How the Adele-Endorsed Twickets Went From 'Irritant' to a Key Player in Ticket Resale: Q&A
Formed by Richard Davies in 2011 in opposition to what he regards as unfairly profiteering secondary ticketing sites, Twickets has quickly grown to become the U.K.'s largest fan-to-fan ticketing platform, with sales of over £2.7 million ($3.3 million) since launch and over 500,000 registered users buying and selling tickets at face value or less.
That may be small fry compared to the titans of the live business (Live Nation's Ticketmaster division generated $1.2 billion in secondary ticketing sales alone in 2015), but Twickets' fan friendly model is winning fans in influential places. Adele, Mumford & Sons, One Direction, 5 Seconds of Summer and The 1975 have all appointed the platform as their official resale partner, as they look to circumvent scalpers, or touts as they're known in the U.K., from charging exorbitant fees for tickets.
The London-based business, which generates its revenue through a 10 percent booking fee on buyers, has equally high-profile backing from within the industry, with One Direction and 5 Seconds of Summer managers Harry Magee and Richard Griffiths sitting on its board of investors, alongside former EMI Music chairman Tony Wadsworth, Chrysalis Records co-founder Chris Wright and artist manager Ian McAndrew, whose company Wildlife Entertainment represents Arctic Monkeys and Royal Blood.
Marcus Russell and Alec McKinlay of Ignition Management (Noel Gallagher, Catfish and the Bottlemen), British management company Closer Artists (James Bay, George Ezra) and Neo Sala, founder of Spanish concert promoter Doctor Music have also backed Davies' vision of a viable alternative to secondary marketplaces.
As Twickets' profile has risen throughout 2016, largely on the back of Adele's patronage, so too have its ambitions. This fall the company launched an investment drive via crowdfunding platform Seedrs to grow operations and fund its expansion into Spain, Australia and the U.S. in 2017. The initial funding target of £700,000 ($865,000) was met in 32 days, with just under £1 million ($1.2 million) raised at the time of going to press.
"We started as an irritant to the secondary market. We're now becoming a competitor," Davies tells Billboard, as he looks back on a year when secondary ticketing was rarely out of the headlines. And looks ahead to a future when, he hopes, "money isn't lost to third parties like touts and secondary platforms that doesn't find its way back in."
Billboard: Your recent investment drive exceeded expectations. How do you plan on using those funds?
Richard Davies: There's still a great deal to do in the U.K., so we will be expanding the team slightly here, bringing in more developers and marketing ourselves more aggressively. Aside from the U.K, we will be expanding into mainland Europe initially and New York. We will be taking it state-by-state in the U.S., but there's certainly opportunities there given recent changes in legislation. I've been over to meet a number of potential partners in New York.
Opposition to the secondary ticketing market has reached unprecedented levels in the past year. Do you see that pattern continuing in 2017?
Absolutely. Ever since we started resistance to the secondary market has grown, but over the last 12 months in particular there's been a real sea change. It's been incredible to see artists and those involved in entertainment, theatre and comedy all speak out about having their tickets touted or scalped. People now are starting to stand up too what's going on. It's become so blatant now that something has to be done.
The counter-argument from secondary ticketing services is that they are simply providing a service that enables fans to buy and sell tickets, if they so choose, to sold out events. The price they pay is determined by demand.
Their argument is always: 'It's the right of the ticket owner to sell at whatever price they want.' But my argument is that it's the right of the event owner to set the price of the ticket. What right does anyone else have to then abuse that ticketing pricing strategy? This whole theory that there's all this money on the table still and people aren't pricing their tickets correctly is just nonsense. A ticket isn't an asset. It's a license to see a show and to my mind, that is not something that should be traded. The ticket price is set for a reason. It's set to attract a certain audience. So why should a third party that puts nothing back into the industry have the right to profiteer off that? I fundamentally disagree with that principle.
What changes would you like see made in the ticketing sector in 2017?
The first and most important thing is to enforce existing legislation. We have good legislation in place [in the U.K.] that ensures any buyer knows where the seats they are purchasing are located. That also means that any event organizer is able to then cancel the ticket if they feel that they shouldn't be sold on. But it's not being enforced at the moment mainly down to a lack of resources. The second thing is legislation banning the use of bots, like in the States. That's a real positive step forward and I'd like to see that forced through here as well next year.
What impact do you think banning bots will have on the ticketing and live industry?
I'm not saying that it will stop touting by any stretch of the imagination. But it will certainly make it easier for the consumer to buy a ticket at the on sale or pre-sale date. There will always be alternative ways of operating and the touts will get hold of tickets in other ways, but fundamentally it does make life harder for them.
It's now been over six months since Professor Waterson's report into the secondary ticketing sector in the U.K. was published. Are you confident that any of his recommendations, most notably stronger regulation of how vendors -- both primary and secondary -- sell and market tickets to fans, will be implemented?
If you'd asked me that question six months ago I would have said: 'No.' But over the past three to six months we have certainly seen signs that Parliament is stepping up to the plate and wanting to see change. I think we are in a much better place than we were. I think the government is now finally seeing what the issue is. This isn't just about market economics. It isn't just about the right to buy and sell tickets. This is about the illicit practice that goes on and consumers being ripped off.
The controversial issue of primary vendors, promoters and managers bypassing normal routes to market and directly allocating tickets to secondary platforms resurfaced last month when a TV documentary in Italy reported that Live Nation was involved in the practice. In your experience, is this still a widespread aspect of the ticketing business?
I think in certain sectors it's got worse. During the four years that we have been operating I would say that the illicit trading has actually been exacerbated. I am concerned it's getting out of control, but I am also encouraged by the fact that now people are starting to stand up to it.
In addition to partnering with U.K. ticket agencies like Gigantic and Myticket.co.uk as their official resale partner, Twickets has recently began selling a small number of primary tickets alongside those from registered users. What impact has had that had on your business and the wider secondary market?
We're selling at the end of the food chain, not as a competitor to the primary agencies. For instance with Massive Attack's [September] hometown show [in Bristol] and One Direction prior to that, a small allocation was held back for us to sell in the weeks leading up to the event. Because of that we could drip feed face value tickets into market to bring down prices on the secondary market. It's not going to work for every single show. You've got to be confident that you're going to sell out to hold back an allocation for that long. But it does tend to work well for the right show and those tend to be the ones that get heavily touted.
Twickets was chosen as the official resale partner for the UK leg of Adele's spring 2016 tour and next year's Wembley Stadium concerts. How big a deal was that for you?
It's probably the single most important thing that has happened to us to date. The biggest artist in the world right now has effectively validated our proposition. It's really raised our profile. It drives new users to our service that wouldn't otherwise have known about us, and most importantly of all it helps ensure that people are able to get spare tickets and legitimately sell spare tickets around her events. We rely on organic growth, but we also rely heavily on partnerships with industry. The great news is that a year ago we were having to sell our service to potential partners. Now they are coming to us. We worked with around 50 to 100 partners in 2016 and I certainly see that increasing next year.
Are you concerned that despite Adele's best efforts to beat the scalpers by partnering with Songkick on anti-tout measures and appointing Twickets the official resale outlet for U.K. shows -- complete with the warning that "Resale of tickets through any channel other than Twickets will not be accepted" - there are still numerous tickets for her upcoming Wembley Stadium shows on sale on all the major secondary sites
There will always be ways that people will find to get around the system, but we are confident that given time we will ensure that those buy [tickets] for that will not succeed.
Could the major labels do more to help combat scalping?
Absolutely. We've had a few conversations to date with a few major labels and they have been very positive with what we are doing. I very much hope and believe that they will join the fray next year and start to promote us. This isn't just a question of fans being ripped off. It's about protecting the industry and ensuring that money isn't lost from the industry to third parties like touts and secondary platforms that doesn't find its way back in. That will ultimately mean less events being put on. Less risk being taken around events. Less merchandise being sold and less money being spent over the bar. I think it damages everyone in the industry and it needs to stop.
How strong is Twickets' business model financially?
Revenue is growing very fast and we're confident that we will continue to grow during the next few years. Clearly it's a volume game. We have to ensure that we are covering as many events as we possibly can. We need to be expanding into other territories outside the U.K. Ultimately we're trying to grow a real business here and that's what we're going.
Are you profitable?
Not yet, but we will be soon. It's a small team and revenues should outstrip our spending within the next two years.
Where do you see the ticketing industry being in five years' time?
We will start to tickets tied much closer to the user and it will be difficult for that ticket to then be transferred to other parties without the permission of the event itself. That's the key. Access control at the moment is archaic. It's based around a 2D barcode that uses 1950s technology. We need to see a change in a way that access control works and the way that the ticket is tied to user and validates the user as much as the ticket on entry. That will stop a lot of the bad practice that goes on.
The technology to introduce such measures has existed for years and is already used by select promoters and events. Why do you think it's not being applied on a wider scale?
It comes back to access control and who controls that. And it's often those that have a vested interest in the secondary market. Certainly for the big ticket events, it's those same parties that own the secondary platforms.
Do you believe Twickets can one day rival the giants of the ticketing business as a more ethical alternative?
I think we can. We started as an irritant to the secondary market. We're now becoming a competitor. We're actually starting to impact on the practices of the secondary market and I can only see that continuing over time.