Ticketmaster Fights the Secondary Market with Paperless Ticketing

In preparation for a highly anticipated fall 2009 tour, Ticketmaster introduced a paperless ticketing strategy for Miley Cyrus , making it the first exclusively ticket-less effort in live music history for a major artist. Since enacting this strategy, however, tickets have been reluctant to sell, unlike Cyrus’ 2007 tour which sold out instantly. Since tickets went on sale June 13th , more than 40 of the 45 scheduled dates are yet to be sold out. As a result, Cyrus has become the center of a heated discussion revolving around past current ticketing models. While the primary market provider, Ticketmaster, in conjunction with Cyrus’ management, Frontline, has articulated that its efforts are an attempt to create transparency and control within the business, voices in the secondary market have deemed the new model inefficient. This tension probes industry moguls and ticket-holders alike to question the benefits and consequences of this new model and to predict if we will see more implementation of it in the future.
In a digital world, going paperless seems logical. Every other aspect of the music industry is virtual, so why should the touring industry hang on to the antiquated idea of a physical ticket? Paperless does away with printing online receipts, eliminates the possibility of losing a ticket and only requires the fan to show up at the concert with the credit card used for the purchase along with a valid photo ID. It is said by Ticketmaster that these benefits will allow consumers to attend concerts with ease.
For Ticketmaster and Frontline, however, the new model has a much larger benefit. This new process is their effort to eradicate the secondary market and give concertgoers the chance to buy any seat in the house at face value. Prices are scaled from $39.50 to $79.50 with $295 seats in the first 25 rows available through “I Love All Access”, a VIP ticket site owned by Frontline management. Due to the fact that tickets are non-transferable, scalpers are disabled from buying a huge bulk of tickets in order to resell them at large mark-ups. Debra Rathwell, senior VP at AEG Live, the promoter of the Miley Cyrus tour, stated that the lack of sold-out shows is actually due to the absence of secondary market players. “This is what on-sales used to look like before brokers got into our business” Rathwell supports paperless ticketing because it gives the consumer the chance to take their time with each purchase without the fear of loosing the opportunity to buy a good face-value ticket. She sees the recent sales numbers as highly satisfactory for Cyrus’ tour.
In contrast, Don Vaccaro, CEO of TicketNetwork along with other secondary market representatives, has made his standpoint clear by pointing out that customers do not prefer paperless ticketing due to its restriction on transfer and possible resale. They believe that lower ticket sales are a result of this inconvenience and that people are resisting to fully committing to a certain show upon ticket purchase. Vaccaro confirms this in his statement saying “Consumers stayed away from paperless tickets in part because of convenience and logistic issues” Said Vaccaro. While the secondary market’s reaction is no surprise, there are other factors that show paperless does not necessarily mean effortless.
The real problems might not come into play until people arrive at the venue. Paperless ticketing requires the fan to present their photo ID at the entrance and swipe their credit card. While this practice is well known from air travel the arenas in question will have to accommodate masses in the multiple thousands. It seems difficult for the guards to be able to check each person’s ID in order to make sure the credit cards are valid. Referring to the problems of the 2008 AC/DC tour which sold 3,000 tickets paperless per venue Chuck LaVallee, director of music relations for StubHub, comments that “If they didn’t have time to check IDs on 3,000 tickets, they’re not going to have time to check them on 18,000. I think the whole thing’s a mess.” In the end, only on the days of the concerts will we know whether paperless makes the actual experience easier or turns it in to a logistical catastrophe.
Ticketmaster’s main motivation is reported to be the elimination of the secondary market. For many years, however, the secondary market has become a more legitimate part of the touring business through online resale and auction sites. The primary ticket sellers have not come to terms with them due to the fact they cannot share in the profits that the resellers gain. The primary sellers believe it is unlawful for scalpers to share in a revenue they have not contributed to in any way and they resist the way the secondary market has driven up prices and redefined the actual value of tickets.
Scalpers have turned ticketing into a laissez-faire economy allowing for a dynamic pricing model that, until this new model, could not be controlled by primary sellers. Brokers point out that this development is proof of the fact that there is a strong demand for the service they are providing. In a competitive market, supply and demand dictate price and whether or not the secondary sellers are Ticketmaster’s competition, bypassing them could not only mean an exclusion of resale but elimination of thie main competition.
Critics of Ticketmaster have further disapproved of the company owning it’s own secondary market sites, Ticketsnow and Ticketexchange, which seem to contradict their general repugnance against resale. They have also pointed out that Cyrus, among many other artists has caught on to the increased prices, selling all access tickets at scalpers prices through alternate websites. Doing so, they again prevent fans that buy at face value, from buying seats within the first rows. After two presales via American Express and Cyrus’ Fan club together with “I Love All Access”, ordinary fans remain limited in their selection of top seats. Ticketmaster seemingly agrees with scalping as long as they share in the profits.
This leads us to ask whether the fan actually is a part of the paperless ticketing equation or simply serves as a convenient pretense- much like Miley Cyrus herself. With Ticketmaster being under investigation concerning a violation of antitrust laws, it is questionable at this point how paperless ticketing will affect the company.

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