Bands Seek Piece of Ticket Scalpers' Action

Dec. 6, 2007 — -- With CD sales tanking, bands and their managers are looking to squeeze extra cash out of the live-music revenue stream by getting a piece of online ticket scalpers' profits.

Now Radiohead, The Verve and more than 400 other bands have joined the Resale Rights Society, a new British industry group that wants to levy fees against websites that facilitate so-called secondary sales of tickets. The money would be used to compensate artists, managers, booking agents and promoters.

"It does not make sense to try and criminalize (ticket scalping)," said Marc Margot, former Island Records chief and chairman-elect of the Resale Rights Society, which was announced Tuesday. "On the other hand, there are not only real issues of consumer protection here, (but) it is unacceptable that not a penny of the estimated 200 million pounds in (annual) transactions generated by the resale of concert tickets in the U.K. is returned to the investors in the live-music industry."

Many fans see ticket scalping as unfair, and in some U.S. states the practice is limited or illegal. But others see sites like Seat Exchange, eBay and StubHub -- which let scalpers resell concert tickets at whatever price the market will bear -- as a natural part of the music ecosystem. And some fans simply recognize scalpers as the easiest route to getting great seats to sold-out shows.

But just as record labels are going after a portion of concert receipts with their so-called 360 deals, managers and bands are salivating over ticket scalpers' hefty markups.

If the Resale Rights Society's plan works, any website that facilitates the sale of tickets to shows by the group's members without paying the fees would be subject to legal action. Under the plan, all tickets would be emblazoned with an official seal to help fight fraudulent ticket sales.

Agreements between the RRS and online ticket exchanges could be finalized by spring 2008. The organization, which was formed by the Music Managers' Forum, also hopes to have artists' right to an interest in secondary ticket sales written into British law, which currently does not restrict scalping of tickets.

But the RRS and similar groups that could emerge in the United States will have to fight an uphill battle to get a piece of secondary ticket sales.

"I don't know how that's ever going to fly," Gary Bongiovanni, editor-in-chief of live-music publication Pollstar, said of the group's plans. In the United States, he said, "The trend is in the opposite direction. Areas with strict anti-scalping laws have been rolling them back and letting the market deal with the situation."

However, Bongiovanni pointed to a potential ray of light for the RRS and any similar effort by the U.S. live-music industry: the fact that a ticket is, in a sense, a contract. With the right fine print, he said, an industry group might be able to control how tickets are resold, but "a lot of lawyers are going to make a lot of money" determining the legality of the contracts.

At least one online ticket retailer is unconvinced by the RRS reasoning.

"If I have a Harry Potter book to resell, do I pay J.K. Rowling twice?" said Viagogo founder Eric Baker in an interview with Reuters.