Evidence of meeting #158 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 ticketmaster.
A recording is available from Parliament.
3:30 p.m.
Liberal
The Chair Liberal Julie Dabrusin
Welcome to the 158th meeting of the Standing Committee on Canadian Heritage. We are continuing our study on the online secondary ticket sales industry.
Today we welcome Patti-Anne Tarlton, chairman of Ticketmaster Canada.
From Vivid Seats, we welcome Ryan Fitts, vice-president, legal affairs; and Jonas Beallor, chief operating officer of Fanxchange.
We are going to begin with your presentations.
Ms. Tarlton.
3:30 p.m.
Patti-Anne Tarlton Chairman, Ticketmaster Canada
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.
3:40 p.m.
Liberal
The Chair Liberal Julie Dabrusin
Thank you very much.
We will now go to Ryan Fitts and Jonas Beallor of Vivid Seats.
3:40 p.m.
Jonas Beallor Chief Operating Officer, Fanxchange, Vivid Seats
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.
Thank you.
3:45 p.m.
Liberal
The Chair Liberal Julie Dabrusin
Thank you.
We will now begin our question and answer period. We'll begin with Mr. Long, for seven minutes.
May 14th, 2019 / 3:45 p.m.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Thank you, Madam Chair.
Good afternoon and thank you for coming in this afternoon.
It's very interesting. I do come at this from a unique perspective. I was a major junior hockey owner. I also am a New England Patriots season ticket holder. I have lots of different perspectives on this.
I want to start with you, Ms. Tarlton.
When you go on Ticketmaster, are Ticketmaster.com and Ticketmaster.ca the same? Are they intertwined? Is there a Canadian presence versus a U.S. presence? How are the two sites separated?
3:45 p.m.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Actually, let me just follow up if you don't mind. Can you just talk about your presence in Canada versus in the United States?
3:45 p.m.
Chairman, Ticketmaster Canada
The URL of the website itself is Ticketmaster.com in America and Ticketmaster.ca in Canada. They are distinct.
3:50 p.m.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
When I go on Ticketmaster.ca, it's a totally separate site from Ticketmaster.com.
3:50 p.m.
Chairman, Ticketmaster Canada
It is a separate infrastructure, but we can also share resources. We are trying to also scale the features that are being developed south of the border.
3:50 p.m.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
With respect to you guys, is it the same with .com and .ca? What's the presence in the United States versus Canada?
3:50 p.m.
Chief Operating Officer, Fanxchange, Vivid Seats
For us, they're slightly different in the fact that we're a B2C and a B2B play. We're .com. At the same time, our partnerships in Canada would be .ca or .com.
3:50 p.m.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Okay.
Ms. Tarlton, I was reading some articles and there was one where Irving Azoff, former CEO, was at a congressional hearing in the States. I'll just quote what we said with respect to secondary ticket sales. He said, “I never would have bought it. The whole secondary sales area is a mess. In a perfect world, I personally would hope that there be a more transparent, accurate primary that would do away with the need for...secondary [sales] whatsoever.”
Can you comment on that? Can you talk to me about Ticketmaster and the number of secondary sales that you go through?
3:50 p.m.
Chairman, Ticketmaster Canada
Yes, thank you. That quote is probably 10 years old. The innovation since that time has been exponential. Also the movement and the build-out of the features and tools and the transparency for consumers is exponentially better as well.
Today, when I spoke of interactive seat maps, that's the visibility to see what your choices are. They're distinct. There are two colours. One would be for a primary ticket sold and the other is a resale. Those are giving the consumer a good understanding of what they're purchasing. The price point is there. It's on for Canadian requirements in B.C., Ontario and Quebec. The fee displays are all in as well.
3:50 p.m.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Correct me if I'm wrong, but Ticketmaster represents some sports organizations and sells their tickets.
3:50 p.m.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
It sells tickets for performances in the arts and bands and all that kind of stuff. Those are two separate markets, I recognize.
For example, with respect to the New England Patriots, is it safe to say that you're the official ticket seller for the Patriots?
3:50 p.m.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
How does Ticketmaster proceed that way? Does Ticketmaster approach sports teams or musicians and ask to be their ticket seller? Do you aggressively go after teams? Do teams come after you? How does that dynamic work?
3:50 p.m.
Chairman, Ticketmaster Canada
Ticketmaster is unique in that we build partnerships with the rights owners. It could be a team and we also have relationships with venues themselves, but absolutely, our goal is to deliver them tools so they have an attachment between their business and the fans they're looking to bring into their business.
3:50 p.m.
Liberal
Wayne Long Liberal Saint John—Rothesay, NB
Is there any instance whatsoever, whether it's a musician, band, or a sports team, where you would ever hold back tickets and manipulate that market? Do you do that?
3:50 p.m.
Chairman, Ticketmaster Canada
As I said in my remarks, that is not the role of the ticket technology. Those decisions are in the hands of the content owner.
3:50 p.m.
Liberal
3:50 p.m.
Chairman, Ticketmaster Canada
It could be the team. It could be an artist. The artist may make an arrangement with a promoter; it could be a tour promoter, those who have the rights to the live entertainment. It would be anyone other than Ticketmaster or the ticketing technology.