One of the core issues at the center of all ticketing legislation is whether or not the consumer “owns” anything when they have purchased tickets to an event. Event organizers and promoters contend that consumer rights in ticketing end whenever they want it to – a ticket is a license that conveys no property to those who purchase it in any way. This belief has led to the widespread adoption of ticketing systems that can be used to restrict, or even eliminate the ability of consumers to freely move tickets that they have purchased to others – either giving them to friends or family, or selling them on if they can’t attend an event.
This has become a major battleground between consumer rights organizations and event promoters, and the subject of significant legislative efforts in recent years.
In several states, the right of consumers to receive tickets in a format that can be freely moved without permission from the primary ticketing agent has been put in place by law:
Colorado (PDF opens in new window)
Connecticut (PDF opens in new window)
Virginia (PDF opens in new window)
In most instances, this means a requirement that tickets be offered in either a print at home (PDF) format or physical printed ticket from the ticket seller, as those methods do not have any way that the primary ticket vendor can restrict consumer rights to transfer tickets freely.
In places where this is not the case, the use of restrictive ticketing systems has occasionally cropped up, leaving consumers in the cold.
Known Issues with Mobile/Paperless Ticketing Systems
The systems used to restrict consumer rights to tickets they’ve purchased generally come in the form of mobile-only ticketing systems that require consumers to download a specific application from the box office vendor to access. Ticketmaster and AXS have such apps, as does Major League Baseball.
Ticketmaster’s “Safetix” system has become infamous after being used to shut hundreds of consumers out of events solely on the basis of tickets having been resold, despite otherwise being completely valid. Attempts have been made by Ticketmaster to rebrand safetix as a COVID-19 solution, but the technology was developed with the elimination of competition from non-Ticketmaster resale marketplaces in mind.
Not all consumers can afford a smartphone, which is required for these systems
According to Pew Research Center, at least 3% of Americans do not own a cell phone at all, with a full 15% of adults saying they don’t own a smartphone. That number is substantially higher than the 35% who said they owned a smartphone in 2011, but the rate of adoption has slowed down dramatically. After jumping from 35 to 77% in less than five years, the percentage has taken five more years to reach just eight percentage points higher.
Diving into the demographics, the numbers are bleaker. A full 15% of consumers who identified themselves as black in the survey indicated that they own a cell phone but not a smartphone. Just shy of 20% of those making less than $30,000 per year say they own a cell phone but not a smartphone, and for those over age 65, a full 39% do not own a smartphone.
Mobile-only and restrictive ticketing systems are arguably a tool of inequity when viewed in these contexts, as they disproportionately exclude the elderly and people of color from being able to participate in the purchase of tickets to live events because they lack the required technology to even access tickets they purchase.
Non-transferable ticket systems enable “price floor” practices that drive up consumer costs
One of the primary reasons for mobile-only and paperless ticketing is the creation of a “walled garden” effect. This means that the ability to list tickets for resale can be restricted to the box office-preferred system, eliminating competition from other marketplaces. While industry voices often testify that this is designed to keep prices low for consumers by hampering resale, it is often used to keep prices high for rights-holders by making it impossible for those who have purchased tickets and can’t use them anymore to sell them for below a price that the box office sets.
In the language of economics price floors subvert the ability to set a market-clearing price.
For example: Consumers who purchased tickets to see Ed Sheeran on a recent tour were bombarded with PR about how the only lawful resale marketplace was Twickets, a price-restricted resale system owned by promoters and other industry insiders. Part of the process involved setting a limit price that tickets could be resold through that system. But a minimum was also in place. For those who couldn’t attend an event and wanted to sell their tickets, the floor on how low they could price them meant that they couldn’t lower the asking price to below what remaining tickets at the box office were selling for. The box office was then able to continue selling tickets freely, and consumers who couldn’t go were stuck unable to price theirs competitively.
This has long been the case for entities like the National Football League and other professional sports organizations as well. If they sell through any “official” marketplace, it generally means that there is a floor price in effect, which keeps prices artificially high. The NFL actually agreed to halt the practice of requiring price floors from teams with the Attorneys General of Florida, Massachusetts, New York, Ohio, Pennsylvania, and Washington D.C. in 2016 amid anti-trust concerns, but the various teams have continued the process anyways.
Non-transferable ticketing systems grant box offices and vendors a treasure trove of user data to sell
Non-transferable ticketing systems encourage sick consumers to attend events anyways
In an ironic twist, given how Ticketmaster is trying to rehabilitate the Safetix system by painting it as pro-COVID safety, restrictive ticketing systems incentivize consumers attending events even when they are ill.
In a non-restrictive ticketing world, someone who is sick and knows they should not attend an event in close proximity to others would be able to give away their tickets or list them for sale to another, which is obviously the safer choice for all involved. Take away that right, and all of the sudden a consumer who doesn’t feel well has two choices: Forfeit whatever price they have paid for their tickets, or go to the event despite being sick.
What Consumers Think
Springsteen Fans on Restrictive Ticketing from Fan Freedom Project on Vimeo.
Consumer Rights Organizations – Public Positions on Non-Transferrable Ticketing
“Ticket issuers and primary ticket platforms are increasingly using anticompetitive tactics to control the lifecycle of a ticket from start to finish. These include issuing paperless and other non-transferable tickets or requiring photo ID and the original credit card used for purchase to gain venue entry. These restrictions limit competition, increase prices, and hinder fans’ ability to buy, resell, or give away tickets as they choose.
Fans must have the option to purchase a transferable ticket at the initial point of sale to ensure they can use, resell, or give away their tickets freely. Consumers should be protected from discriminatory, anticompetitive, and deceptive practices that make it harder for fans to buy, resell, and use event tickets in a free market.
–Fan Freedom Project, website homepage
Another area that merits attention from the FTC is the limiting of ticket transferability by legitimate ticket sellers like Ticketmaster. This practice creates a barrier to competition that restricts consumers’ choice in what to do with the tickets they purchase. This can push costs higher for consumer as they are forced into a locked market where transactions are controlled by one entity—the entity that controls ticket sales. This can result in yet another convenience fee for consumers and diminution of competition in the market for secondary platforms.
We’re already seeing restricted tickets. Garth Brooks used restricted tickets for his several of his 2016 performances. Fans who gave their tickets to family or friends still had to escort them to the venue doors. And a ticketholder who couldn’t attend could not easily sell or even give away his tickets…
However, fans don’t suffer these restrictions when Garth Brooks performs in states like New York, Virginia, Connecticut, or Colorado. These states have laws with the same protections that maintain consumer choice, convenience, and market competition, so New York, Virginia, Connecticut, and Colorado fans can freely transfer, resell, and give away their tickets. Big-name acts like Garth Brooks regularly perform in states with laws ensuring these protections, so enforcing against this competition limiting practice will not impede concerts and other ticketed events from continuing to take place.
– Netchoice, testimony submitted to the Federal Trade Commission in 2018
Pearl Jam’s second problem with the BOSS ACT is the bill’s requirement that tickets be transferable. It’s understandable that the band would take issue with this, since they are employing Ticketmaster’s SafeTix technology to prevent (or at least limit) the ability of fans to resell, donate, or give away tickets for this summer’s tour.
Prohibiting ticket transferability as a way to prevent scalping is a cure worse than the disease. Fans often have to buy tickets for shows months in advance. Unexpected events can prevent someone from attending the show. Forcing consumers to eat the cost of those tickets is patently unfair. By protecting ticket transferability, the BOSS Act will make sure consumers can sell or give away their tickets when life inevitably intervenes and they can’t attend an event. It will also prevent Ticketmaster from introducing anti-competitive restricted-transfer tickets, which prevent resale on any exchange where Ticketmaster can’t control the prices and set the rules.
– National Consumers League, Op-Ed by John Breyault published by The Hill in response to Pearl Jam’s open letter opposing the BOSS Act