Evidence of meeting #156 for Canadian Heritage in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was market.
A recording is available from Parliament.
Liberal
The Chair Liberal Julie Dabrusin
Mr. Nantel, our study is on the online secondary ticket sales industry, and our witnesses only prepared to answer questions on that topic.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
In that case, I have no further questions and I thank you.
President and Chief Executive Officer, Canadian Live Music Association
I will happily give you my card, though, and we can set up a meeting.
Liberal
Anju Dhillon Liberal Dorval—Lachine—LaSalle, QC
Thank you for coming today and testifying about this.
First, how has ticket resale affected artists individually and the music industry in general? Either one of you can answer the question.
President and Chief Executive Officer, Canadian Live Music Association
Go ahead.
President, Outbox Technology Inc.
As Mr. Nantel pointed out, it's really a consumer issue. The artists might feel deprived of the upside, the revenue that he appears to be missing, but at the end of the day he selected the price of the ticket so he inadvertently enabled this latent markup to exist to be executed in the secondary market. While they don't like it, they're not direct victims of this, in my uneducated opinion.
President and Chief Executive Officer, Canadian Live Music Association
Artists...?
President and Chief Executive Officer, Canadian Live Music Association
I don't know. I think I would disagree a bit with that. Artists don't like it when their fans can't get in the building, and also in fraudulent resale none of that money is being directed back to the artist. They're being completely cut out of the food chain, and that is not okay.
It's hard. Artists work with promoters and venues and their management teams to try to figure out the best way when it comes to on-sales and fan clubs to make sure the tickets are getting into the hands of the actual fans. It's tricky. There is a lot of pressure on artists right now too, and you're so right about fair market value. A lot of artists do not price their tickets at what they are worth. Look at the Tragically Hip. People were selling those tickets for upwards of $5,000 to $10,000 for the final show in Kingston, and they were getting it, no problem. If there had been another 100,000 tickets they would have sold. If there had been 200,000 tickets they would have sold. This is the supply and demand issue, which will never go away.
Actually, Taylor Swift is a good example of an artist who has leveraged the notion of dynamic pricing and has increased her ticket prices again to attract the real fans to make sure those tickets are getting into their hands, but to also decrease the incentive for fraudulent resale.
There is a lot of pressure on artists to increase their prices and they won't do it often, and then this is part of the consequence of that. It is something that the industry has to navigate and manage, and also I would say, representing the live music industry, we don't like it at all when money leaves the industry either. It's not good for promoters and venues.
It's a hard enough business as it is. It's one of the riskiest businesses you can be in. There are never any guarantees for the promoter. There is very little opportunity for them and they are incredibly entrepreneurial, in many cases, small businesses in this country who work really hard to connect artists with fans. Ultimately we look to the partnership we have with ticketing companies and other members of the team with the artists to figure out the best strategies to decrease the potential for fraud on every major show.
I would like to add, however, it is important for this committee to note that for high-demand shows, we're talking about maybe 1% of all concert tickets sold in Canada in a year. That, of course, attracts the most attention because all of us want to go to that show, but there is a lot of concert activity that is much less impacted in this country by this issue.
Liberal
Anju Dhillon Liberal Dorval—Lachine—LaSalle, QC
You said you have sat with artists and producers and other creative people in the industry. What solutions have you come up with, especially considering the advancement of technology and how easy it is to replicate these tickets? As we're heard from our colleagues and you, when somebody ends up coming to the door and they can't get in, it's very sad. I have a family of five who paid around $900 online thinking it was real. It looked legitimate.
With the technology how do we protect people? What have you come up with within the industry?
President and Chief Executive Officer, Canadian Live Music Association
I would add too that the family that spent $900 on concert tickets may have a babysitter. They may have bought airline tickets, booked a hotel room and went out for dinner, all of those things. It could be just devastating.
I'll refer to some of the things I mentioned that our members are working on. Ticket authentication technology is critical so that when you buy that ticket it actually belongs to you and can be tracked, and if there were an issue, guaranteed refunds are in place with money-back guarantees. We're making it much easier for fans and ticket buyers to understand all-in pricing, buying in their local currency. What I'm talking about is in the primary market, or even in resale, legitimate companies that are providing that service, whether it's primary or secondary, making sure that from a fan perspective you're buying from a reputable source.
On the public awareness piece, a lot of our members do that to a certain extent on their own. There is no really comprehensive campaign at this point. We need one, but in terms of educating fans I think that for venues—and I can certainly speak for some of my members—often on their websites you'll find policies and suggestions and FAQs on how to buy safely to prevent that kind of thing. Then again, there is working with legitimate ticketing companies, which are investing millions of dollars in the kinds of technologies that circumvent some of the bigger issues like bot technology.
Liberal
Anju Dhillon Liberal Dorval—Lachine—LaSalle, QC
As a federal government, what can we do to help protect not just the consumer but the artist, who is very affected as well—you explained this in great detail—and the producers and everybody who works around them, who invest and don't get back what they have earned?
President and Chief Executive Officer, Canadian Live Music Association
To your point earlier about fraud, the way we look at the things that can actually prevent and then allow the industry to respond to fraud is important. Consulting with the industry is important. If this is a thing for this committee in the long term, then let's sit down and figure out all the stakeholders we need to be talking about and let's have a big think. Everyone's talking about it, but no one has really nailed it yet—and there are many stakeholders. You will be talking to a very diverse group—I've seen the list—and everyone is bringing something really important to the table.
It's a great question. Our artists in this country are incredibly important to who we are as Canadians, and we need to be doing everything we possibly can to make sure that they can make a living and that our fans can be there to support them. There will be some question marks at the end of this process. One thing we can do together is to keep talking.
Liberal
Conservative
Martin Shields Conservative Bow River, AB
Thank you, Madam Chair, and thank you to the witnesses for being here. It's a topic—and I thank you for suggesting it—that's going to be of interest.
We don't have some of the powerhouse Canadian entertainers. I remember Garth Brooks, when he wandered through our part of the country. He did one concert, and of course the price of the tickets was nuts. The next time back, he said, “I'm going to fix this”, so in Calgary and Edmonton he did six nights each to saturate the market so that everybody could get in, and he said, “Do a reasonable ticket price.”
He thus fixed it himself, but there are not many powerhouses out there who can do so.
You talked about sports. The Blue Jays have gotten themselves into a little trouble because they were just offloading tickets and getting kickbacks. That doesn't do them well in the PR sector, but how many other sports teams may be doing this? I don't know.
Do you have any thoughts? The Blue Jays can't be the only ones.
President, Outbox Technology Inc.
In North America there is a trend to sell, basically, bulk season tickets to brokers. Most teams do it—it's legal, of course—and then these tickets flood the secondary market, sometimes at a loss, sometimes at a gain, mostly in the playoffs. It's the economic game happening, and it's adjusting—
Conservative
President, Outbox Technology Inc.
I'm not familiar with that particular instance, but there is a market for teams to sell to brokers. I think it will adjust itself as the brokers overbuy and lose money and adjust. It's just economic law at play. Since there is no constraint, it's just the economics, which work themselves out.
Unfortunately, I'm not familiar with the details fo the situation you talked about with the Blue Jays. I don't know about the Blue Jays.
Conservative
President, Outbox Technology Inc.
I'm waiting for the Expos to come back.
