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Ticket seller Mario Livich (Nick Westover/© 2009 Nick Westover)
Ticket seller Mario Livich (Nick Westover/© 2009 Nick Westover)

Small Business

One for the revolution, please Add to ...

Miley Cyrus is not only a squeaky-clean teen star; she may also be the future of the ticket industry. Cyrus's concert tour this year employed a Ticketmaster innovation that it is pushing to venues across North America as the new industry standard: tickets without actual tickets.

In this paperless model, fans buy a ticket with a credit card (or, in the case of Cyrus fans, their parents' credit card), then swipe that card at the door instead of having their ticket punched, ripped or scanned. As with an airline ticket, the seat to a Miley Cyrus show is not transferable, so it's difficult to resell if you don't have the credit card used to pay for it.

“The brokers hate paperless ticketing because they know what it does,” says Joe Freeman, senior vice-president at Ticketmaster Inc. “It gets tickets directly from the artist and the event provider into fans' hands at the price the event provider wants fans to pay. It's a pretty potent tool.” MTS Centre in Winnipeg and Copps Coliseum in Hamilton were among the first venues in Canada to use Ticketmaster's paperless ticket system, introduced last year for tours by Metallica and Tom Waits.

The National Association of Ticket Brokers, a U.S.-based lobby group representing companies like ShowTime, has lashed out at the idea, calling it anti-competitive. The association wants the paperless ticket model to be scrutinized as part of investigations that have already been undertaken by competition regulators in Canada and the U.S. Those probes concern Ticketmaster's proposed merger with event promoter Live Nation, which would give the company an even greater hold over the market. To make their argument, both sides – Ticketmaster and the resellers – are holding themselves up as defenders of the fans.

“If there's a broker in California, he's going to think long and hard before buying a paperless ticket to an event in Ontario,” Freeman says, since the reseller would have to be on site with his credit card for the buyer to get into the show. Were the system in place for the Olympics, gold-medal hockey tickets might be easier to come by at face value for the average fan. At events where the paperless system has been used, “We're already seeing the public is getting enhanced access to tickets,” Freeman says.

Resellers such as Livich and StubHub say the system will simply line Ticketmaster's pockets, while doing more to harm than help customers, since it will make it hard for fans to hand over tickets to friends when they can't attend an event themselves. It also poses an obstacle to fans who want to use the aftermarket to buy a ticket to a sold-out show.

“When one company with market power tells fans they can't deal with competitive marketplaces, then we suspect fans are not being served,” says Lance Lanciault, StubHub's director of legal affairs. “More importantly [if there is an online resale market] consumers know what market prices are, so they're less likely to be tempted to pay above-market prices to a seller on the street who doesn't offer any consumer protections.”

While both sides rush to the defence of the helpless consumer, a bigger game is afoot. The brokers and resellers fear Ticketmaster is trying to corner the market for itself. Despite its protests, Ticketmaster has its own resale site, TicketsNow: The company is both a primary seller and an aftermarket player. If the company can shut out ticket resellers and have TicketsNow act as a transfer site for paperless tickets, it will have the market to itself, allowing seats to be exchanged with the press of a button.

Ticketmaster has already found itself in hot water over its ownership of TicketsNow. Fans in New Jersey complained this year that they were being automatically directed to the resale site to buy Bruce Springsteen tickets at inflated prices mere seconds after the concert went on sale.

Lawmakers have yet to rule on the inherent conflict of interest for companies that play both markets. In the meantime, primary ticket sellers are increasingly being lured to join the game – including Olympic organizers in Vancouver, who have mulled over the idea, and professional sports teams that have set up resale sites of their own, taking a commission on each sale.

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