis from Charming Music and Steve

Machin from Stormcrowd. Many panels

are getting more comprehensive, while still

delivering facts or news that retain The ILMC

as what it’s known for, one of the two most

important live music conferences in Europe.

Yes Eurosonic is the other one and the main

difference between The ILMC and Eurosonic

Noorderslag is that The ILMC attracts global

players from the live music industry’s premier

league, while Eurosonic Noorderslag is a

hotspot for European festivals, agencies and

promoters.

Yes, The ILMC also has its own very valuable

share of upcoming European music industry

top shots and high potentials, but it is also

a conference for the establishment of the

concert business overseas and the rest of the

world. The ILMC has its own identity with a

more intimate peer to peer character than

most other music conferences in Europe .

While this issue is packed with articles

referring to the subject of secondary ticketing ,

it was almost surprising to see that this topic

played a less vital role than in previous years

even though The Great Ticket Swindle or

Secondary Ticketing was covered to some

degree in the opening session and popped up

here and there during the conference.

The ILMC 24 had other more relevant

subjects on its conference agenda as the

topic of secondary ticketing has already

been intensively covered in previous

years. However , The Sunday Supplement,

taking place on Sunday at 12.30 and a regular

ILMC session chaired by Allan Mc-Editor in

Chief-Gowan inevitably got to the subject.

Described as ‘intimate’ and usually attracting

only 25 people or so, The Sunday Supplement

is often one of the more active sessions of the

weekend, being run in round table fashion

and usually involving everyone in the room

in active discussion on topics that are often

not chosen until everyone is in the room. The

idea is to elaborate on discussions from the

previous days’ agenda and to pick up on topics

that may have been overlooked. This year, not

surprisingly, considering the recent impact of

the Channel 4 Dispatches TV documentary on

secondary ticketing (see report in this issue) ,

kicked off and remained on the subject of

ticketing . A lively debate followed involving

panelists and as ever all in the room. There

was even a positive ongoing outcome of sorts

to the dealing with this thorny subject as Steve

Machin of Storm Crowd suggested a possible

security initiative for ticketing, which is being

pursued at the moment by Steve and Andy

Lenthall of the PSA - watch this space!

With this in mind, VIP-News will deliver in its

next issue a proper report on The ILMC 24,

covering more of the panels.

Delegates at ILMC played football at Wembley, two of the players were Dick Molenaar and Claudio Trotta


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Sale of HMV Live /Mama Group Enters Second StageAllan McGowan [email protected]

Following the early March deadline for bids for the live business

interests of HMV, the company is considering offers for its 13 music

venues, including major London music landmarks the Hammersmith

Apollo, and the Forum, along with its five festivals, put up for sale in a

‘strategic review’ of its live business, which it acquired from the Mama

Group in 2010.

According to The Independent music business players and private

equity outfits have expressed interest, and first round bidders were AEG

Live, the Live Nation backed Academy Music Group and equity types

and Time Out backers Oakley Capital.

HMV hired advisers at Citi to put the live music sector on sale in order to

help deal with its up to £180 million debts. First-round bids were made

by March 2. It is surmised that offers may only be in the region of £64

million, the sum HMV originally paid for the Mama Group.

Mama’s festivals and artist management businesses and marketing

partnership may not be wanted by AEG or the eventual buyer and it is

thought that MAMA co-founder Dean James is leading a consortium to

buy those parts of the firm that are not wanted.

The Academy Music Group already operates three major music venues

in London along with the operations of its main shareholder Live Nation ,

so an AGM bid could be subject to competition regulator approval . This

could be a slight case of musical chairs as MAMA acquired the Apollo in

the first place when Live Nation was forced to sell to obtain competition

regulator approval for buy into AMG.

CBGB Festival PlannedAllan McGowan [email protected]

Reports indicate that the legendary and now sadly defunct venue

CBGB in New York looks set to be reincarnated as a festival planned for

4-8 July in New York. Following the closure in 2006, the CBGB name

reappeared as a short-lived fashion store and an iheartradio channel. It

was also the subject of a legal battle amongst members of founder Hilly

Kristal’s family for ownership

The festival is apparently intended to feature film and conference

strands as well as music, although no line-up has been announced.

More information at www.cbgb.com

Hammersmith Apollo is up for sale

CGBG – New York

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INDEPTHThis month’s feature deals with the furore resulting from the Channel 4 Dispatches

programme on secondary ticketing aired late last month. Our report presents some different

viewpoints on one of the industry’s most emotive topics. It seemed, not very long ago that

the practice of secondary ticketing had passed into acceptance, with associations like the CPA

and others adopting a ‘if you can’t beat them join them’ attitude’. However the programme

has had great effect in the UK and elsewhere, and the argument for and against is firmly

back on many agendas !

The Great Ticket Swindle Manfred Tari [email protected]

The ‘unfiltered truth’ about “highly, highly immoral” business

methods at Viagogo & Co:

It was a didactic masterpiece of the very few recent journalistic

reports on questionable business practises in the music industry. On

February 23, the TV Station Channel 4 aired an insider report about

the business methods of Viagogo and Seatwave in the UK. The report

was made for the investigative magazine series Dispatches, and was

entitled the ‘Great Ticket Swindle’. The TV-report revealed in an

uncompromising manner, just how these prominent secondary ticket

exchanges run their businesses.

Over the years secondary ticketing has become a business model

attracting more than touts alone. In fact four years ago especially in

the UK there were already massive protests against secondary ticketing

and its main players. There have been political initiatives to ban

secondary ticketing, but the majority of UK politicians and officials in

governmental institutions rather decided not to interfere or to

regulate a market that in the past may have be named as the black

market.

For instance, in April 2008 the Department for Culture, Sports and

Media (DCMS) published a report entitled, ‘Government Response

to the Culture, Media and Sport Select Committee Report on Ticket

Touting (HC 202 – Second Report of Session 2007-08)’ concluding,

alongside other findings that: “The Government does not see a case

for any general restriction of ticket resale.”

Thus Governmentally supported, the secondary ticketing market

in the meantime experienced a boom. Over the years the more

concerned and active opponents of secondary ticketing in the UK

live music business almost give up. Apart from a few exceptional

initiatives such as the Independent Festival Association’s ‘Ticket Trust’

ticket exchange.

Anyhow, the ‘Great Ticket Swindle’ TV-report produced evidence that

Viagogo, Seatwave & Co did not just apply a “shady” business model .

Two journalists worked undercover at Viagogo and Seatwave and

filmed how the company’s staff bought and sold tickets, on their own

initiative or working together with so called ‘power sellers’. The report

reveals that in fact the majority of tickets on these ticket exchanges

have definitely not been offered by fans to be bought by fans.

VIPNEWS > MARCH 2012 > INDEPTH STORY > THE GREAT TICKET SWINDLE

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The TV-report even showed how staff members buying tickets under

false identity with credit cards issued bearing the names of relatives

to get around the capping of ticket sales per person at websites of

primary ticket vendors.

And if this is not enough, the programme identified leading UK

promoters such as Live Nation UK, SJM Concerts or Metropolis Music

as allocating significant ticket contingents to these companies . We

were informed that SJM Concerts provided 29.000 tickets for the

2011 Take That tour to Viagogo, and another 9.000 tickets for the

upcoming Coldplay tour. Live Nation UK it was also reported, provided

more than 3,000 tickets for the 2012 tour of Westlife and another

2,200 tickets for the UK tour of Rihanna.

Viagogo even filed an interim injunction to stop the broadcast of the

TV-report, but a High Court refused it on all points.

VIP News spoke with David Henshaw, the Executive Producer of the

Great Ticket Scandal after the TV-report was aired.

What sort of response did you get after the broadcast of the

“Great Ticket Swindle”?

– The response both from the music industry and from the public

to the programme was huge. At one stage, the programme was

top trend on Twitter in the UK and second in the world. There was

an avalanche of angry comments from concertgoers who knew

something strange was going on, but had never seen the reality. In

the music industry, Radiohead announced that they would from now

on only sell tickets through trustworthy agencies that could prove

they dealt fairly with the public. Music Week ran a three-page feature

on the programme, and it was discussed in a debate in the House of

Commons in Parliament.

How did the undercover journalists find working for Viagogo

& Seatwave?

– They found both companies fairly intense in their expectations of

the work force. Seatwave was a little more relaxed than Viagogo,

which was a very competitive environment. In both companies it was

constantly emphasised how important it was to keep good relations

with the ‘power sellers’ - the touts who supplied large numbers of

tickets.

While working for Viagogo, did the journalists discover how

Viagogo works internally with their subsidiaries in France or

Germany?

– We didn’t find out a great deal about Viagogo’s operation outside

of the UK

Do they pay their employees good salaries or do they even

have a bonus scheme for successful sales results?

– Viagogo internally had a culture of intense commercial aggression,

as can be seen from the speech our undercover reporter filmed made

by Eric Baker to the UK staff.

(In that particular scene Viagogo-CEO Baker is filmed at a company

team meeting when asked about new legal efforts in the UK to cap

prices for secondary tickets at no than 10 percent on the face value.

Bakers replied: “The odds of that law passing in this country are about

the same as the odds of you turning on your telly and seeing me play

keeper for Chelsea!”)

– It was clear that - apart from the so-called ‘power sellers’, those

who benefit from Viagogo’s resale of primary tickets are promoters

and event organizers. There has been much discussion in the UK

music trade press about this, especially in Music Week.

Secondary ticketing became a very profitable business at the

expense of concertgoers and fans. Do you expect that the

“Great Ticket Swindle” will lead to ticket buyers taking more

care about where they buy their tickets in the future?

– I definitely think, judging by the immense response on Twitter

and elsewhere, that large numbers of fans will think twice before

spending two or three times the face value on a ticket. People accept

that if a concert is sold out, there is a market in resold tickets. What

they don’t accept is that tickets that should have been on sale in the

box office are never made available to ordinary fans at face value.

The entire TV-report can be seen on Youtube at:

http://www.youtube.com/

watch?v=WWlnL8drSdw&feature=youtube

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Biljettbluffen - A Forerunner of The Great Ticket Swindle Manfred Tari [email protected]

At ILMC Hultsfred festival promoter Gunnar

Lagerman told VIP News that a similar TV-

Report about secondary ticketing has been

show by the public TV-station SVT of the

Swedish Broadcasting Corporation. VIP News

spoke to Petra M Wangler, the producer of

the report about her findings and the results

of the report.

When did you broadcast the TV-report

about secondary ticketing in Sweden

and what was the title of the report?

– SVT aired the full report in September 2010.

It was one episode of the award winning

and critically acclaimed series “Uppdrag

Granskning ” /”Mission: Investigating

Journalism ”. The episode headline read

“Biljettbluffen” /”The Ticket Scam”.

Can you please elaborate on the findings

and discoveries of the report?

– It proved, thanks to several anonymous

sources that appeared in the programme,

that the secondary ticket market for concerts

indeed is organized and that the flow of

tickets comes from several directions:

1. Fans and others that simply buy a lot of

tickets to sell to others for a higher price.

Sometimes students are approached to sit

by the phone / computer for hours to buy

all they can.

2. Sponsors that resell their tickets.

3. Employees at the ticket offices that break

the rules and - for dirty money - print too

many tickets to customers linked to the

secondary market.

4. And - most surprisingly, representatives of

the primary market that sell tickets directly to

the secondary market - under the table.

Who else appears with quotes and

statements in your report?

– One of my sources confirms a deal like

this going down at the Live Nation office in

Sweden . Carl Pernow, CEO of Live Nation

Sweden was surprised to learn about the

facts that I presented and promised to take

action. Later he stated that he had informed

the staff about the policy that the two tickets

each staff member is allowed are meant

for personal use only. The same rule - no

reselling is allowed - applies to the sponsors .

Something he said he reminded them of

after the TV report.

Nyamko Sabuni, then minister responsible

for consumer issues, had stated in the past

that it is really up to the music business and

concerts promoters themselves to take action

in the matter. But after the TV report she was

“prepared to reconsider a new legislation”.

Nothing happened though. The secondary

ticket market is still going strong and the fans

still suffer here in Sweden.

Did you receive any responses after

your TV-report was aired either from

companies mentioned in the report or

from concertgoers that had purchased

tickets on secondary ticket exchanges?

– The report was heavily covered in the

press and some journalists have kept on

investigating the secondary ticket market

but as far as I know this is a moral question

and no one (except the fans) is willing to

deal with it for real. The answer is of course

because of the money involved. It’s all about

“I’ll scratch your back - you’ll scratch mine”,

you see. And the fans- well they are the

ones that pay. I personally thought it would

change though, since the international

artists tend to tour more nowadays then

before but well - I have no facts pointing in

that direction at all.

Petra Wangler


Secondary Ticketing in Denmark Manfred Tari [email protected]

The financial gains offered by secondary

ticketing have over the years become a

huge problem in Europe. Also at ILMC VIP

News ran into to Jeppe Michael Jensen of

the primary ticket company Venuepoint.net.

In the light of the Great Ticket Swindle he

got back to us shortly after the conference

to discuss the secondary ticketing situation in

Denmark.

How would you describe the current

secondary ticketing situation in

Denmark ?

– I have been in ticketing for 12 years and

secondary ticketing used to a problem,

however it was minor compared to what

it is today. First sites such as Ebay and

Danish parallel dba.dk were the platform

for individuals who made an extra income

from scalping. Danish legislation forbids the

selling of tickets at over face value, which

helped, as no real enterprise was active on

Danish soil. This has changed with Viagogo,

which recently started a Danish version of

their web site. Today we are in contact with

fans on a regular basis who have bought

tickets through Viagogo and the problem is

increasing dramatically.

Which are the main companies offering

secondary concert tickets in Denmark?

– Viagogo.dk, Dba.dk, Allebilletter.dk,

Buymyticket. dk while Seatwave is not yet

active in DK

Can you please explain your point of

opinion of the practice of secondary

ticketing ?

– There is of course a legitimate need for

consumers to resell tickets they cannot use

for some reason. However the industrialized

ways things are done today through portals

as Viagogo, Seatwave and others are in my

opinion stealing from the artist. Moreover

it damages the whole industry as we as

primary ticketing agents have growing costs

for customer service etc.

Do you know if Danish promoters are

actually working together with these

companies by supplying them with

ticketing contingents?

– NO!

Do you have any knowledge of how

many tickets in general are sold via

secondary ticketing sites in Denmark?

– No.

What kind of measures have been

undertaken so far to offset secondary

ticketing?

– All our tickets are personal however we

only randomly check for identity at the

venues . We generally warn consumers

through the media and through our partner

sites of buying tickets second hand.

What is the legal situation on secondary

ticketing in Denmark?

– It is prohibited to resell tickets above face

value unless you have permission from the

promoter.

Venuepoint also just filed an interim

injunction against Viagogo.

– We believe they have violated our

trademarks by buying Google adwords in our

and our partner’s name.

Please elaborate on why they do

this and about the state of the legal

proceedings ...

– All is still pending at our lawyers. We do also

have a dialogue with the Danish Consumer

Ombudsman on how to better enforce the

current legislation.

Venuepoint is the company behind

Billetlugen. dk . Since its launch in 2000 the

primary ticket platform became the leading

ticketing outlet in Denmark and operates

ticketing platform Billetportalen.no in

Norway and biljettforum.se in Sweden. In

2011 the Company gained a revenue of

more than 100 million Euro and employs

50 people. At the time of the interview ,

Venuepoint has been sold to Nordisk Film, a

company producing and distributing creative

content in movies, TV and games in four

Nordic markets.

For further information please check:

www.venuepoint.net

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Jeppe Michael Jensen

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The Great Ticket Swindle also covers legal

issues within the report and therefore

featured an interview with a legal expert. The

report features statements from Christian

Twigg-Flesner, a professor at the University

of Hull who concluded that Viagogo’s claim,

to be a ticket exchange from fans to fans

actually is a misleading of consumers.

But as the Great Ticket Swindle revealed

that Viagogo has been supplied with

29.000 tickets for the UK-tour of Take That

in 2011 promoted by the UK market leader

SJM Concerts , the German promoter MCT

successfully banned secondary ticketing for

the three shows he promoted with the act

in Germany.

To achieve this MCT worked together with

Smart Tickets and the law firm CMS Hasche

Sigle. Kai Hermes was one of the lawyers

who on behalf of MCT laid out the terms and

conditions that went along with the tickets

for these concerts and explicitly forbade the

resale of tickets. Furthermore all tickets were

sold personalized like aviation tickets, while

Smart tickets supplied a ticketing system that

enabled the security staff of the promoter

to check in real time a ticket data bank at

the doors of the venues, checking if tickets

were valid and that the name printed on the

ticket matched the ID-card of the card holder .

This ensured that tickets sold via second-

ary ticketing websites were identified and

declared invalid. Buyers of these tickets have

been supplied with an information sheet

how to sue the seller of those tickets.

VIP News asked Hermes to watch the Great

Ticket Swindle and to evaluate on the legal

aspects raised as part of the report.

How do you comment on the findings

of the Great Ticket Swindle from a legal

point of view?

– Viagogo and the other firms present

themselves as ticket exchanges that enable

fans to buy and sell tickets from each other

(“fan to fan”). However, according to the

report of “Dispatches” staff members sell

the majority of tickets. These employees

optionally change the prices for the tickets

in order to get the maximum of profit. Thus

the consumers get false information about

the nature of the sales process, about who

is the seller and about the manner in which

the price is calculated. This is misleading.

Moreover , it is likely to be an infringement

of the so-called black list of the German

Unfair Competition Act (UWG) with the

consequence that these commercial practices

are in all circumstances considered unfair.

Are there similar consumer protection

laws in place the UK?

– In so far as this is about a “business-

to-consumer ” (b2c) constellation and the

question of unfair commercial practices the

consumers in Germany and England should

be equally protected due to the directive

2005/29/EC of 11 March 2005 concerning

unfair business-to-consumer commercial

practices (so called UCP-directive). This

directive demands a complete harmonization

of the unfair competition law across Europe

in regard to unfair commercial practices

against consumers.

In reference to the business practises

of Viagogo are there also other law

opportunities in Germany to protect

consumers from these kind of business

methods?

– Competitors or consumer protection

authorities can attack an infringement of

the UWG. A complaint to the consumer

protection authorities could be helpful. The

information of consumers could be another

possibility to protect them against the

business methods of these exchanges. From

a legal point of view the personalization of

tickets according to German law provides

for another protection of the consumers

against the distribution of tickets via such

“exchanges ” that are in fact selling the

tickets through their own staff as commercial

dealers.

Kai Hermes can reached at CMS Hasche

Sigle, for further information please go

to: http://www.cms-hs.com

The Great Ticket Swindle from a Legal PerspectiveManfred Tari [email protected]


Kai Hermes

A Wider View of The Great Ticket ScandalAllan McGowan [email protected]

A pioneer of the European live entertainment

space, Steve Machin has a wealth of

experience in ticketing strategy and

marketing . He was Head of Music Services

for Ticketmaster Europe where he was

responsible for developing new services and

client strategies across Europe and before that

ran UK National Operations for Channelfly

(MAMA Group). While at Ticketmaster , Steve

introduced the concept of dynamic pricing

to European concert promoters and initiated

the charity ticket auction program used by

iTunes. He also worked with Tixdaq, the UK

ticket comparison and data service launched

in 2007, to monitor the burgeoning ticket

resale market.

He is an evangelist for the uniquely powerful

role that the live experience plays throughout

a fan’s relationship with an artist and how that

relationship can be nurtured and developed

through technology. He presently heads up

Stormcrowd - an entertainment consultancy

specializing in ticketing and social commerce.

In this article he argues that whilst Channel 4’s

Great Ticket Scandal raised some extremely

vital and interesting points, it also missed out

large chunks of the bigger picture…

Bringing an arsenal of investigative

techniques to bear, Dispatches sought to

expose what it had clearly predetermined

was the dark side of the hitherto opaque

and mysterious world of the concert industry

- ticket sales and resales . The sense of

entitlement and expectation that fans can

show, rightly or wrongly, regarding an act

and their tickets is startling and Dispatches

exploited this highly charged topic to create

what it portrayed as a sensational scandal .

But while the programme did uncover what

appeared to be genuine legal concerns

around some aspects of the descriptions

of the resale market, overall I would argue

that the sensationalist approach that it took

failed to give an accurate representation of

the complex economics of the 21st century

ticketing market.

RockonomicsIn order to understand this, we first

need a quick (and simplified) overview of

rockonomics . Economists talk of supply and

demand, yield management and mitigation

of risk - do these principles apply to the sale

of tickets? Absolutely. The promoter acts as

an initial speculator, buying the performances

(and related services such as venue hire)

hoping that they can make a profit on the

total cost of the tour, by selling sufficient

tickets at the right prices. The promoter

assumes risk from the performers.

The perceived demand impacts upon supply

variables - ticket pricing, the number of

tickets made available, and the size of the

venues. The better the tour can predict

demand , and price tickets accurately against

fans expectation of value, the more effective

the yield will be in returning a profit on the

risked capital.

What risk? A question asked by the

programme was “how hard is it to predict

how successful a comeback tour by Take

That might be?” It was raised precisely to

undermine the notion that there is any risk

in promoting concerts. While some tours are

inherently more risky than others, one only

has to look at the annual returns filed by

Live Nation to see razor thin margins where

even a small amount of increased risk could

significantly impact upon the business.

Risky BusinessSo how do the promoters reduce their

risk? By selling tickets at prices that are low

enough to ensure that sufficient attendees

provide a return on investment, and that

price, for some of the tickets is below market

value, while for others is above market value.

It is a common complaint that “music or

concerts cannot be reduced to a commodity

and traded” - I am no apologist for the areas

of the resale market that were exposed

as legally challenging from a consumer

protection viewpoint, nor making any claims

as to whether it is right or wrong to trade

tickets - that is not the subject of this piece

– but what is clear is that tickets ARE traded

like commodities. That is in part because

there continues to be a consistent disparity

between the market price of a ticket and the

published face value at which it is first sold.

14


Steve Machin

Not all tickets are created equal, and over

time the value of each ticket will vary - see

a recent article by PRS for Music for a good

review of the economics of ticket discounting

- the “front rows” get traded while there are

still seats available “at the back”

The internet has simply made it much easier

to buy and sell most products, everything

from ipods to insurance and all points in

between. Tickets are no different and with

arbitrage opportunity available the internet

allows buyers and sellers to easily connect

and transact at market price - leading to the

creation of an additional layer of speculation

- fans who buy more than they need, and

professional brokers investing in buying

tickets purely to resell - the cold harvesting

of tickets.

The Whole TruthThe Dispatches investigation wanted to

ensure that this programme was car-crash

television of the highest order. In doing so

they did not tell the whole story about many

of the points that they covered.

1. Fans learned that a significant proportion

of tickets sold on ViaGoGo and Seatwave are

not sourced from individual fans looking to

sell tickets that can no longer be used - the

notion of being exclusively fan-to-fan is a

misnomer as tickets come from brokers and

box-offices. It is worth noting, as Dispatches

failed to mention, that Seatwave states

clearly on their website when tickets have

been made available directly by the box

office .

2. We also heard that on some tours,

ViaGoGo and Seatwave are provided tickets

directly by the promoter to sell at the best

price possible. The presumption was that

tickets are always sold at astronomical prices

above face-value. In reality, tickets are often

sold on exchanges, or other discount channel

sites at significantly below face value. The

cold truth is that exchanges can provide

access to a cohort of demonstrably price

insensitive customers who are willing to pay

a premium to acquire tickets closer to the

event date.

3. More surprising was the evidence that

staff at ViaGoGo have purchased tickets

from primary vendors such as Ticketmaster

to resell using the company’s own “internal

seller ” accounts. There is a significant

difference between market clearing price

(which is generally considered a good thing

economically) and an exchange making the

market under false pretenses.

The public rage on twitter during the

broadcast was aimed squarely at the

exchanges and promoters, and assumed (as

Dispatches suggested) that artists or their

management are not aware that tickets

are allocated to exchanges. Speaking to

Pollstar reporter John Gammon following the

broadcast , Live Nation’s Paul Latham stated

that Live Nation has never allocated tickets

without the knowledge and consent of the

artists’ management. The Concert Promoters

15


16

Association issued a statement to the effect

that placing tickets into the secondary

market reduces prices by increasing supply,

and ensures that additional value is captured

within the industry.

Dispatches also failed to mention that there

are already mechanisms available that make

ticket reselling more difficult should a tour

choose to. These include paperless tickets

that require the purchasing credit card to

be present or photo-ticket schemes such as

that used by Glastonbury festival. However

removing speculators exposes the tour to

true demand, a point made eloquently earlier

this week by Bob Lefsetz in his industry blog

(www.lefsetz.com) and this is not always

good news for the artists or promoters.

The Fans Pay the BillsThe wider impact of price sensitivity on the

concert business must be considered for

everyone competing for the same share of the

fan wallet. Do fans who decide to not spend

money on a ticket spend it on other concerts

or other music entertainment products or do

they spend it on computer games or fashion

or some other category? Do fans who spend

high sums of money on concert tickets spend

less at the venue on F&B or on merchandise?

Will dynamic pricing be a reality and provide

genuine real-time market pricing for concerts

and would that be embraced by the industry

and fans alike as a fair solution?

Ultimately in such a complex market there

are a lot more questions than answers - while

emotions clearly run high when discussing

entertainment tickets, does it mean the

government should legislate and introduce

price regulation into efficient markets? After

all the face value is an arbitrary price that

could have been set much higher or much

lower. And anyhow now that these markets

exist, can the genie be put back in the

bottle ? Would it be helpful, and to whom?

Dispatches successfully demonstrated that

some fans care a lot about ticket pricing but

that even more care about transparency.

Built in part on largely one-sided questioning

designed to elicit highly emotional responses

from disgruntled fans who chose to purchase

tickets (and similarly grief stricken tales

from disappointed fans who chose not to)

the programme failed to make a balanced

representation of issues affecting the ticket

business. All the primary stakeholders in the

concert industry that i speak to are concerned

with how to get more fans, to habitually

attend more shows, more often. That is the

wider challenge that frames this debate.

(This article previously appeared in Record of

the Day - a daily music industry newsletter

featuring the most relevant news along

with a future hit track. As VIP –Booking

informs the live industry so Record of the

Day keeps other aspects of the industry – as

they say, in tune. Sign up for a free trial at

recordoftheday. com )

www.stormcrowd.com

Further referenceBob Lefsetz (@lefsetz) on ticket

scalping:

http://lefsetz.com/wordpress/index.php/

archives/2012/02/28/john-mayer-fights-

scalpers/

Pollstar review of Dispatches:

http://www.pollstar.com/blogs/news/

archive/2012/02/24/797458.aspx

PRS article on ticket discounting:

http://www.prsformusic.com/creators/

news/research/Documents/Economic%20

Insight%2024%2016_12_11.pdf

PRS article on Secondary Market

Analysis):

http://www.prsformusic.com/creators/news/

research/Documents/Will%20Page%20

(2006)%20Economic%20Insight%201.pdf

MyMusicMailer.com enables artists to MAIL their music to more than 6.000 venues and agencies worldwide…


17

VIPNEWS > BUSINESS > MARCH 2012 MUSIC IN SHARES

Music in SharesManfred Tari [email protected]

Higher Revenue and a Lower Loss for Live Nation in 2011Live Nation’sThe business report for 2011 improved compared to

the year before. The concert giant managed to improve its revenue

result from $5.065 to $5.383 billion and also lowered its net loss from

minus $228.3 to just minus $83 million. After the announcement of

the results the share price of Live Nation suffered a sharp loss of more

than 6 percent. While the closing price on February 23 was at $10.5,

the lowest price one day later was at $9.45. Actually the share price

performance of LYV until February 24 performed well, but since then

came down to $9.34.

CTS Eventim Lower Revenue in 2011Shortly after Live Nation, CTS Eventim revealed its business results

for 2011. The revenue gross went down from 519.6 to 502.8 million

Euros. In particular the revenue results for the Live-Entertainment

division went down from 333.8 to 281 million Euro. Nevertheless

the shares gained as the Company still delivers profits. The Earnings

before Interests, Taxes, Depreciation and Amortisation (EBITDA)

moved up from 88 to 94.6 million Euros. The share price also benefits

from the hope of possible compensation payments by Live Nation due

to the arbitration case between both companies. Currently the share

stands at 25.76 Euro.

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VIPNEWS > MARCH 2012 VIPNEWS > MISC > SEPTEMBER 2011

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C.CLEAR IS NO STRANGER TO THE NECESSARY GRIND OF THIS INDUSTRY!

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