Wednesday, December 05, 2007

Management companies want share of second hand goods

How would you feel if, when you came to flog your old XBox on Ebay, Bill Gates turned up and asked for a portion of the cash?

What about if you went to sell your stamp collection at auction, and discovered the Post Office hanging around outside the auction rooms looking for ten per cent on the grounds that they printed the stamps in the first place?

It wouldn't happen, would it? And yet the music industry is trying to grab a slice of profits on tickets sold on to other holders.

It's being touted as a move by bands:

Radiohead, Robbie Williams and Arctic Monkeys joined calls yesterday for a levy to be added to tickets resold on the web to allow musicians to claw back some of the profits made by touts and fans.

Really? Radiohead and the Arctic Monkeys?

Not quite:
The acts' managers, together with about 400 other artists, including KT Tunstall and the Verve, said the move was vital to bring some regulation and rigour to a market they described as "the wild west".

Ah. So it's management, not actually bands, then.

The idea is to form a 'Resale Rights Society', which is being headed up by Marc Marot who was quite senior at Island Records a few years back until his circumstances changed; this body will, for some reason, insist on being given a portion of ticket sales on eBay and through secondary markets:
Marc Marot, chairman-elect of the RRS and the former chief executive of Island Records, said the levy proposal was a "grown-up solution" to a "completely unregulated area".

"The secondary ticketing market offers benefits to music fans and the live music industry alike. It does not make sense to try and criminalise it," he said.

Here, we totally agree with him. Making it a crime to sell something you have legally bought is absurd.

We think we're about to part company with him, though:
"On the other hand there are real issues of consumer protection here. It is unacceptable that not a penny of the £200m in transactions generated by the resale of concert tickets in the UK is returned to investors in the live music industry."

So the "real issue of consumer protection" is that, erm, no money goes back to the music industry? Isn't that an issue of music industry self-interest rather than "consumer protection"?

Let's split out that contention into the two separate pieces it clearly is. One, the issue of "consumer protection". Now, it's true if you buy a ticket on eBay, there's a chance it might not show up - although if you pay through PayPal or Credit Card, you have a degree of consumer protection, and many of the secondary agencies are large organisations; you have recourse to the trading standards just as when you buy anything else. And even if you didn't, how does giving a slice of your purchase to the music industry make you any more protected? Unless the RRS is proposing to set up a fund to recompense people who lose out if deals go bad - which sounds a splendid idea to us; something of a licence to print money for fraudsters who could offer tickets that don't exist, their conscience clear as the defrauded will get paid back from the RRS? We bet this isn't what the RRS has in mind, and the 'consumer protection' line is just an attempt to make a spot of highway robbery seem more acceptable.

So, then the complaint that "no money is returned to the live music industry". Well, no; nor do the Post Office get any money from the sale of rare used stamps. Even Paloma Picasso finds she doesn't get a few quid when one of her Dad's paintings are sold. The music industry sets the price for tickets when it places them on sale. If they feel the price of the ticket doesn't represent a fair return on their investment, they should raise their prices. Why should they be rewarded for underestimating the value of their tickets? Why should they make money off people who have decided to risk their cash in the hope of making more? Either these businesses embrace capitalism, or they don't.

The RRS seems to be like a welfare organisation designed to help rich businesses that have simply underestimated the value of their products.

Not, of course, that they seem themselves like that - as with the RIAA trying to tax filesharing, the RRS claims they're interested in the little artists:
Marot said the move was not intended to boost the bank balances of big names such as Mick Jagger and Sting but to help new artists who increasingly make less money from recorded music sales and rely on income from gigs to make a living.

Now, since Marc is not a foolish man, he must clearly be spinning here. Does he really believe that new artists' tickets are being sold on eBay for massive profits? That the Secondary Ticket market is awash with sales for Cats and Cats and Cats at the Leicester Princess Charlotte? Of course this is about making money for management companies of large acts.

It's also totally unjustified. Marot is right - don't criminalise people for selling second-hand goods. There's absolutely no reason to. There's even less reason to tax them on products they've legally purchased.

[Thanks again to James P]


ian said...

I bought a ticket at less than face off a bloke outside a gig the other week. Presumably Marc Marot has already put a cheque in the post to him for a share of the loss he made?

Paul Wells said...

and how exactly do they think they are going to enforce this 'levy'?
However, I'm not too happy about the 'let the market decide the price' model for tickets either. How happy would we be if the industry decided to auction off its own tickets to the highest bidders? This would mean the only people who got to go see a limited number of gigs by a popular artist were those who could afford to spend huge amounts on a whim. The rest of us would have to suffer watching cut-price snow patrol shows....

Anonymous said...

The secondary ticketing market is a convenience for people who can't be bothered to monitor what gigs are coming up, or who decide at the last minute they want to go. Like most ultra-convenient services, there is a price attached. If you don't like it then get up earlier in the morning.

Although ebay has contributed vastly to the expansion of this market, making it more necessary than before to buy very early if you want normal price, by the same token technology has given us artist websites and email alert systems that enable you to keep yourself informed about when gigs are announced and tickets go on sale. Funnily enough the industry never ever remembers to mention this when they're bleating about touts. But then well informed consumers don't generate them any extra cash do they?

Simon Hayes Budgen said...


Personally, I'd not want a free market in tickets; I just think its slightly hypocritical of the music industry, a capitalism tooth-and-claw business, to suddenly have a fit of vapours when capitalism starts to work - well, not even against them, just without them.

To be honest, though: the way it is now, successful artists are pricing their shows out of the reach of people on lower incomes. The best hope many of us have of getting to a stadium show is hoping the ticket prices slump when they hit eBay.

mikeh said...

Agreed with that, Simon - the price of the latest batch of Radiohead tickets being a case in point.

Unknown said...

20,000 / Marvelous China Stamps Collection for 0.01$ starting price

Or just go to eBay site -
And search for 300177769089 (auction number)


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