Guest Commentary: Creating Flames Within The Secondary Ticket Market Guest Commentary: Creating Flames Within The Secondary Ticket Market
The rapid development of technology over recent years has seen the numbers of consumers with smart phones soar, which in turn has led to... Guest Commentary: Creating Flames Within The Secondary Ticket Market

The rapid development of technology over recent years has seen the numbers of consumers with smart phones soar, which in turn has led to the rise of mobile ticketing applications such as StubNut and a rise in the use of e-tickets. These apps are becoming increasingly popular and it is estimated that by 2015, one in every eight mobile users will either have a ticket delivered to their phone or buy a ticket using their phone. This compares with approximately 1 in 20 people now, which equates to 230 million current users. (Juniper research, 2013).

The move from paper to digital tickets is nothing new, in fact, since it was first introduced by Ticketmaster it has been a hot topic for debate. However there is a smart phone app that is aiming to take the use of e-tickets to a whole other level, and it has the potential to shake up the already volatile secondary ticket market.

TicketFire

TicketFire launched in January this year. The application, which is currently only available on iOS, allows ticket holders to scan their paper event ticket, and then share, sell or transfer those tickets to other people also using the app. It differs from current ticketing applications as it also allows ticket holders to sell and buy tickets, even once an event has already started. For example if two people are already inside a venue, one person could sell their ticket to the other person, halfway through the event, effectively enabling them to upgrade their seat. It is also likely to be used by consumers wanting to grab whatever ticket is left in the hope that someone will swap/sell once the event has begun.

In normal circumstances ticket holders own the rights to their tickets until they walk in the arena door, at which moment the revocable license kicks in. These rights can essentially be revoked by the venue at any time and for any reason. If ticket holders use the application to sell their tickets once they are already in the venue they could be leaving themselves vulnerable to having their license revoked.

Lack of Legislation and Consumer Protection

The secondary ticket market is already the subject of bad press and last year Stubhub hit the headlines for selling tickets to the 12/12/12 concert organized to benefit survivors of Superstorm Sandy at ridiculously inflated prices. One pair of tickets to the star-studded charity event were listed for a laughable $808,500 each (NewYorkDailyNews, 2012). TicketFire is classified as a ‘ticket exchange’ and acts as a platform, as such they don’t regulate the price at which people resell their tickets for, leaving the door wide open to scalpers. The ticket industry already lacks legislation and consumers currently have to find their own means of protecting their purchases, such as paying for tickets using a credit card like Visa, which does at least protect them under the ‘Truth In Lending Act’. Buying tickets through Ticketfire however will not offer consumers a protective bubble to fall back on.

Unauthorized Ticket Re-Sellers

The nature of the application means that TicketFire is not involved in the transaction and it is left to the buyer and seller to arrange payment amongst themselves. This will likely cause scalpers to take advantage of the situation. Scalpers and ticket brokers take in more than $1.5 billion a year reselling concert tickets (USAToday, 2012). TicketFire could be opening up the door to a whole new level of scalping, by allowing sellers to continue their efforts even once the event has begun. This could lead to re-sellers profiting from ‘the best seats’ by selling them inside the venue, at the very last minute, to keen consumers who don’t want to miss out.

Fraud

This under reported problem is estimated to make organized criminal networks millions of dollars a year. The most common method for unauthorized ticket resellers to gain tickets in volume is from compromised contacts within sporting or ticketing institutions. However, applications such as TicketFire are creating new, easier ways for fraudsters to operate. Because consumers scan their tickets using the app they will be left with the paper copy, meaning that it could be saved and used or sold, thus making it easy for fraud to take place.

Will It Be A Hit?

Figures show that consumers still lack trust in online transactions; with 11% of internet users stating that online transactions aren’t secure enough and 57% saying they only trust well known sites for booking tickets, this suggests that there is still a large degree of wariness about buying online as a whole (Mintel, 2013). Because of this it is likely that many consumers will be put off by the apps unregulated environment.

The current ticket market is dominated by Ticketmaster and it is likely that the creators of TicketFire will look to join forces with them so as to be able to guarantee that the e-tickets they supply will work across all venues, something that hasn’t been done yet. Whether this merger happens or not, the growth in popularity of TicketFire is likely to cause a stir in the secondary ticket market. Problems arising from the act of reselling tickets once already in a venue and other issues could cause the need for additional legislation to be created in order to help protect consumers.

Although the concept is innovative, it is opening up doorways through which negative actions such as scalping and fraud can take place on a whole new level.