[This is an expanded version of a post from last month. More to come, too. – AC]
A year-and-a-half after the country lost its collective crap over the scalping of tickets for the last Tragically Hip tour, the Ontario Government is ready with legislation designed to clamp down on ticket-buying software bots and the scalpers who use them. Third and final reading of the legislation could come as early as Wednesday (November 29)
Here’s the plan:
- A ban on the use or sale of ticket bot software in Ontario. Nice, but this is really just a feel-good symbolic announcement. How will the Ontario Government keep out off-shore bots? The real power lies with the AI and machine-learning tech used by ticket sellers. Ticketmaster says they’re getting so good at detecting robots that in some markets, 90% of the tickets are sold to humans. It’s that last 10% that’s tricky.
- Ticket operators will have the power to sue bot companies. Good. I hope they do. Ticketmaster has lots of lawyers.
- Ticket sellers will have to disclose how many tickets will go on sale for any given concert (or theatre or sporting) as well as the capacity of the venue. Good. Up until now, this information has resided in a black box. Now fans will know exactly what they’re up against when competing with each other for tickets.
- Resale prices on tickets will be capped no more than 50 percent above the original face value. All online sellers will have to disclose any extra fees up front. Whoa. Hang on. I’m totally on board with regards to points 1, 2 and 3. Point 4? I’m not so sure about that.
While no one likes to be gouged on the price of a ticket, limiting the rules of supply and demand isn’t the answer, either. Consider:
- Keeping ticket prices artificially low on the secondary market won’t put more tickets into the hands of fans. It’ll just make it cheaper for those who already buy tickets this way.
- Why should concert tickets be subjected to price controls that distort market forces? We’d all love to see price limits on a litre of gas or airfare or food but we know that’s never gonna happen. What makes concert tickets so special?
- If people are already willing to buy a ticket at an inflated price, doesn’t that tell us that the original price of the ticket is too low? Why should that market demand margin go to someone other than the artist or the promoter?
- Ticket prices go up but they also come down. As perishable goods, they’re useless once the show starts, so if you need to get rid of some seats, you’re going to drop your price until someone takes them off your hands. Funny, though, you never hear about the sellers who lose money on tickets because they didn’t read the market correctly.
- Will this chase legitimate operators like StubHub out of the game? Maybe, which means secure resale outlets will dwindle, raising the possibility of increased fraud by small-time operators or individuals.
Overall, this is a populist move by a government doing terrible in the polls. Like all sleight-of-hand politics, it’s more important to seem to be doing something than not do anything at all–even if they both add up to the same thing.
So what would be some options?
- A group called FairTicketSolutions.com offers some ideas. They’ve developed some technological alternatives to the way tickets are being sold today.
- I love the “concert ticket insurance” technology proposed by Ticket Guardian. It seems to me that their plan deals with ticket reselling in a fair and equitable way–and both the artist and the promoter benefit instead of the scalper or independent reseller.
- Blockchain technology. What about eliminating the middlemen all together? We’re already heading in that direction. Companies like GUTS Tickets and Aventus are already working through the details (Thanks to Rick for those links.)