“We owe it to the future of our industry, and every artist filling our rooms, to keep ticket prices low and keep consumers’ hard-earned money with people actually doing work,” said Dayna Frank, CEO of First Avenue & the 7th Street Entry and founding president of the National Independent Venue Association (NIVA) in opening remarks at NIVA 2023 in Washington, DC, last week.
Frank called upon Congress to work with NIVA to fight fake tickets and to help reign in the secondary ticket sales market where brokers resell tickets at very high markups.
“We owe it to the future of our industry, and every artist filling our rooms, to keep ticket prices low and keep consumers’ hard-earned money with people actually doing work,” Frank said.
NIVA is working with other organizations to create a licensing protocol. This coalition of organizations have launched a movement, and begun proposing legislation, called Fix the Tix to advocate for legal remediation to predatory ticketing practices.
“If Save Our Stages helped us survive, Fix the Tix is the paradigm-shifting legislation that will ensure we can continue to thrive,” Frank declared in remarks at The Anthem on July 10.
NIVA reports that tickets in the secondary resale market have increased in price more than 10 times the primary market. Frank pointed to the role of the internet in empowering brokers to snap up large numbers of tickets and mark up their prices.
Speaking on a Fix the Tix panel later in the day, Eric Budish, a professor of economics at the University of Chicago Booth School of Business, called this practice “rent-seeking.”
“When you have a big pile of rent, it creates a technological arms race to grab those rents,” Budish said.
Brokers see “free money” when popular shows go on sale, and they can command hefty prices for tickets that are in demand if they buy up tickets from the primary sales market.
“What used to be 5 percent of tickets resold on the secondary market is now easily 20 percent and in extreme cases up to 90 percent of tickets,” Budish said. “It’s not in the interest of artists and venues.”
The Fix the Tix proposal says that promoters and artists should be able to put terms and conditions on the ticket as they transfer hands, Frank said. Some institutions like Broadway and sports teams control their secondary markets and use them appropriately. Music venues have been able to exert this level of control, Frank said.
The resale market began lobbying Congress as far back as 2009 with a single line of argument: “I bought the ticket, it is my property, and I can do whatever I want with it,” Frank said.
“We are starting at a deficit, but we are saying the ticket is actually a license. The inventory is actually the show. That ticket may change hands 25 times, but ultimately the product is the show that we are responsible for. As the people responsible for the product, we should be able to have terms and conditions on this license until the product is actually delivered,” Frank said.
In addition, concert-goers attend a show in a venue where venue owners and operators are legally responsible for the delivery of a performance and the safety of the audience, she added.
Neeta Ragoowansi, executive director of the Folk Alliance International and president of the Music Managers Forum, framed licensing in terms of equity and control for artists.
Control centers on an artist’s right to control their band and control their identity. “It’s not always about how much we are going to make in terms of fortune and fame at the end of the day,” Ragoowansi said. “There is an ethos in American folk, especially in the American folk revival, that was very much about representing the ordinary person.”
This idea of giving voice to struggle also holds that there should be equitable access to the arts. Price gouging prevents equitable access, Ragoowansi said. “People should experience the music that is transformative to their lives.”
Budish observed a second-hand effect of brokers buying up tickets: rooms that are emptier than they should be.
“The secondary market is made of brokers who have a small piece of the market and don’t care how many people show up for the event. So they can get away with charging an obscene amount of money for a ticket, selling one or two, and letting the rest go to waste,” Budish said.
This no-show rate problem “is the downstream effect of waste and of rent-seeking,” he added.
Frank estimated no-show rates at music venues at about 5-7 percent prior to the COVID-19 pandemic. Now, on average, venues experience a 12-15 percent no-show rate. “We are not seeing that in other industries,” she said.
Ant Taylor, CEO and founder of ticketing technology platform Lyte, declared that artists ultimately own the tickets. “Without the artist, there is no value,” Taylor said. Meanwhile, venues own trademark to their name and proprietary info. The interests of artists and venues thus align when it comes to protecting intellectual property.
“It’s in everybody’s interest for a ticket buyer to go back to a venue over and over again in the course of a year,” Taylor said. “It’s in the artists’s interests for the artist to come back and see their show at the venue year after year.”
Ragoowansi emphasized that intellectual property violations are particularly a problem when it comes to fake tickets, which must be criminalized at a federal level, NIVA says. The Fix the Tix coalition also should communicate with search engines and ensure that infringing activity such as fake tickets are removed from search through enforcement of the terms and conditions of search applications like Google.
What might the Fix the Tix coalition do until Congress enacts comprehensive ticketing reform? “Class action suits could grab headlines, and settlements could follow,” Ragoowansi said.