Canadian Heritage Committee on May 14th, 2019

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Okay.

Is there any instance where Vivid Seats would hold back tickets?

I had an experience I talked about at the last meting, whereby through StubHub, I was to buy some Morrissey tickets and I couldn't get the tickets. Then all of a sudden the tickets were for sale on StubHub at twice the price. Three weeks later, it seemed a lot of tickets were back on the site.

Are there instances where your organization will pull back or hold tickets to inflate a market price and then depending on demand or need, release tickets back in?

[Ryan Fitts, Vice-President, Legal Affairs, Vivid Seats]

Absolutely not. We are a resale marketplace, so for the most part, we don't own or control any of these tickets as third party sellers. We have all the inventory at our marketplace available on the website at all times. That's one of the appeals of resale. You can see the entire seating chart and you can make a selection depending on where you want to sit. There are no holdbacks on the resale market.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Do you allow scalpers to buy the larger volumes of tickets and then resell them?

[Ryan Fitts]

We don't have large-scale buyers on our site. The buyers are usually individual fans. There are not a lot of broker-to-broker transactions on our website.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

What safety nets do you have in place to make sure that doesn't happen?

[Ryan Fitts]

We have technology to prevent unusual transactions and stop them before they happen. Security is important to us. We make significant investments on that front.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Have you caught and blocked a sale?

[Ryan Fitts]

I could look into that. None that I'm aware of, as I sit here right now, as far as some sort of a massive attack on the site.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Okay.

[The Chair, Liberal, Julie Dabrusin]

Unfortunately, that's all your time.

We will now go to Mr. Yurdiga, please.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

Thank you, Madam Chair.

I'd like to thank Ticketmaster and Vivid Seats for joining us. This study has been a long time coming. There are a lot of concerns out there.

I have never heard about the secondary market from any of my constituents. I hear quite a bit about things like fraudulent sites selling tickets that don't exist. I think it's an education process and the consumer will eventually learn that there are trusted sites and we should all be very vigilant as to where we buy our tickets.

Ticketmaster and Vivid Seats, from your perspective what needs to be done? You mentioned the primary holdbacks. Do you think that's hindering the market? Do you think that practice has to stop? Is it okay the way it is?

[Jonas Beallor]

From our perspective, holdbacks have the potential to create a false demand. They can potentially inflate the price on the secondary market with the perception that tickets are no longer available.

If the tickets are available from the outset, and if the number of shows are communicated at the forefront, then I believe that makes a difference as it relates to the impact it has on the secondary market.

[Patti-Anne Tarlton]

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.

[The Chair, Liberal, Julie Dabrusin]

I'm sorry, but I'm going to have to interrupt. We have 15-minute bells right now for a vote, unless they just stopped. It was a quorum call. The bells are no longer ringing. We're back on. We're fine. I'm sorry.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

From my personal experience, I don't even go to a primary market anymore because I'm wasting my time. I'm quite familiar with Ticketmaster because it's easy. I go there and I get what I want. That is easier for me. Why waste all that time because tickets are being held back; they are bots that have taken them all up or whatever it may be.

Has there been an increase in people forgetting about the primary ticket sales and just going directly to someone they're familiar and comfortable with, even though the price may be higher, but they're more comfortable that they're going to get a seat? Vivid Seats, can you—

[Jonas Beallor]

Yes, I think this is why Vivid Seats and Fanxchange was the perfect fit. For the Fanxchange company out of Toronto, our whole view, vision and mandate was to expand accessibility to tickets, and we did that through commercial partnerships, distribution commerce, with financial institutions. With U.S. Bank, for example, you can use your loyalty points. You're not required to use cash in order to acquire tickets, or if you have an affinity to a particular loyalty brand, you can purchase those tickets there and then receive points as a recognition for purchasing. The Groupon base tends to be mothers who feel comfortable and familiar shopping on the Groupon platform, so we have a partnership that allows for tickets to be purchased through Groupon.

Again, to your point, yes, that's an avenue where people.... I can't tell you what people would prefer to do. What I would say here and feel comfortable saying is that we believe strongly that people have a connection to different brands and different companies, and what we've done is give them an opportunity to acquire access to live event tickets through those avenues they choose fit. This goes to the whole idea of accessibility and why we think it's so important.

[Patti-Anne Tarlton]

I would say what's even more important is to provide an ecosystem where the revenues generated from that ticket opportunity are going back to those who are in the ecosystem: the artists, the attractions, the teams. So, yes is the answer to whether you see a proliferation of consumers going to third party sites because they think they can get tickets better. But their real goal is to be in a place where the tickets are always available. That's where the legislation that opens up resale allows us, for example, to have an integration between primary and secondary. Those consumers can still go then to Ticketmaster, for example, to find a ticket that's available, and those revenues that are being generated are then kept in the artists' or the teams' or the promoters' hands.

[The Chair, Liberal, Julie Dabrusin]

Mr. Nantel, you have the floor for seven minutes.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

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.

[Patti-Anne Tarlton]

As it relates to the fan, the consumer, if we don't lose sight that it's their disposable income, it's their choice to take the money out of their pockets and not pay for dinner or a mortgage, to go to an event, so the competition is everything else that fans could be investing in, and the friction that's between them and their chosen attraction. Yes, there's more friction. Yes, expenses could be higher. The pricing of tickets is higher, but we also can be stuck in the high echelon of the top 10% of the industry—

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Who can't afford a ticket....

[Patti-Anne Tarlton]

But also there's the gross majority. We're talking about the over 60%, 70% of tickets that don't go on sale. What we're trying to do is help those attractions get found. Those prices may not be as high as the Taylor Swifts of the world, The Who, Elton John, but there's great talent out there. Really, the balance is to collectively—industry with technology, government with legislation, the whole ecosystem of the stakeholders in the industry—accrue to generating great opportunities for talent, for the talent to be delivered to Canadians in Canada, to pay taxes in Canada, and to continue to feed on itself.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Knowing your past, I'm confident that you're very sincere about it, and that there are for sure opportunities for Canadian content, Canadian artists, to come as opening acts, for example, for these big shows.

Mr. Beallor and Mr. Fitts, would you be comfortable mentioning the importance in dollars of your market here?

[Ryan Fitts]

As I'm sure you'll understand, it's hard to divulge competitively sensitive information in this public setting. I will say that we acquired Band Exchange last month and we're very excited to make this investment in the Canadian market. We're excited to be here, in part, for the excellent software engineering that we can now access in Toronto.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

I also expect that you would not be comfortable divulging how much income tax you paid in Canada, but I would like to ask you this. Are your profits, your economic activities, registered in Canada, or are the sales actually done in the States?