February 23, 2009

It is quite ironic that a new secondary ticketing service launches just as a public debate roars about how a Ticketmaster-Live Nation merger would raise ticket prices. Regardless of the number of tickets Ticketmaster offers only on its secondary sites -- that's the hot topic these days, the number of tickets that don't get sold at face value -- there are plenty of tickets sold at face value that others will resell.

New companies -- and their investors -- see legalized scalping as a lucrative market. As Officialboxoffice.com goes to show, the market is not yet saturated enough to dissuade new entrants.

Officialboxoffice.com was started by the UK trade group Concert Promoters Association. The site is meant to provide potential buyers with a safe marketplace. The CPA does have a valid concern. Fraudulent ticket sellers undermine their business by bringing in uncertainty. That can push down attendance.

According to an NME article, buyers who get scammed will either get their money back or (since the site is backed by promoters) will still be able to get into the show. Those are good selling points but the site's Terms & Conditions page says nothing about being let into a concert if you a buyer gets scammed.

It's nice that the site encourages sellers to charge a "fair price," but its revenue model says otherwise. If there's such great value in providing a trustworthy secondary ticketing service, there is less need for the not-for-profit group to charge more than a small flat rate for the service. The value of the service to fans will be realized in higher attendance and greater ancillary revenues. But Officialboxoffice.com is a self-sustaining entity that takes a percentage of the total cost to the buyer. When tickets are sold at very inflated prices, Officialboxoffice.com makes more money.

And it is also nice that Officialboxoffice.com says it is only a service to be used by concertgoers who cannot attend the show for which they bought tickets. "We do not condone touting," reads the About Us page. Unfortunately, I do not see any controls in place that would discourage touts and enable only "true fans" to sell tickets.

With or without Ticketmaster, a secondary ticketing market exists and many concertgoers will have paid far more than face value. I would love to see critics of Ticketmaster speak out against Officialboxoffice.com and other secondary ticketing services, but it's not going to happen. While Ticketmaster gouges fans, so goes the public's sentiment, everybody else is merely providing the valuable service of connecting supply and demand for entertainment events. Let's be honest. There's little rosy idealism in the secondary ticketing market. Entrepreneurs are simply out to cash in on the public's abundant willingness to pay more than face value.

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Posted by Glenn at 1:20 PM | | Ticketing

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