More Transparency, Less Regulation in the Secondary Ticket Market

eBay Inc. Staff

Several months ago, rugby fans were excited to see a rare contest between the British and Irish Lions and the Wallabies in Australia — if you were lucky enough to secure a ticket, that is. Tickets to the games were reportedly sold out within 15 minutes of being available to the public.

Curious how this happened?

For “sold out” events, only a small portion of tickets are typically released to fans and to the public. Many more tickets are frequently circulated to event organizers, promoters, sponsors, and other venues where there is no transparency. Many promoters also want to offload tickets as quickly as possible to transfer risk, and therefore allow multiple ticket purchases by the same person.

Dean Budnick, co-author of Ticket Masters: The Rise of the Concert Industry and How the Public Got Scalped, says a very small percentage of seats actually available to purchase during the initial general sale. For example, only 7% of tickets to a February Justin Bieber show were available to purchase at general sale. This means that 93% of tickets had already been set aside for other partners.

Yet the New South Wales (NSW) Government and now an Independent Federal Senator are planning to introduce laws that will regulate the on-selling of tickets.

Proponents say this will help consumer protection and improve transparency – the reality is it will achieve neither.

If we really want to be advocating for consumers, Australian and New Zealand governments should be looking at improving transparency at point of sale in the primary market, and requiring industry to enforce greater transparency in how many tickets are distributed to genuine fans and the public, and be required to disclose that percentage publicly, to better inform consumers and fans.

As a proof point: The Commonwealth Consumer Affairs Advisory Council (CCAAC) reviewed ticket on-selling in 2010 and its impact on consumers. Following the extensive review, the Council reported that the volume of on-selling is exaggerated. As a result, the Council determined that there is no need to bring in laws to regulate the on-selling market as current laws are adequate.

They also said promoters already have it within their power to make their practices more transparent and consumer friendly.

What consumers need is more transparency in the primary market not regulation in the secondary market. On-selling on the internet actually helps consumers and suppliers, by providing more access to tickets, allowing easy transferring, and improving ticket sales, publicity and crowd numbers.

Regulating the on-selling of tickets does not make sense; improving transparency does.