Business Matters: California Ticketing Legislation Favors Live Nation

Live Nation got a boost on Tuesday when the California Assembly upheld language in a bill that allows for paperless ticketing technology and creates a penalty for people who use software -- called bots -- to circumvent security measures placed by issuers to prevent automated efforts to acquire event tickets.
AB 329 would help Live Nation's ticket division, Ticketmaster, by allowing for paperless tickets in the nation's most populous state. Ticketmaster had been at odds with secondary ticketing business StubHub over the legislation in California as well as Tennessee, Florida, Minnesota and New Jersey. 
The bill defines an event ticket as both physical and electronic. Much of the Assembly discussion over the bill came down to a "philosophical discussion" over the question of ticket ownership, according to the Wall Street Journal. Ticketmaster argued that tickets grant the buyer a "license" to occupy a seat or enter a venue. StubHub wants the definition of a ticket to enable the buyer to own the rights to the ticket until the ticket is used to enter the venue. Once the buyer is in the venue, says StubHub, the revocable license should take effect.
Paperless tickets are rare today. The Wall Street Journal reports that just 0.1% of tickets sold today are paperless. But there is a strong movement behind paperless ticketing as a means of improving the customer experience and limiting the tickets that end up being sold at a markup at secondary marketplace like StubHub. Legislation that bans paperless or, as is the case in New York, require customers are given the option of paper tickets, would benefit StubHub.
Ticketmaster doesn't want to ban the resale of tickets. It has its own secondary marketplace, TicketsNow. But paperless ticketing would allow Ticketmaster to keep the resale and exchange of its tickets within its very own ecosystem.
Some passages involving transparency of ticket prices were struck from the bill. For example, a paragraph that would have required a ticket issuer disclose the service fees in advertisements and promotions was stricken from the latest amendment. Also stricken was a paragraph that required an event package, such as a bundle that includes tickets plus airfare and hotel, break out the price charged for the ticket.
Live Nation also benefits from the bill's treatment of computers to acquire tickets. Persons caught using a bot can be charged with a misdemeanor. The bill would also authorize the state's Department of Consumer Affairs to issue regulations to implement the provisions related to bots.
Paperless ticketing is a controversial subject. People on StubHub's side of the debate want consumers to exercise freedom with their tickets, and they are hesitant of any technology that allows a ticket issuer to command the resale marketplace. People on Ticketmaster's side of the debate -- which includes many artists and venues -- want to limit resale on the secondary market and allow fans to have a better chance at securing tickets to in-demand events at face value.

Ticketmaster won this latest round, but the fight is far from over.