Secondary Ticketing Industry – an Appetite for Disruption?

March 30, 2017 | Sam Valdes

Live entertainment ticketing has to come into the digital age.

The live music, sports and entertainment industries are going through somewhat of a Golden Age today, fuelled by the hunger of a majority of millennials who prefer to spend more on experiences than on material things.

It is predicted that global revenues of live music alone will hit $24.5Bn by 2021, growing at an estimated 7% per year – and that’s just the ticketing sector for gigs and events.

The business of ticketing for live events however, is not shifting with the times. In fact, tickets for millions of gigs and sports events are still paper-based, while virtually every fan at stadia and venues has a smartphone in their pocket. This smartphone is capable of shopping, paying and simply downloading digital tickets for transport journeys of every kind, even airline tickets (in an age of the most stringent security), and a million other services – but not event tickets.

The current situation tends to distort the secondary ticketing market. This market of course is necessary; but, in the absence of a properly managed e-ticket lifecycle, there is temptation to overcharge fans desperate to secure tickets to their favourite artists at all costs. By artificially limiting supply, demand is fuelled and prices are inflated to (in many extreme cases) astronomical levels.

It is estimated the scale of secondary ticketing worldwide has already reached some $8.5Bn. The use of internet platforms and bots to harvest tickets on an industrial scale, as well as digital marketing to hype the value of tickets, has become impressively sophisticated to the point that is becoming a serious issue for the event ticketing industry as a whole.

In the UK and other markets, world leading artists such as Adele, Elton John, Mumford & Sons, One Direction and many others have spoken of their disgust at the exploitation of their fans, in the UK calling it a “National Disgrace”.

For this to change, several things need to happen:

•    Effective Government legislation to ban the use of bots, and properly enforced legislation to protect consumers, as well as a review of the dominance of ticket distribution players in the market. Articles were released earlier this month stating the UK government is now looking to take action against the growing power of the so-called “secondary ticketing” industry (click here if you wish to find out more);

•    The arrival of technology disruptors to create better and more ethical secondary ticketing platforms where tickets can only be resold at face value (some players exist, such as Twickets and Dice, but not yet at the scale required to tackle this effectively);

•    A concerted drive for innovation to better utilise trusted mobile and financial platforms, linked to secure identities, for digital ticketing and transaction tracking;

•    Determined action by major players to protect their reputations by addressing the issues head on and with greater momentum, investing in digital innovation, tracking down and closing off avenues for exploitation and abuse of fans.

A way to stop bots is to request a mobile phone number be associated with each ticket. Interestingly, mobile operators can help here: they can link mobile phone numbers to user identity information and ticket purchases through a simple framework called Mobile Connect. Blockchain is another promising technology, allowing event organisers to set tamperproof records of ticket purchases – so that the resale process can be monitored.

But technology will not solve the current issues without a transformational shift involving all the major stakeholders: music artists, venues, promoters, consumer groups, government, law enforcement agencies and the technology sector need to come together and deliver a fairer, more convenient and secure identity-based approach to serving and protecting hundreds and millions of music, sports and other fans.

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