Thank you, Madam Chair, and members of the committee.
Thank you for this opportunity. I want to express my sincere appreciation to all members for this invitation to join you today for an open discussion about the Canadian vibrant live entertainment industry.
In the business of event ticketing, the role of primary ticketing companies, such as Ticketmaster, is to facilitate the sale of tickets between event producers, attractions, teams, promoters and venues and their fans.
In this business, Ticketmaster's top priority is getting tickets in the hands of real fans. We succeed only when true fans get tickets to the events they love. I want to be clear from the outset that some myths and misconceptions do exist in the live entertainment ticketing business and about Ticketmaster in particular.
First, Ticketmaster does not own the tickets. Ticketmaster does not decide the pricing of the tickets, nor do we decide how many tickets will be made available for sale. These decisions are made at the sole discretions of those rights holders I mentioned: the attractions, the artists, the teams, etc. These are the artists and producers who are staging the event.
Ticketmaster is a technology platform that effectively connects the attraction to the fans that want to see them live. Our platform clearly displays, in Canadian currency, both primary and resale seats that are sold on a single integrated seat map. It is the only platform compliant with all provincial legislative ticketing requirements, including the upfront all-inclusive fee displays across the country.
In recent years—and I think central to the mandate of this committee—important challenges have arisen in online commerce and for ticketing platforms such as ours. The challenge, simply put, is that there are now two competing groups to buy tickets in Canada, fans and cheaters.
As ticketing has moved online and away from box offices, computing power and artificial intelligence has given unscrupulous professional ticket resellers an advantage over ordinary fans in securing the best available tickets. We call these cheaters, because their goals are, simply put, to deceive or to use illegal practices to beat fans at on-sale and take advantage of them in the resale marketplace.
The reality is that the tickets of the gross majority of concerts in this country go unsold. Our mandate, and the tools that we develop to help support that, is to actually help artists and attractions sell tickets, and to market and promote their events and careers.
These cheaters, however, are using bots to rapidly search, hold and purchase tickets faster than a human and at the detriment of fans. At Ticketmaster we have zero tolerance for bots and the cheaters that use them. Last year we blocked 60 billion bots in North America. Not long ago, that number was at five billion. We're effectively blocking five billion bots a month. There's no sugar coating it. It's an arms race and we'll continue to invest in this new norm.
Fortunately, there are ways to combat cheaters. We are the proud champion of some new tools and an ongoing innovation to help block and stop these rule breakers.
At Ticketmaster we're investing millions to develop new tools to fight these cheaters. Using bots and the complement of our ongoing innovations, it's yielding results. We are implementing tools and technologies ourselves, but we're also working with provincial governments across the country to implement pro-consumer and anti-cheater legislation. As cheaters are evolving, we must evolve to compete, and we do that together.
We are concentrating on new technological approaches that create a fundamentally different level of personalization and security, while not impacting and impeding the direct connection between the fans and the attractions they wish to see.
For example, Ticketmaster Presence is a new access control platform that replaces the physical paper ticket with a non-duplicable digital token, similar to the modernized token payment systems that you may see with Apple Pay. This platform combats fraud by eliminating the PDF ticket, which is copied and often sold multiple times. In markets where Ticketmaster Presence has been fully implemented, instances of ticket fraud have plummeted to zero. When fully integrated, Ticketmaster Presence will also allow an event producer to have better visibility and control where and how tickets are transferred and resold, and who is physically in their venues.
We've also launched a tool we named Ticketmaster Verified Fan. This is a technology that validates the identity of each purchaser before the on-sale. We call this a pre-registration process. Through this model, basic identity, such as name, email address and mobile phone number, is collected prior to the on-sale, and we use that information to predict the propensity of that individual actually going to the event as opposed to buying that ticket to resell it on any marketplace. Verified Fan has been deployed to over 100 concert tours since its first launch in 2017 and has proven highly effective. The average volume of resale postings for shows that have deployed this tool is less than 10%. This has been compared to probably north of 70% on a comparable tour that wouldn't use that tool. Springsteen on Broadway is a great example of the success of this tool.
It isn't all about technology. It's about collaboration with legislators as well. Ticketmaster has had a strong voice with the legislative bodies across the country finding solutions that protect fans. We're currently working with the B.C. government, Alberta, Ontario and Quebec, and we have successfully championed strong anti-cheater legislation that has helped ban bots, introduce strong measures to protect fans in the primary market and, importantly, the resale market.
With regard to the motion in front of this committee, and in particular the media reports of last fall, I wanted to respond directly to the false allegation that Ticketmaster has a secret broker program and that we are somehow facilitating cheaters. The claim is categorically false. It is based largely on limited understanding of a Ticketmaster product called TradeDesk.
Most people reading these reports likely thought that Ticketmaster was selling software to help scalpers buy tickets ahead of fans. Let me be absolutely clear and definitive. Ticketmaster does not have, has never had and will not ever program or build a product that helps professional resellers gain an advantage in buying tickets ahead of fans. Period. This would be categorically against the core of who we are and where we sit within our vibrant live entertainment industry in Canada, and it's simply not what TradeDesk is.
TradeDesk is Ticketmaster's version of an inventory management tool for professional sellers, oftentimes called brokers. It is neither secret nor unique to Ticketmaster. Like StubHub's product called Ticket Utils or Vivid Seat's SkyBox, TradeDesk is used by brokers to manage tickets that they already have.
All of these tools organize a broker's ticket inventory so tickets can be priced and listed for sale on various marketplaces, not just on Ticketmaster, as has been suggested. These tickets could have come from Ticketmaster; they could have come from other ticketing systems, or they could have been purchased directly from a team, venue or another reseller. TradeDesk is overwhelmingly used and managed for season seat holders in the sports industry.
Fans and attractions are deeply frustrated by cheaters, and we are frustrated, too. Ticketmaster is focused on one thing, and that is getting tickets into the hands of the real fans on behalf of artists and attractions.
Thank you very much.
Good afternoon, everyone.
Madam Chair and members of the Standing Committee on Canadian Heritage, thank you for the opportunity to speak to you regarding the ticketing industry.
My name is Jonas Beallor. I am an executive from Vivid Seats, one of the leading ticket resale marketplaces in North America. I'm joined today by Ryan Fitts, our vice-president of legal affairs.
Prior to joining Vivid Seats, I was the chief operating officer of Fanxchange Limited, which Vivid Seats acquired just last month. Fanxchange was a Toronto-based ticket marketplace focused on enterprise and distribution, powering live event ticketing solutions for major loyalty programs, financial institutions, travel and hotel operators and e-commerce marketplaces. Our Toronto office currently employs 43 people, with plans to accelerate that growth over the next few years.
We are very excited to now be part of the Vivid Seats family. Their acquisition of us is a testament to the vision and commitment to invest in the Canadian market and thriving tech ecosystem.
It's a pleasure for us to be here today, because we are certainly proud of the work we do in ensuring that cultural enthusiasts and sports fans have access to the events they want to attend, even when box offices and venues are sold out.
Founded in 2001, and based in Chicago, Vivid Seats processes millions of tickets per year, sending thousands of fans to live sports, concerts and theatre events every day. Central to our philosophy is the fan experience. Sports, concerts and other live events provide memorable human experiences that inspire all of us.
Historically, access to in-demand, live events was limited to those lucky enough to be able to purchase tickets the moment they went on sale. Fans who were not lucky enough to score tickets had no safe, legal or reliable way to obtain tickets, and fans who could not use their tickets had no safe, legal and reliable way to sell their property. Vivid Seats was created to solve this problem and open the door to buyers and sellers, providing fans with a familiar, safe and secure resale market destination and best-in-class buying experience for a huge variety of events across North America, from sporting events, to concerts, theatres, festivals and everything in between.
Vivid Seats is a trusted provider of transparency, accountability and choice. We hold sellers to the highest standards and increase fan participation and satisfaction in live entertainment by providing highly personalized and exceptional experiences for consumers. We provide an in-house call centre of 300-plus representatives who are available to deliver premium customer support over extended business hours. We provide a 100% buyer guarantee for all tickets sold on our site. We guarantee that you will receive a valid ticket on time for your event, or your money back.
To continue providing fans with peace of mind to purchase tickets at a time and a place of their choosing, Vivid Seats is committed to two core principles: first, every fan should have a fair chance to purchase tickets on the primary and resale markets; and second, tickets should be treated as the consumer's property, with no undue restrictions on their freedom to dispose of their tickets when and how they see fit.
Regarding fair access to tickets, we have strongly favoured bans on bots in other jurisdictions, as we believe it protects consumers, improves transparency and helps eliminate black market ticket sales. Taking it a step further, we also encourage governments in all jurisdictions to enforce these bans. At the provincial level, both Ontario and British Columbia have taken actions to ban bots, which we fully support.
However, bots aren't the only issue to keep in mind when talking about ticketing techniques that limit access for the general public. The use of holdbacks by the primary market also needs to be discussed. While we understand that this hearing is part of a study on the online secondary ticketing industry, it is essential that the committee understand that ticketing is one ecosystem, and that ticketing strategies used by the primary marketplace play a significant role in causing the frustration that fans feel when events seem to sell out instantly.
Some primary ticketing providers use holdbacks as the initial on-sale, meaning tickets are often held back for artists, sponsors, fan clubs, etc., leaving only a limited number of tickets to be resold or released to the public. This practice leads to significant consumer frustration. I'm sure that you, as legislators, hear this complaint from your constituents. The Toronto Star published an article on September 18, 2018, which described this practice in great detail. We recommend that the committee review this article.
We believe there needs to be more transparency concerning initial ticket sales. In other jurisdictions, Vivid Seats has encouraged governments to require the disclosure of the number of tickets that are placed on sale from the primary ticket seller at any one time. Ontario has recently introduced legislation requiring the primary market to share this information and Vivid Seats is supportive.
Regarding ticket transferability, we believe that fans should have the right to use or sell their tickets as they see fit. As the ticket sale market is almost entirely online, consumers require choice and flexibility to manage their tickets, whether that's being able to easily email a PDF file of a ticket to a friend or family member or have the ability to print the ticket on a piece of paper for someone who wants that ticket in their hand. Vivid Seats fully supports efforts to ensure that consumers have this ability.
Ticket transferability upholds a consumer's right to transfer tickets to friends and family or sell extra tickets on the open market. It also prevents anti-competitive behaviour and fosters competition in the ticketing industry.
It is the competition that encourages companies to innovate and maintain high service standards. Consumers should be able to use the ticket platform of their choice and be protected from anti-competitive conduct and artificial restrictions that interfere with their ability to discover and sell tickets in an open, competitive market place. That's why Vivid Seats believes that ensuring ticket transferability is essential to any effective regulatory framework.
These are the kinds of issues that Vivid Seats is engaged with and this is why we are pleased to be here today to speak about them with you. Canadians have been engaged in these issues as well. The Government of Ontario has recently brought in amendments to the Ticket Sales Act in Ontario that strongly balance acting against bots and lack of transparency in the initial on-sale process with encouraging innovation and consumer protection.
We are committed to working with legislators like yourselves, government, regulators and industry to ensure a fair and safe online ticket marketplace.
Thank you for giving us the opportunity to speak with you today about Vivid Seats and our approach to working responsibly in this industry. We would be pleased to answer any questions you may have.
I would say that that's too specific a view on the issue in that the artist.... Even if you look at sports independently from touring attractions, in the sports example, the team ownership has a goal to sell out all tickets throughout the whole season. They may first try to sell them in a series as a season bundle, or if they can't sell out the entire season to season seats, they may choose to bring it into bundles and then to singles. That might account for why the inventory looks different over time. Then, in touring attractions, every one of these attractions is their own business. They make their own decisions. Really, as an industry, we should update our nomenclature in that we've called them pre-sales, but gone are the days that you would call that any different. A fan is no less important if they're a loyal member of the fan club, a radio station, a sponsor, a venue, etc., than someone who understood this by talking to their neighbour.
The idea that we're somehow grading fans is what is missing there, because those are really direct marketing channels trying to get the word out with clutter and traffic in people's everyday marketing pings in the digital space. The idea that those are holdbacks isn't actually.... That's not across the entire board, and the scope of that, I guess, just for context, is that technology can sell stadiums out in minutes, so 100 tickets or 50,000 tickets can be sold in a millisecond.
Again, I think collectively our goal is awareness about buying safe. Consumers wouldn't tend to go to somewhere on the street and use cash to buy a pair of shoes. Maybe that's different, a bad example, but the idea is that you wouldn't, in other spaces, think about not knowing who you're buying from. Maybe shoes on the street is a bad example, because maybe you do that, but the idea is to go to a trusted place where you know that there's, if not a guarantee to get you into the venue that you want to get into, at least there's a money-back guarantee. It isn't necessarily possible for every secondary marketplace to have a guarantee to get you in, but it is possible for every site to have a money-back guarantee.
Thank you, Madam Chair.
Thank you to the witnesses for being here.
Ms. Tarlton, I missed the beginning of your statement, unfortunately, because I was with a journalist outside. If she had only known how much I wanted to hear what you had to say!
I don't know if everyone knows this, but you are from a long line of Tarltons in the music field in Canada. I want to thank you for everything you have done, and I think that your family has earned a good living from it. The vision you have had over all of that time, both at the family and personal level, was about the production of shows. I think that it was for that reason that you were inducted into the Canadian Music Hall of Fame. I'm very happy to meet you here at the Standing Committee on Canadian Heritage.
You were also instrumental in the building of a network of show venues and to putting procedures in place. You introduced the concepts of the production and dissemination of shows to that environment, among other things. I just want to ask you if you think that the users are well served. Is this to their advantage? Are you able to give me a fairly objective view of the situation?
In my opinion, any type of arrangement—for instance we hear that it's become easy to buy tickets; you can exchange your AIR MILES for them—seems a bit beyond the pale. But what I mostly hear is that the cost of tickets is going up.
I'd like to hear your thoughts on all this.
Thanks for that. What's the commission? No, it's okay.
The reality here is that this is my biggest problem. In all these new ventures coming into our market, you guys—not “you guys”, I'm sorry—come in from other countries or just south of the border. They come in and grab some economic activity, which is totally fair. It seems to meet the needs of the audience, the needs of the consumers, but what stops you from, let's say, at least incorporating and declaring all the sales, as Ticketmaster does?
I don't think I'm crazy about all this resale stuff, to tell the truth, but it's a tendency. I think for taxi drivers, Uber is a real storm and it shook the situation a lot and there are some good things about Uber. But the first thing is this. If you do business in Canada, do you plan to incorporate in Canada and declare your income tax, as companies in Canada pay income tax, hire Canadian employees, contribute to the hospitals and roads?
I'll answer the second question first.
TradeDesk is an inventory management tool. The allegation that it is a tool that's used to purchase tickets is false. That's not the purpose of the tool whatsoever.
I go back to my remarks as well, in that Ticketmaster does not have a tool that facilitates the mass purchase of tickets for brokers or anybody else for that matter. The technology that we have in our primary system is deployed by content owners, for example, artist tours, venue operators and promoters. They will set the rules as to how many tickets to a given event can be purchased. Largely, it's high-demand events, so we're talking about six, eight or 10 tickets. At that point, our responsibility as the primary ticket seller is to block those bots that I spoke of, at the rate of five billion bots in North America a month. We block them from infiltrating the system and from trying to access more than that. We have had success to the tune of those kinds of numbers and the magnitude of blocking the bots. If we have determined that those tickets have been purchased by a bot that somehow infiltrated the system and pulled the larger tickets, the complement of provincial legislation that makes the use of bots for purchasing tickets illegal is helpful. It allows us to cancel those tickets and put them back into the hands of fans. To answer the TradeDesk question, it's not a tool used to purchase tickets. From Ticketmaster's perspective, we follow the rules of the content owner on any given event.
Your second question was about our position in the resale space, if I understood you correctly. Our position is to integrate primary and secondary in order to offer choice to that consumer and to give them full visibility into their options to buy safely. If they buy a ticket from a fan who posts on our site, beside the other ticket that could be sold by the venue, that ticket is guaranteed to get them in because we'll cancel the original ticket and issue them a new ticket. Today we use bar codes; in the future we could use security tokens of another sort.
That's a very fantastic question, in that the provinces have acted on ticketing legislation in large measure as an outcropping of the Tragically Hip tour in 2016, where it was very obvious that there was more demand than supply. From there, it opened a dialogue across the country on what we can do about this, because it is a global issue. In part, we talk about the productivity of bot legislation. The taxpayers don't expect governments to go and find the cheaters who are out there in foreign countries, but to have that level of language in the legislation allows us, as industry, to combat it and to at least cancel, for example, if they do infiltrate the system.
As for what we can do in sync at the federal level, in the United States, for example, there is the federal BOTS Act. We could maybe become more consistent across the country with some of this language, so that it goes at a more macro scale as opposed to trying to combat a global issue on a regional scale. Bots would be an example.
The speculative posting is another real problem for consumers. By that, as I think we mentioned earlier in the conversation, we mean looking for a ticket that doesn't exist. We do see a lot of that. Even as the primary ticket company, we may get asked a question by a consumer about why a ticket is available on this site and is not available on ours or is not on sale yet. It's because that ticket doesn't exist. The language around speculative postings is very valuable.
There's another interesting thing to think about from a heritage perspective. I reflect on how in Ontario there was a temporary portion of time before the tax was harmonized when there was an element of an exemption on the amusement tax if you had Canadian content opening for a major attraction. That's an interesting thing for us to maybe consider elaborating on. What could Heritage Canada do? What could it benefit? How do we continue to build out Canadian content?
We can think about it in the opposite sense in terms of provincial legislation if done wrong. Arguably, we would have a different position than Vivid does on the most recent regulations in Ontario, in that it looks like the unintended consequences of some of these new regulations actually enhance the cheaters market and are not pro-consumer. The idea is that if you put too much restriction on a free market, a global market, then touring attractions may just choose not to come to Canada. We've come at it more on keeping it open. Let the best technology and the best attraction attract the most consumers.
We think about it that way, but if you flip it around, the negative consequence of less touring traffic is less opportunity for Canadians, and maybe we can enhance that by saying that we'll put some Canadian content in front of the American attractions or the international attractions that are coming.
Sure. I guess I want to push back about the new regulations in Ontario facilitating cheaters; I think she might be referring to the possibility for ticket transferability. I don't think somebody who can't make an event and needs to resell their ticket is a cheater. This new language would help fans resell tickets.
The Ontario legislature has required the disclosure of holdbacks, and while venues certainly have the right to offer their tickets for sale as they see fit, I think it causes a frustrating experience for fans when they don't understand that only half of the seats in a venue are being put up for sale. I want to talk about that very briefly.
Generally speaking, I think it's been a bit of a mixed bag. For example, Ontario initially had a price cap, and I feel that a price cap is a mistake for a free market. I think that pushes people off websites like Vivid Seats, which have a 100% buyer guarantee and a high fulfillment rate, and onto street corner transactions, so I think price caps are a mistake.
However, we do support the anti-bots legislation. We strongly support that. We also support the requirement that all resale marketplaces offer a buyer a guarantee that they'll be delivered a valid ticket on time or their money back. We think that's the right move, and we support that.
What is the industry prepared to do before government legislates?
I think your industry lies parallel to the privacy industry. If I am Zuckerberg right now at Facebook, and I'm staring down $2.5 billion to $5 billion in fines because every privacy breach is $40,000 U.S., and here in Canada, we have a privacy framework that fines companies $100,000 or individuals $10,000, something is out of whack.
If we were to look at legislation that would fine individuals who are responsible for running bot companies or for scalping $40,000, or held you responsible for $40,000 per ticket that was sold more than 50% over the list price, I'm pretty sure the industry would move fast.
What is the industry prepared to do to prevent that sort of thing from happening?
I'm going to focus on three areas in my opening comments. The first is about the user considerations, the second about business considerations and the third about how, possibly, to expand the market and access.
First of all, I'll talk about improvements and consistency in the user experience.
User frustration is caused by many things, most of which relate to the speed at which the tickets are sold and the high competition for these tickets, which brings the price, sometimes, very high. This is, of course, for the most popular shows. There will never be enough tickets to meet demand for these shows.
Online ticketing has many aspects, and prices change rapidly, going both up and down. On websites, there is sometimes indication that the price will vary. Sometimes that's in pop-up windows on screen, sometimes it's in the terms and conditions of purchase and sometimes it's in other places, but this is inconsistent. The user experience is not consistent, and having a persistent reminder that this change in pricing is the nature of ticket pricing would help users remember that this is a very competitive market.
Users have some methods to shape their own user experience. For instance, if there were legislation that said there had to be pop-ups, users can choose on their own to block pop-ups.
I have some screenshots if they're useful for the conversation later and for your questions, but you can easily see by looking at these sites that if you'd looked on, for instance, Ticketmaster for the Raptors game seven the other night, you'd have seen there were no tickets available. However, if you'd looked at StubHub for the same game, you'd have seen there were tickets available. Even the StubHub Canada site has prices in U.S. dollars. These are all things that can be addressed to make the user experience more consistent and clearer.
The second area I'd like to look at is the business considerations: operational concerns for live business promoters and for ticketing companies. The term “slow ticketing” has come into use. This term is used to describe a practice where the instant gratification aspect of online shopping is intentionally slowed down so that the event organizers can have some control over which category of ticket buyer can be first to purchase tickets for an event. By using slow ticketing, the event organizers understand that, by slowing down the sales process, they may make less money on the event than if they let sales happen at the fastest rate set by ticket demand.
In order to decide whether to continue using a slow-ticketing strategy, one question I raise is how businesses would measure the slow-ticketing strategy's success. For example, there would probably be fewer sold-out shows, but the total revenue might be higher because the top ticket prices might be higher.
Also, the slow-ticketing strategy may lead to more show cancellations by promoters because of low ticket sales, since buyers may think they should wait, in case prices go down. This type of cancellation might reduce the overall number of ticketed events and might reduce the overall revenue for the industry.
If improved and targeted artificial intelligence increasingly personalizes online ticket selling, what's the most important future benefit for ticket sellers, and where do online ticket sellers see the greatest value in developing new artificial intelligence tools for their industry? This relates to ways in which the government might support advances in AI in this business.
Another thing to look at is what the main behavioural differences are between sports and music ticket buyers. How could or should an online ticket seller tailor the buying experience differently?
Finally, in this section about operational considerations for visual art, in some countries there's a resale right. What this means is that every time a work is resold, the original artist receives payment. Information about this type of resale right is available on the CISAC website. We could think of this right to be eventually applied to the resale of concert tickets.
The third area I'd like to look at in my opening statement is expanding the market, expansion of access. Since there won't be enough seats for everyone who wants to attend a blockbuster event, the live industry could look at ways to expand access, for instance, simultaneous broadcast into theatres where people could gather with friends to enjoy a communal experience with high-quality sound and wide-screen image. Ticket sales for the in-theatre experience would go back to the performers and presenters of the show.
For sports, there already is an infrastructure for this that provides, via TV networks and sports leagues, both in-home and in-group, such as sports bars, those types of locations for people to enjoy the event live. The one thing to think about would be, how could this work for the non-league entertainment industry that is live music?
Thank you, members of the committee, for the time and opportunity to speak to you today.
As mentioned, my name is Jesse Kumagai. I'm the director of programming for the Corporation of Massey Hall and Roy Thomson Hall. We are a charitable, not-for-profit arts presenter in Toronto. We present concerts in our two iconic concert halls and in other venues throughout the market we serve.
In addition to being a concert promoter, we also invest in the future of our audiences and artists, with significant investments in our education and outreach initiatives as well as in several artist development programs.
In addition to my professional work, I also want to share that I serve in a volunteer capacity for a number of Canadian music organizations, including the Unison Benevolent Fund, which provides emergency relief for members of the music community, especially musicians, experiencing times of crisis. I'm on the board of the Polaris Music Prize which, through a juried process, celebrates and recognizes great Canadian recordings based entirely on artistic merit, with no concern for commercial success. I'm the board chair of the Canadian Live Music Association. You heard from our president and CEO, Erin Benjamin, earlier in these proceedings.
The reason I give you this additional context about me is to hopefully underscore the fact that I'm coming at this from a perspective in which we value the artists and the fans in a very significant way.
In terms of the ticketing world, I believe there are really two issues at the forefront of this discussion. The first is the accessibility of tickets on the primary market. The second is the high occurrence of fraudulent and deceptive activity on the secondary market.
Speaking about the primary market first, we recognize that there is at times an imbalance between the supply and demand sides of the equation. We also recognize that at times there's a gap between the listed ticket price and what the market will actually bear. Both of these issues in many ways can be traced back to what I refer to as the artist's dilemma. A great number of artists who are ultimately very much in control of the initial ticket pricing for their events are interested in ensuring that their fan base—all of their fan base—can have access to fairly priced and accessible tickets. The problem with this is that it creates the pricing gap that fuels the secondary market.
You've likely heard from a lot of people about some of the interventions that can be used to address these issues. I don't want to spend too much time on these, other than to say that in my experience and from what I've seen internationally, the most effective solutions are those that are technological or operational and are developed and implemented by the sector. The least effective—especially internationally, when we take a look at other examples—are the solutions that are legislated, not because the laws are bad, but because they are not enforced. As we all know, unenforced laws are toothless laws.
The more significant issue, as far as I'm concerned, and the one we deal with on a regular basis on the front lines, is the regular occurrence of fraud and deceptive activities on the secondary market. These include such actions as the sale of fake tickets; people paying in foreign currencies without realizing it; being duped into thinking that they're purchasing from a primary official seller when really they're buying from a secondary seller; and hidden charges and fees. The truth is that a great number of these operators exist outside of local jurisdictions, making any sort of recourse or attempted enforcement of law very difficult or impossible under the circumstances.
You've heard this, however, from a number of people. If you'll indulge me, I've brought a few real world examples of some messages we've received from patrons. I'll omit any identifying information but would be happy to validate the authenticity of these with the committee at any time.
I'll start on the subject of supply and demand. Once again, these are the exact words of the patron and not my own, so forgive me. It is emotional.
At the end of June last year, we promoted three concerts with Gordon Lightfoot. They were the final three concerts at Massey Hall before we closed for our two-year renovation. Obviously, those concerts were in very high demand. This is the email:
You pricks. Last time I looked Gordon Lightfoot tickets weren’t on sale yet.
Now he’s sold out. Go fuck yourselves.
I share this not so much for the drama, but just to indicate that it is a very passionate subject for people and they tend to respond in equally passionate ways. This poor patron, of course, was not able to attend those concerts.
Again, in attempting to juxtapose the difference between the disappointment and upset around not being able to access tickets and the actual harm that can come to Canadians through fraudulent activity, I will share another one. This one has a happier ending, but from very different circumstances.
This email says:
I wanted to write to say thank-you very much to Massey Hall and its team for helping us out yesterday at the Blue Rodeo concert and making it a great experience.
The show was sold out, so I purchased tickets on Stub Hub. When my wife and I got into the Hall we discovered that the tickets were fakes which was such a disappointment. The staff were sympathetic and the manager (whose name I wish I’d taken to name him personally in this email), busy as he was dealing with the beginning of the show, checked on the tickets for us and gave us a complimentary pair for the show! He really saved the day!
Our inboxes are filled with stories like this. I have another example here of a grandparent of a child performing in our annual Toronto Children's Chorus Christmas concert at Roy Thomson Hall who had promised her grandson that she would attend the concert. She mistakenly ended up on a secondary ticketing site and purchased three tickets. Those tickets, which were still available on our site for $45.50 each, were sold to her in U.S. funds for $146 each, with service fees of $44.53 per ticket and a delivery charge of $7.95. The total was $579.54 for this grandmother to attend her grandson's Christmas concert. Those tickets, had they been purchased through the official box office, would have come in, with fees and everything included, for well under $200.
These examples really demonstrate the harm that does come to Canadians and why we on the front lines are significantly concerned about those shady practices and the deceptive activity and fraud that occurs on the secondary market.
Considering all of this, and recognizing that legislating this subject matter is largely the domain of the provinces and territories, I do have three recommendations to bring forward to this committee for things that the Government of Canada can do to help address some of these issues.
The first is to invest in a national awareness campaign that educates consumers on the tricks employed by the secondary market. This will result in fans being empowered to avoid fraudulent activity, being able to recognize the legitimate sources of tickets and hopefully avoid becoming victims of fraud.
The second is to invest in the technological solutions that will ensure the tickets end up in the hands of the fans for whom they are intended and not the secondary market. This is a global problem. If we can come up with a made-in-Canada solution, we will be leaders in the sector and we will all prosper as a result.
The third recommendation addresses the fact that a lot of our attention is based on the high-demand events where we do have considerable action on the secondary market and a lot of that fraudulent activity. There are so many fantastic opportunities for Canadians to experience music. We believe that the Canadian government can invest more in the live sector to improve that accessibility, to improve the quality and quantity of presentations throughout the country and generally make the opportunity for Canadians to attend live music events easier and safer.
Thank you very much. I would be happy to answer any questions.
I can respond. It's a common problem. We see it all the time.
The jurisdictional piece is a very serious one. In addition to the funds not going to the creator and not going to those who are taking the financial risk, I'll note that when the money does leave the jurisdiction, it also means it's no longer part of our tax base. There are all kinds of considerations that come into play. We lose our ability to provide customer service. If an event is cancelled or postponed for any reason, or we have to provide specific instructions for patrons, we have absolutely no ability to find them and work through that.
The challenges are numerous.
We recognize that the secondary market exists, and in the absence of enforcement, we recognize that it will continue to exist. Our interest is very much in protecting the consumer and ensuring the transaction is a safe one and that the patron will get into the venue.
There are basically three realities out there right now.
There's the reality of purchasing on the secondary market from a reseller that has the ability to authenticate the ticket. For example, Ticketmaster's platform can do that, if they are the original seller of the ticket.
Then you have the platforms that can't guarantee it's a real ticket but that offer you a money-back guarantee. StubHub is a good example of that. They cannot guarantee that you will get into the event, but if you can't, you will get your money back.
Then there's the third, which is represented by the out-of-region resellers or the person on Kijiji who took a print-at-home ticket and photocopied it 50 times to sell it.
Thank you very much, Mr. Kumagai and Ms. Moore.
Madam Moore, I think your background as described in our documentation here explains why you brought up an interesting artist's point of view, talking about resale rights. I think it's not that simple, but I also appreciate the fact that since we're at the heritage committee, we always have to see it first from the artist's, creator's and rights holder's point of view.
What seizes me now is that since we see it from the artist's point of view, as Mr. Kumagai says, I think that everybody involved in this ecosystem of artistic creation, of publishing, of show producing is taking risks. The artists take the risk of not being at work in some regular job, hoping to finally get to meet their audience and make piles of money if they're super lucky, and just make an average living, or like most artists, have to work a job on the side. The producers risk that they think this person has talent and they're going to produce their record or their show. I'm not sure, but I guess Massey Hall also produces shows sometimes.
Sometimes you just buy the show and offer the venue. Sometimes you produce the show and everybody involved in this situation is taking a risk. Even the consumers are taking a risk because they say they don't know about the artist's next album, but they loved the previous album and they hope it will be a great show, and then the artist sings all new songs and none of their classic stuff and people are disappointed. So everybody's taking a risk.
The one damn organization that's not taking a single risk here is these ticket resale hubs. Worst of all is they are making billions of dollars tax-free. I can't wait to see the study we'll have on this. If there is any income tax, it's going to be paid in the States.
My concern is that it's okay, it's human to think you're going to buy this and you think you can resell it for a profit. I did it with an MGB, and I did it with a collector's edition of Mr. Potato Head, and it's still in my basement, still wrapped. I bought it 12 years ago. Is anybody interested?
Well, thank you. After hearing this testimony, and testimony from so many others, I am ever more confused than I was when I started. I tried to think of what values we're trying to reflect. In the testimony we've heard over a long period of time—I don't know how many witnesses we've heard from—there's great variance in the values being reflected.
Some were talking about ensuring we have an open marketplace, with supply and demand organizing it, and wanting value for artists and fans, Canadian content and revenue to Canada. Tickets should remain the property of the customer or the owner. Internet sales are important. How do you keep yours safe, and authenticate them? Those are the values I've heard reflected, but the problem, I think, is focused around the sales of tickets that don't exist: the fraud and holdbacks perhaps creating a false marketplace. It is a marketplace that, with the Internet, is broadly expanding to places we can't even anticipate at this time, and bots are a challenge within that.
Given those values and problems, and that the practices we've implemented so far are minimal, I'm not sure what the solutions are. Some of the solutions suggested have been selling the right ticket for the right price, whatever that means, bot legislation and enforcement, simple resales and not holdbacks.
There were attempts from Ontario, which was going to put a cap on prices. I think the newly elected government has withdrawn all that legislation so that there's no cap. They seemed to see that as a solution. Quebec and B.C. have implemented some things.
Given that context—and you've given one example of strategies we could look at, which include tracking sellers' sales and taxation—do you have any specifics and answers we could be turning to? Given the wide range of testimony we've heard—and we're getting close to the end of that—and some of the values you're reflecting, and that we've heard, where does that lead us, in terms of practices and legislation? We've taken this on, and with the stories you've told, and the challenges there, I'm pretty confused. I'd like you to enlighten me.
Perhaps I could offer some thoughts.
One of the recommendations I brought forward, which echos what my peer here had to say, is investment in technology. As I said, this is a global problem. It's a problem that's trying to be addressed by the private sector and governments around the world.
We're moving in the right direction. You can compare with other industries. If you take a look at the airline industry, you don't have a problem of transferability of tickets, because there are safeguards in place to prevent you from doing that. I could not buy an airline ticket and sell it to somebody else and have that individual get on the airplane and travel. One of the issues for us in the concert industry is that we're trying to process a lot of humans into a very small space in a very short amount of time. For anybody who is lined up to go through a check-in at the airport, it would simply be impractical if I were doing it in a 2,500 capacity concert hall.
However, we're getting there. Technology is moving forward. Various biometric tools and a variety of different things are improving our ability to provide some technological controls over what happens with a ticket after it leaves our system. That addresses a lot of the concerns. It addresses the customer service concerns. It addresses the transferability. There are a number of positives that come with it. The technology is just not quite there yet or hasn't been implemented sufficiently. I prefer those sorts of solutions rather than the legislated ones for some of the reasons I discussed earlier.
For example, some of the values we've heard about and some of the things that have just been referenced would suggest you might want to influence what people can sell tickets for, and have a much heavier hand in controlling that side of the world. Again, at least in my world, this really does all go back to the artist and the artist's intentions. I'll remind the committee that for the popular music world in Canada, we are certainly host to a lot of international artists coming through. Even many of our own artists are represented internationally by management, booking agents and others.
At the same time, they're trying to come up with their own solutions to these problems. They're implementing them on a tour-wide basis. You have some artists like Adele or Mumford & Sons, very popular artists who are very much in control of their ticketing world. They have very specific demands for how their ticketing rolls out and what they do to curb the secondary market.
I'm of the belief that if we as a country or as a series of provinces and territories start legislating too much, restricting control over who, what, where and when of the ticketing industry, that will alienate some of those international artists, maybe limiting the number of times they'll come to Canada, limiting the number of cities they'll perform in. Those artists, in many ways, including a number of our own domestic artists, are responsible for an incredible amount of economic impact. I would just caution us against going too far.
Absolutely. There's so much misinformation surrounding this subject matter. I can't remember whether it was the province or the federal government that ran a consumer feedback poll on the ticketing question and saw record numbers of responses.
However, as I hope was demonstrated by some of what I shared with you, part of the problem is that a lot of the fans out there want to buy an official ticket from the primary source and there are a number of obstacles that get in their way to doing so.
It's a simple matter of educating the public that will address a lot of the concerns that exist here. We know when we receive patron complaints for a variety of purposes, oftentimes we're accused. They say they went to our website and bought a ticket and it turned out to be in American funds, and how dare we do this, and so on. It takes us a while to be able to get them to calm down enough to hear us and let us demonstrate that they actually bought from someone posing as our box office.
If you search on Google for Massey Hall tickets, you will probably find a half dozen or a dozen different companies, some of which might have websites that say “masseyhallticketoffice.com” but have absolutely nothing to do with us. As was the case with that Blue Rodeo example or the Toronto Children's Chorus example, you end up with scenarios where people are taking actions that they believe to be legitimate, safe and transparent and are finding out that's not the case.
Rather than trying to enforce legislation that would track down those people and prosecute them, because we know that law enforcement has more important things to do, we think the easiest way and the cleanest and most efficient path forward is simply to educate the public on what safe practices are and help them identify the unscrupulous actors that are out there.
The reality is that this marketplace has existed for decades. This is not something that was proliferated at that time. We have seen two categories of resellers out there, and again these have existed since the beginning of the concert industry. You have the professional resellers and you have the individuals who can't use their ticket, for whatever reason, and are trying to get rid of it because the industry generally has a no-refund policy. Sometimes those are people, these days, who will buy four tickets knowing they will only use two, and hope that by selling two they will cover off most of the expense of the first pair. It happens. But I don't think we've seen a proliferation of the secondary market. We've just seen it come to the surface, because it's been democratized in a way that wasn't really the case before. It used to be the guy in the trench coat standing on the corner, yelling at you as you went by. Those people used to circumvent systems by doing things like engaging homeless people to line up for them outside the record store before the on sale.... The technology and the practices have evolved. Instead of those people in line outside the record store, we have bots, and there are all kinds of other things that are trying to circumvent the control that our industry is trying to put in place.
I don't think it's a new problem. When you take a look at it with that larger lens, looking at a longer stretch of history, you recognize that there have been countless legislated interventions over the years. In this province, Ontario, up until a few years ago it was entirely illegal to sell a ticket above face value. As we all know, that did nothing to stop the secondary market, because of the lack of enforcement.
The marketplace is evolving, but I don't think the arrival of StubHub necessarily changed it that much.