Reselling websites are a forum for those selling on tickets to events they had no intention of going to at high prices, but why is this a problem and can they defend themselves? Tara Evans investigates
Fair deal: Tickets to Adele in London are selling for three times the price on reselling website GetMeIn.The problem with ticket reselling
Last month we reported on the proposal to put a cap on the rate of profit that secondary ticketing websites.
Secondary ticket websites claim to be a forum for fans to resell tickets to gigs that they can no longer attend. But, as This is Money has found in the past, it's not that simple.
Fans are often denied seeing their favourite band or artist because people buy up tickets to popular events and then use a reselling website to legally and legitimately sell them on at a profit.
Websites, such as Seatwave, Viagogo and GetMeIn (owned by primary selling website Ticketmaster), argue that they provide a safe and secure way for fans to resell tickets to events that they can no longer attend.
But that picture of a fan whose plans suddenly change is not the one events often portray: it is usually possible to find tickets for popular events at high prices on reselling websites within hours of them going on sale.
Two standing tickets to see Adele at the London Hammersmith Apollo on 19th September 2011 are being sold for the cheapest prices of £99 per ticket on GetMeIn (and the most expensive listed is £768.90 for one ticket.)
So that's £198.00 for two tickets, plus a processing fee (20% of the value of the tickets plus VAT) of £36, plus a delivery charge of £9.37, taking the grand total to £243.37 for a pair of tickets that originally cost £66.75.
GetMeIn allows sellers to list the price that they want and they will then deduct 10% from the seller and a 20% 'processing fee' from the buyer.
However, it is possible to get a bargain from a secondary ticketing website. Less popular events will often be resold on the site and it if sometimes possible to get a ticket for lower than the original price.
The call for a ticket reselling cap
Tickets to events are sold in two ways, the first - the primary seller – does a deal with the artist/management/promoters to pay them to sell the tickets on behalf of the event. These are websites like Ticketmaster, WeGotTickets and See Tickets.
Then there is the secondary market – this is where people can buy or sell tickets. Through reputable sites the purchases are protected and secondary websites charge buyers and sellers a percentage proportion of a ticket to make a profit. Naturally, many of the sellers, promoters and artists involved in the primary market is opposed to the secondary market, as they feel like they are missing out on extra profit that is made by reselling.
Muddying the waters some primary sellers are involved in the secondary market, for example TicketMaster owns GetMeIn.
Last month, Labour MP, Sharon Hodgson proposed that anyone reselling tickets should only be able to make a 10% profit on the original price
We spoke to Dave Newton, founder of primary ticket seller WeGotTickets, about the proposed cap. He said: 'I don't know how enforceable a cap is but it would set a benchmark as reasonable.
'It has become the norm for people to buy tickets and then resell them to make money. Its turned people into touts who never were before. A ticket is not a commodity, it's a contract and I don't think you should be able to sell a contract.'
However, not all tickets to events are allowed to be resold. Anyone found to be selling on unwanted Olympic tickets could be fined £20,000 for ticket touting.
What a waster: Carl Barat emailed fans to say the Libertines are against ticket reselling Over 20 million applications were made for the 6.6 million tickets available and despite reselling being legal the organisers of the Olympics are determined that no-one will profit from selling tickets. The Government recently increased the fine for ticket touting from £5,000 to £20,000.Anyone who wants to sell or exchange a ticket must do so through the official website - which will not be up and running until next year.
The case for secondary ticket sellers
So what do the secondary ticketing websites say? This is Money spoke to GetMeIn, Seatwave and Viagogo and asked them the same set of questions.
The questions were:
• Who are your sellers? • What percentage of sellers are fans reselling tickets because they cannot attend an event? • Do sellers buy tickets to resell on your site with the sole intent of reselling them at a profit? • If yes, how big a percentage of sellers would you estimate? • Why when there is a big ticket event do reselling tickets appear on your site within an hour of the event going onsale? • What commission do you make from reselling tickets? • How much do you charge the seller? • How much do you charge the buyer?
Simon Lambert: Why we want to stop the ticket rip-off ViagogoQ. Who are your sellers? The overwhelming majority of sellers on Viagogo are ordinary sports and music fans who are trying to sell on tickets that they can no longer use.
Q. What percentage of sellers are fans reselling tickets because they cannot attend an event? 95% of people who sold on Viagogo in the past year, sold fewer than 10 tickets
Q. What percentage of sellers are fans reselling tickets because they cannot attend an event? As mentioned previously, the overwhelming majority of users on Viagogo are genuine sports and music fans selling less than 10 tickets a year. On the site, the average mark up across the majority of tickets listed on the site is around 10% -to 15%.
Around 50% of tickets sold on Viagogo sold at or below the ticket face value. Examples of great deals on the site at the moment include; McFly – you can go and see the boy band from just £15, half the face value price Peter Kay – you can see Peter Kay at the O2 from as little as £24 – face value is between £35 and £42
Q. Do sellers buy tickets to resell on your site with the sole intent of reselling them at a profit? See above
Q. Why when there is a big ticket event do reselling tickets appear on your site within an hour of the event going onsale? If you take festivals for example, a number of big festivals release tickets for the following year almost immediately after the festival has finished. In addition, 'early bird tickets' are also released up to 8 months before the festival takes place. During this time, people's plans change such as booking a holiday, a wedding commitment and Viagogo provides a platform for consumers to resell tickets they can no longer use. What we have found is that the number of tickets listed on the site increases as the event draws closer.
Q. What commission do you make from reselling tickets? / Q. How much do you charge the seller? / Q. How much do you charge the buyer? Viagogo charges 15% to the buyer and 10% to the seller. This is standard across all events. In addition to our buyer fee we also charge for delivery. The cost of delivery varies depending on the location of the buyer and the seller. For example we charge more for international shipments.
These fees cover the cost for managing the guaranteed delivery of tickets from the seller to the buyer and will cover the cost of maintaining the website, providing customer service to both the buyer and seller, overseeing the delivery of tickets from the seller to the buyer and managing the payment processes on both sides.
Seatwave
We asked Seatwave the same set of question. They responded with the answer below.
'Seatwave fans have traded well over a million tickets on its exchange and thousands of customers return to Seatwave every day for the access, safety and price discovery it provides. Seatwave is fortunate enough to also be the most recommended event ticket service on www.reviewcentre.com and has some of the highest customer satisfaction scores in the ticketing industry. These facts can only come about because Seatwave has and continues to fulfil its promise to its customers – providing safe, secure and fairly priced tickets to great events.'
GetMeIn
We sent Ticketmaster, who own GetMeIn, the same set of questions. Their spokesman responded by declining to comment or contribute to this article.
How This is Money has reported the issue
This is Money's assistant editor, Simon Lambert, launched the campaign against ticket-rip offs in December 2007. It called for the end of 'booking fees' associated with booking tickets to events online as well as an investigation into the secondary market.
One year later Simon Lambert wrote an article on ticket reselling where he put questions to GetMeIn, Viagogo and Seatwave about how many fans really use their sites.
In 2009 the Department for Culture, Media and Sport carried out a white paper into the secondary ticketing market. It concluded that reselling is an established element of the ticket market however it would continue to keep an eye on consumer concerns.
In March last year This is Money received dozens of comments after fans comedy TV series, Flight of the Conchords, were left angry after they could not buy tickets, yet many appeared on ticket reselling websites minutes after they had orgionally gone on sale.
In August last year we reported how Carl Barat emailed fans to say that the system they put in place to get tickets to a Libertines comeback gig was to prevent secondary reselling of tickets. Earlier this year Which? made a super complaint to the OFT against the sneaky charges imposed by budget airlines and other companies for card payments - it is hoped that this will cover booking fees on tickets.
Last month, Labour MP, Sharon Hodgson proposed that anyone reselling tickets should only be able to make a 10% profit on the original price. The bill is due for discussion in parliament later this year.