Despite predictions that the U.K. live-music sector is set for a revival this year after a downturn blip in 2010, the controversial topic of secondary-ticket sales heated up this week with the launch of The Ticket Trust on Monday (July 11).
Set up by the U.K.'s Association of Independent Festivals (AIF), The Ticket Trust promises to offer a "secure ethical ticket exchange" service to counter the growth in unauthorized online ticketing by fraudsters and scalpers.
The Ticket Trust is aimed at fans attending music festivals organized by AIF members, which include the popular Bestival, Camp Bestival, Creamfields, Secret Garden Party and WOMAD, which was founded by rock star Peter Gabriel.
Launched three years ago, the AIF has about 30 festival members, which sell about 350,000 tickets combined a year. AIF says 18 members have already signed on to use the Trust. However, non-AIF members are also welcome to participate.
At its website, buyers unable to attend events for personal reasons can return their tickets to the Trust. Once verified for authentication, the tickets can then be resold at the original price plus a 10% maximum handling fee.
"We've been observing the way the (secondary-ticketing) market has been evolving and we felt the consumer is being ripped off; we don't like seeing our tickets sold for three times the (original) price," says Ben Turner, AIF's vice chairman and originator of the Ticket Trust initiative. "A consumer should be able to exchange tickets on a website with someone who wants to go to the gig. But the buyer should not have to pay inflated prices."
The Ticket Trust is jointly launched with Sandbag Ltd, an "ethical" e-commerce specialist that sells ticket directly to fans for major artists such as Radiohead, REM, Adele, and Florence and the Machine.
Turner says he was inspired to set up the Trust after hearing a Sandbag executive publicly condemn the practice of buying a large number of tickets for allegedly sold-out shows, which are then resold online at extortionate prices.
Speaking to Billboard.biz, Turner adds: "As an organization, that's not how we operate. Our members risk livelihoods and even mortgages to put on events that could be profitable, break even or lose money. But they do it for a variety of reasons, including the love of music."
He explains that The Ticket Trust became necessary despite a host of other initiatives to control abuse within the U.K. secondary-ticketing market.
The secondary sector picked up momentum in 2005 with the launch of Viagogo, an online ticket-exchange service created by Eric Baker, co-founder of the U.S.-based StubHub, and with the 2006 introduction of Seatwave, a rival service by Joe Cohen, a former Ticketmaster executive.
Their success, which has seen their websites turn into Europe-wide businesses, prompted a host of illegal sites that sell non-existent tickets for popular shows to unwitting victims.
According to the U.K.'s Office of Fair Trading (OFT), an estimated £12 million ($19.2 million) was lost to ticketing fraud in 2010, while one in 12 ticket buyers has fallen victim to fraudsters.
Despite campaigns such as the OFT's Just Tick It effort in 2009, which aimed to educate consumers to be more discerning about where they purchase tickets, the problem continues.
To regulate ticket sales and clamp down on bogus sellers, Sharon Hodgson, a U.K. Member of Parliament (MP), presented a Sale of Tickets (Sporting and Cultural Events) Bill in parliament in June 2010. It is scheduled for a second-reading debate in October.
During recent discussions at the U.K. government's House of Commons, Hodgson and other MPs expressed astonishment at abuses within the ticket-resale business. Some £55 ($88) tickets for the reunions gigs of U.K. former boy band Take That and Robbie Williams, who used to sing with the band, were being auctioned online for more than £1,000 ($1.597) a pair.
Turner, who supports the bill, hopes The Ticket Trust will help put a stop to such practices. "The independent (festivals) sector continues to be overlooked by the live industry as a whole. As a collective voice, we're very strong and can do something about (unauthorized resales) in an interesting ethical way, especially as Sandbag is linked to acts like Radiohead, which have strong principles about these things."
He admits that there is nothing to stop scalpers from buying tickets on the Trust's website to resell illegally elsewhere. "But, at the very least, we hope it offers an alternative route to informing and educating consumers."
The Ticket Trust is being launched now as some AIF festivals scheduled for late summer and fall, including Kendall Calling (July 29-31), Secret Garden Party (July 21-24), Creamfields (Aug. 26-28) and Bestival (Sept. 8-11), are expected to sell out or are sold out and hence vulnerable to ticketing fraud.
Although live music revenues fell 6.7% in 2010 after increasing 9.4% to £1.54 billion ($2.46 billion) in 2009, according to U.K. royalties collecting society PRS for Music, they are expected to pick up again this year because of popular touring acts such as Take That and Robbie Williams.
When asked his opinion of schemes such as The Ticket Trust continuing the secondary-ticketing debate, Seatwave's Joe Cohen would only comment: "There is no debate; these festivals rarely sell out so this is an incremental revenue thing for them." And how did he feel about the Sale of Tickets Bill being discussed in Parliament? "It will not proceed."