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
Wayne Long Liberal Saint John—Rothesay, NB
Mr. Brousseau, earlier you talked about a distinction between ticket brokers and ticket resellers. Can you clarify that again?
President, Outbox Technology Inc.
I talked about reseller channels.
A reseller channel doesn't own tickets. It's just a website. I think StubHub would present themselves as a channel, not as a broker. They'll speak eventually, but from my understanding of their business, they are a channel.
A broker is somebody who buys tickets and then might operate a website. I know of sellers who are also brokers in some smaller markets, but those are two different things. One has a financial risk and is probably exceeding the purchase limits when the show goes on sale to get more supply, and the other one is just a channel.
Liberal
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
You also talked about secondary ticket sales and market failure. Do you think that secondary ticket sales bulk buyers are taking advantage of that failure? You're saying they should match price with demand.
President, Outbox Technology Inc.
All I'm saying is that if there's a secondary market with three times the markup, it's clearly because the original sale occurred at too low a price for the market. It might be a voluntary decision on the part of the agent or the act, but it's just a statement. If you sell a ticket for $100 and it sells two days later for $300, clearly you left money on the table. You might have good reasons but clearly—
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Is there anything we could do as the federal government to address that market failure to regulate?
President and Chief Executive Officer, Canadian Live Music Association
I can't imagine right now how that would work, telling an artist what they'd have to sell their concert ticket for, and besides, market value is always changing. It's fluid and sometimes you can predict it with some certainty but other times not. Remember I said we're talking about 1% of concert tickets, so it would be weird to have something you would apply just to the high-demand shows.
This has always been the way. The reason this is an issue now in this country is technology. When you used to line up, you'd run to the pay phone and dial 1-800-Ticketmaster or whatever to get in the queue to buy your tickets with your credit card, or you'd stand in line at HMV or Sam the Record Man six blocks away, hoping you would still get in the door to buy your tickets. We can't see the lineups any more and the way technology has evolved has been a convergence of all kinds of things. This is not going away. I do not think that regulation or certainly over-regulation is the answer, or regulation that would prohibit this growth and the organic nature and the excitement, frankly, of big high-demand shows.
It's part of the culture of big shows too, whether we like it or not. There are people who have all their friends lined up with laptops, pressing control-F or whatever to refresh, trying to get in, they're all trying to just be able to buy the four tickets they're allowed or whatever. That's where we are today and Canada is certainly not alone in that fact.
Liberal
The Chair Liberal Julie Dabrusin
Thank you to both our witnesses. It's been really helpful to hear a good start to the study we're doing.
President and Chief Executive Officer, Canadian Live Music Association
Thank you so much for inviting me.
Liberal
The Chair Liberal Julie Dabrusin
We're going to suspend briefly so we can get the next panel together.
Liberal
The Chair Liberal Julie Dabrusin
We'll start again.
We now have with us from StubHub Paul Nowosad, general manager, Canada, and Laura Dooley, head of global government relations .
By video conference, we are hearing from Philip Vanden Brande and Evelyne Langlois-Paquette from L'Équipe Spectra.
We will begin with you, L'Équipe Spectra. Sometimes we have technical difficulties, so I prefer that you go first. You now have the floor.
Philip Vanden Brande Senior Manager, Public and Media Relations, evenko, L'Équipe Spectra
Madam Chair and members of the committee, thank you for the invitation.
My name is Philip Vanden Brande. I am the senior manager of public and media relations for Groupe CH, as well as the company's spokesperson.
Through its live entertainment divisions evenko and L'Équipe Spectra, Groupe CH is Canada's leading event promoter and festival producer, presenting over 1,500 shows and major festivals yearly, such as Osheaga Music and Arts Festival, Festival international de jazz de Montréal, Francos de Montréal, Heavy Montréal, ÎleSoniq, '77 Montréal, Montréal en lumière, Nuit blanche à Montréal and others.
Groupe CH events attract millions of happy fans every year, hundreds of thousands of whom come from outside Quebec and Canada, generating tens of millions of dollars in economic windfall for the community. Groupe CH also manages several venues in the greater Montreal region, including the Bell Centre, Place Bell, MTELUS, Corona Theatre, l'Étoile and l'Astral. With its artistic agencies, evenko and Spectra Musique, the company also devotes itself to the professional development of several Canadian artists.
Groupe CH also holds a major stake in the activities of Groupe Juste pour rire, which organizes the biggest comedy festival in the world every year. The festival Juste pour rire/Just for Laughs Festival is internationally renowned in the French and English comedy markets.
I will begin with a bit of background.
Concert ticket sales practices have evolved since the beginning of the digital era. Exclusive presales are often offered to the artist's digital community, to some credit card holders, or to the subscribers of certain newsletters.
For instance, evenko provides exclusive offers of $20 tickets to the subscribers of its newsletter during national concert week. Subscribers of the Festival international de Jazz de Montréal newsletter also receive special offers for the indoor concert series. Digital ticketing systems have also evolved in leaps and bounds over the last few years thanks to the innovations of technological providers, who have equipped their platforms with digital waiting lists and anti-fraud mechanisms to block bots. Generally, the scope of Groupe CH's activities allows us to work with reliable ticketing partners, who are able to invest important sums in anti-fraud research and development.
I will now share our findings with you. All these advances have made it possible to increase Canadians' access to their favourite artists. In Quebec, the access of citizens to live entertainment has notably been increased by the strengthening of the provincial Consumer Protection Act in 2011 and 2018. The company supported the additions to this new law completed in 2018 and is happy about its underlying egalitarian motivation. However, its enforcement relies on limited government resources, which deserve to be improved.
In order to comply with that law, Quebec ticket resellers must ask for producers' permission to resell tickets on their platform. However, these platforms can create confusion among buyers, by often mimicking the visual look of the original ticketing service. They hinder consumers' search for information by sometimes even appearing before authorized vendors in search engine results. The high prices displayed by these resellers may undermine the trust of Canadians towards their entertainment industry, while also affecting artists, potentially hurt by their fans' inability to find tickets at a fair price.
It is important for us that Canadians have simple, efficient access to live artistic performances. Concert tickets are experiential consumer goods that give access to unique irreplaceable entertainment. We encourage Canadians to always purchase concert tickets from the official source, which allows them to avoid fraud risks. Our company directly makes available to the public a large percentage of concert tickets via our official box office. Limited quantities must still be contractually reserved for the artist's entourage or other artistic partners. When those tickets aren't used, they are sometimes put up for sale to the public.
We care about the complete experience of consumers, which should be enjoyable from the purchase of tickets to the end of the performance. However, the great popularity of some artists implies that some shows can sell out very quickly. Financial and logistic considerations limit the number of performances that can be produced, even when demand is overwhelming for a popular artist.
The problem of ticket resale at inflated prices is also fuelled by fraud. Some resellers manage to bypass the anti-fraud protection mechanisms to purchase batches of tickets that are then resold for profit, with the help of bots. The latter cause inconvenience to our ticketing systems, despite the technological measures implemented by our partners.
We are also regularly faced with ticket counterfeiting, which causes distress to some consumers when they arrive at the venue with unusable fake tickets. These swindled buyers are under the wrongful impression that they got them from an authorized vendor. In reality, they were fooled by individuals or platforms that didn't clearly display their reseller status. This kind of a situation directly damages our reputation, by using our brand and our credibility for the wrong purposes. We actively collaborate with the police when such cases are discovered.
In light of our findings, here are our proposals.
First, we encourage governments to use every measure at their disposal to guarantee that Canadians can primarily deal with the official vendor of an artistic performance. Furthermore, the official point of resale should always come up first in search engine results.
Second, since denial of admission at a venue caused by fraud causes dissatisfaction and frustration for Canadians, we encourage all secondary resale platforms to adopt a full refund policy.
Third, we prompt governments to crack down on cases of fraud. This includes ticket counterfeiting and transactions with bots. If the identity of the owners of resale websites were more widely disclosed, it would certainly be easier for the police and courts to crack down on fraud.
Last, we want resale platforms to clearly indicate that they are not the original ticket source.
Thank you very much. I am available to answer any questions you may have, in English or in French.
Liberal
The Chair Liberal Julie Dabrusin
Okay.
Thank you very much.
Now we will go to StubHub, with Paul Nowosad and Laura Dooley.
Paul Nowosad General Manager, Canada, StubHub
Good afternoon.
Madam Chair and members of the committee, my name is Paul Nowosad. I'm the general manager of StubHub Canada.
StubHub was founded in 2000 and was later purchased by eBay. Our offices are based in Toronto, where we have nearly 170 employees as part of the eBay, Kijiji and StubHub businesses.
It is my pleasure to be with the committee today to discuss our business, the global event ticket market and issues impacting fans' access to live performances. I appreciate the opportunity to present StubHub's belief that a transparent and competitive market is in the best interest of fans.
StubHub revolutionized the secondary ticket market. We took a market that traditionally operated on street corners, without consumer protection and, for the first time, provided a safe, transparent alternative for fans to buy and sell tickets online.
Today, StubHub is a global business that operates in more than 40 countries, and we are proud to provide our customers with the highest standards of customer protection anywhere in the ticket market. Our commitment to the customer interest is why we have earned the trust of fans and have more than 2.4 million registered users in Canada. Our StubHub website and customer service is available to all users in both official languages.
Our users are protected by our industry-leading fan protect guarantee, which assures that in those rare instances a problem occurs with a transaction on our marketplace, ticket buyers are provided comparable or better replacement tickets to the event or, when that is not possible, a complete refund inclusive of fees. Our fan-first philosophy is paramount to our business.
StubHub is a proud partner with major leagues, universities, teams, venues and artists around the world, including the Toronto Blue Jays. We prioritize investing in our fans, in the communities where they live, and in the music, theatre and sports landscapes. Last month StubHub enhanced our Toronto Blue Jays partnership by creating a fan experience at their exhibition games in Montreal. As part of this event, we were proud to bring the young athletes from amateur baseball associations to the game.
Today, we are hosting a free concert during Canada Music Week in Toronto. We're including in this benefit the kids from the MusiCounts program. We are a supporter of MusiCounts and their mission to bring music education to kids across Canada.
Our mission at StubHub is simple: Connect fans to the joy of live events. StubHub creates additional choice in the marketplace and enables fans to transact on their own timelines, and we provide a trusted platform to purchase tickets in cities or countries where users are less familiar. We believe that a fair, secure and competitive ticket marketplace unequivocally supports the interests of fans. Competition in the market provides fans greater access to the events they want to experience and the ability to purchase tickets at a fair and market-driven price.
As the committee studies the issues of ticket access for Canadian fans, StubHub strongly encourages you to examine the industry holistically, and to tackle a range of issues that are impacting fans today. Increasingly, the primary and secondary markets are blending. In many instances, artists' teams, venues and ticketing companies are participating in both the sale and resale of tickets. Further, there are an increasing number of anti-consumer, anti-competitive ticketing policies and restrictions in use today that infringe on a customer's rights and interests. These restrictions can come in the form of government policies, ticket issuer practices or misused technologies.
As we begin to discuss some of these issues, let's first take a look at bots to unfairly procure tickets. StubHub supports and will continue to support legislation prohibiting the use of bots. We strongly believe the legislation in this area should be comprehensive and inclusive of a range of issues impacting fans' access to tickets.
While bots are often blamed as the sole reason fans have difficulty accessing tickets, it's important to note that another major factor exists as well, specifically that a large percentage of tickets actually never are released for sale to the general public.
According to a study undertaken by the New York Attorney General in 2016, an average of 46% of tickets go on sale to the general public. The remaining tickets are held back for industry insiders, artists, clubs, credit card pre-sales and other sources. For top shows, this average falls to 25% and has been reported as low as 12%. In Canada, the National Hockey League commissioner stated that over 90% of the tickets to the 2016 World Cup of Hockey were already sold in advance of the general on-sale.
Providing fans information on the number of tickets available for sale, when these tickets will be offered and at what price, will create a clearer picture of event accessibility. It is a critical part of any discussion on ticket access. It will also help inform customers' purchasing decisions.
Another market trend that impacts customers is the increasing use of restrictive terms, conditions and technologies to control what fans do with the tickets they have rightfully purchased. In some instances, these restrictions prevent ticket purchasers from transferring or reselling tickets altogether, eliminating the opportunity to give tickets away or resell them, even in an effort to recoup funds if they cannot attend an event. In other instances, restrictions are designed not to eliminate transfer or resale, but to control it and eliminate competition in the ticket marketplace.
It is critical that fans have the option to purchase a freely transferable ticket at the initial point of sale. Several jurisdictions in Canada and the U.S. have proposed or adopted laws protecting this right. By ensuring that consumers have choice, they are empowering fans and protecting a competitive ticket market. When companies compete on a level playing field for the business of fans, fans win.
A final market trend that impacts Canadian consumers is the deceptive URLs to mimic the box offices of venues, teams or artists, when in fact they're actually resale sites. This practice is harmful to consumers and harmful to legitimate resale marketplaces as it perpetuates a negative image of the secondary ticket market.
In closing, StubHub is committed to an open dialogue with government, regulators and industry stakeholders to continue to improve the industry and preserve a healthy and competitive ticket market for fans.
Thank you for the opportunity to present to your committee. I look forward to answering any questions you might have.
Liberal
The Chair Liberal Julie Dabrusin
Thank you.
We'll now begin the question and answer period.
We will go to Mr. Long, for seven minutes.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Thank you, Madam Chair.
Thank you for coming in this afternoon. It's much appreciated.
I'll start by sharing an experience I had on StubHub recently. I've had some good experiences, but this experience was a tough one.
I went to buy tickets to a Morrissey concert. I'm a big Morrissey fan. However, the show sold out across Canada, for the sake of argument, in 30 minutes or an hour, or whatever. I was on the phone. I was trying to buy my tickets. I couldn't get a ticket. When I had a chance to buy two, by that time, they were gone, and so on and so forth. I was extremely disappointed.
One hour later, there were tons of tickets available on StubHub that, I'll be honest, I was still quite happy to buy. I paid a lot more than face value for them, almost double, but I bought the tickets.
I wasn't able to go to the concert, unfortunately for me, and I went to resell the tickets. I could resell the tickets and I thought at the time, “Because I had such a hard time buying the tickets, it's going to be easy to resell them.” I posted them for resale and that was all good. Then I went on the site, and there tickets all over the place for sale. I didn't sell them, because there were all kinds of other tickets for sale.
You did, too?
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
I'm heartbroken that I couldn't see Morrissey.
First, how does it happen that the venue sells out that quickly, and then one hour later, there are all these tickets for sale on StubHub? Is that a robotic buy? Is it a computer-generated buy?
I almost, just by chance, said, “For fun, I'll see what's available on StubHub for the same concert that was sold out an hour previously.” There were tickets everywhere, in every section. How does that happen?
General Manager, Canada, StubHub
Sorry about that, that you didn't get to go.
Liberal
General Manager, Canada, StubHub
The marketplace is dynamic it's a supply and demand marketplace, with interested parties on both the buy and the sell side, and when the opportunity for a legitimate acquisition of tickets may occur from the regular box office and individuals on the business side or the consumer side are looking to release those tickets, they're assuming that the market dynamics will create a certain amount of opportunity or wealth for them against each ticket that they purchase.
When those market dynamics don't turn out to be correct and there ends up being a large number of tickets still available, then you have softer demand, you have softer ticket prices and, like any normal reactive dynamic market, the market falls back into line.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Would you think in that situation that tickets were held back or that there was just a massive buy of tickets, through a broker, a bot or whatever, that then put them back through StubHub?