Ticketmaster says pricey resale tickets protect consumers

Ticketmaster says it is providing consumers with better protection through its resale site TicketsNow, which offers concert tickets at many times their face value, but consumer advocates say such a setup should be illegal.

People who log on to Ticketmaster's website looking to buy tickets for concerts, plays, sports or other special events often find themselves automatically redirected to TicketsNow — which Ticketmaster purchased in February 2008 for $265 million US — just minutes after the tickets go on sale.

"It seems to people it's instantaneous and they've never had a fair shot," said Ticketmaster vice-president Joe Freeman, who noted tickets for high-demand events can sell at up to 14,000 per minute. 

"It's as fair a system as we've been able to come up, with short of having people wait around the block in the freezing cold, as used to happen in the good old days."

The Consumers' Association of Canada said it has received many complaints from buyers who don't like being directed to a resale site owned by Ticketmaster that charges much higher prices for the same tickets they couldn't buy through Ticketmaster's own system.

'Unconscionable,' Consumers' Association VP says

"It's a conflict, it's a monopoly, it's unconscionable," said association vice-president Mel Fruitman. "It may not be illegal, but it sure is immoral and unethical as far as I'm concerned."

Freeman insisted that Ticketmaster does not hold back tickets for TicketsNow, nor does the resale site get special access to tickets. He said the resale site is available to any broker or individual who wants to sell tickets.

"We are giving absolutely no preferential access to ticket brokers or anyone affiliated with TicketsNow to get tickets," he said. "We're not diverting tickets to TicketsNow."

Ticketmaster does get a slice of the increased price from tickets sold on TicketsNow, in effect giving the company two sets of service charges from each ticket sold and then resold.

"That's a fair statement," Freeman said. "It's accurate, but it's apples and oranges, because the service charge off the initial sale is almost always shared with the venue, the promoter or the team."

The consumers association complained that Ticketmaster even charges customers to print a ticket on top of its service charge for the same ticket.

"You pay for them not paying to print the tickets," Fruitman said. "They don't have to incur a printing cost, and I've got to pay for that?"

Fruitman also said Ticketmaster's near monopoly on tickets sold at most major venues in Canada and the United States may be broken next year as contracts come up for renewal, with promoter Live Nation already announcing plans to sever its relationship with Ticketmaster in 2009.

$1,199 for $44 ticket

Ticketmaster received complaints after an AC/DC show in Vancouver sold out in minutes, only for tickets to be quickly available for higher prices on TicketsNow. The resale site also charged up to $1,199 for a $44 face-value ticket to a recent Killers concert in Toronto — roughly a 2,500 per cent markup.

Tickets for many events are rarely priced at their full market value, said Freeman, who noted many people are used to buying tickets at higher prices from scalpers on the street without any guarantees they aren't counterfeit.

"If you're buying a ticket from a guy under the overpass by the Air Canada Centre, you don't know if those are going to be valid tickets until you're in the door," Freeman said.

"We're trying to bring a much higher level of consumer protection to the whole resale space."

No answers from Ontario

The Canadian Press was shunted back and forth between three Ontario ministries as it tried to learn if Ticketmaster's ownership of TicketsNow violated the province's law against reselling tickets above face value, and was eventually told complaints should be taken to police.

"If there are those who are concerned about it, or have identified some issues, they should refer them to the police so they can investigate," said Attorney General Chris Bentley.

"I'll certainly make sure that my colleague Minister Takhar knows about it as a consumer protection issue that I'm sure he'll want to take a look at."

However, the office of Small Business and Entrepreneurship Minister Harinder Takhar referred calls about TicketsNow to the Ministry of Government and Consumer Services, which promptly redirected calls to the attorney general.

Toronto police say they have received no complaints about Ticketmaster's ownership of TicketsNow.

Freeman said even though Ticketmaster is confident it does not violate the resale law, the company believes the law is outdated and doesn't reflect the realities of the internet age or the law of supply and demand.

"You and I both know there is a thriving ticket-broker industry … so the law is really a fiction," he said. "We very strongly feel the law needs to be modernized to reflect the reality of internet commerce. By keeping a price cap in place, you're really just driving the [resale] business into the shadows."