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Editorial: Is It An Online Scalper Or Just a "Portal"? |
by Mark P. Line
Online scalper StubHub, a subsidiary of eBay, has repeatedly argued that a federal law called the Communications Decency Act (CDA) protects them from lawsuits (and presumably prosecution) resulting from the actions of the third-party scalpers that use their service. In other words, StubHub is saying that they're not really scalpers, so scalping laws don't apply to them -- at best they would apply only to the people who use their service to scalp tickets, they're saying.
But is this really true?
The Communications Decency Act was made law in 1996 in order to regulate the distribution of pornography on the Internet. Section 230 of the Act does provide a more general provision, however:
No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.
It's difficult to imagine how StubHub might expect the courts and the public to believe that third-party scalpers using StubHub are only "information content providers". Granted, they can be seen as information content providers: They're providing the information that they have some tickets to sell (even if that information is often false, since speculators have begun pre-listing tickets that aren't even available from the primary outlet yet).
But come on, these same people are also drivers, spouses, parents and employees -- and all the laws that apply to drivers, spouses, parents and employees apply to them just as well as the laws that apply to "information content providers". Neither the third-party scalpers nor StubHub itself are just "information providers". They're ticket scalpers, so laws about scalping apply to their actions whether they like it or not.
StubHub and other online scalpers have claimed that they themselves are not really scalpers, because they're only selling a service to third-party scalpers -- they're not selling tickets. Although the news may not have trickled down into the bowels of the American court system yet, that argument can't fly either. On StubHub's website, they write:
You are buying tickets from a third party; neither StubHub.com nor StubHub, Inc. is the ticket seller. Ticket prices are set by sellers and may differ from face value. All sales and bids are FINAL.
But elsewhere on their website they also say the following:
We Guarantee: You will get your tickets in time for the event.
Your tickets will be authentic and valid for entry.
You will receive tickets comparable to or better than the tickets you ordered, or your money back.
You will be refunded if the event is cancelled and is not rescheduled.
Now how in the world can StubHub provide all those guarantees to the ultimate ticket purchaser if they're not co-sellers at the very least? If they were merely providing a convenience for buyers and sellers to come together and conduct their scalping business, they would carefully insulate themselves from any actions of their third-party scalpers -- but that's not what they're doing. They are partnering with third-party scalpers to provide tickets to online purchasers. If the third-party scalper fails to deliver, then StubHub steps in as a good partner and covers the sale. If they're partners, then they're partners in crime.
So now what? The scalpers are trying it on, breaking laws right and left, and little seems to be changing.
There may be hope. In a landmark case just this week, a court in Sweden found that an online audio/video pirating outfit called The Pirate Bay was guilty of "assisting the distribution of illegal content online". Pirate Bay protested that they don't distribute illegal content (pirated music and videos) but only serve as a portal for people who wish to distribute or consume such illegal content.
Sound familiar?
The four co-founders of The Pirate Bay are now looking at $3.6M in fines and a year in jail. They thought that they could partner with criminals and nobody could touch them. Fortunately, that's not how the law works in most of the civilized world.
I've been talking about StubHub because that company has been particularly vocal in its protestations. But it's TicketsNow, Ticketmaster's online scalping subsidiary, that's been all over the news in the last couple of months. Multiple class action suits against them in Canada (four, or is it five? I've lost count), investigations by the attorneys general of Ontario and New Jersey, investigations by Congress and by multiple agencies of the executive branch and now, while Ticketmaster Chairman Barry Diller continues to poo-poo the whole concern about scalping, the company's new CEO, Irving Azoff, has told a Senate subcommittee that he thinks scalping should be illegal.
Clearly, it's an ill wind that's starting to blow for the scalping "industry".
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Latest News
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The Wisconsin Senate voted 27-3 in favor of a bill which will allow ticket resale zones around sports venues to be enforced, thus making a good start towards reining in the activities of ticket scalpers in Wisconsin.
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NEWARK, NJ (March 1st, 2010) – Three men who used fraud, deceit, and computer hacking to make more than $25 million by acquiring and reselling more than 1.5 million of the most coveted tickets to concerts, sporting events, and live entertainment throughout the United States surrendered to federal authorities this morning after being charged in an Indictment, U.S. Attorney Paul J. Fishman announced. |
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PRINCETON, NJ (February 23, 2010) -- CardlessPay.com, a mobile payment startup, announces their new product mWallet which has the ability to carry things that are normally carried on a regular wallet -- tickets, coupons, receipts, loyalty cards etc. Each item added to the mWallet has human readable information on one side and machine readable barcode on the other side. The product can also house a credit card, a checking account and a PayPal account securely on the iPhone and Android Phones.
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LOS ANGELES and WEST HOLLYWOOD (January 25, 2010) – Live Nation, Inc. (NYSE: LYV) and Ticketmaster Entertainment, Inc. (NASDAQ: TKTM) today announced that they have reached agreements with the U.S. Department of Justice (DOJ) and with the Canadian Commissioner of Competition, clearing the way for the merger of the companies. Upon closing, the company will be renamed Live Nation Entertainment, Inc. to reflect the combination of Live Nation’s concert promotions expertise with Ticketmaster’s ticketing solutions and artist relationships.
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HAMPSHIRE, UK (February 2, 2010) - A new study by Juniper Research has forecast that nearly 15 billion tickets will be delivered to subscribers' mobile devices worldwide by 2014, compared to just over two billion this year.
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Over the last few months, ten class-action lawsuits have been filed in six states against Ticketmaster and their online scalper subsidiary, TicketsNow: three in California, three in New Jersey, and one each in Massachusetts, Minnesota, North Carolina and Pennsylvania.
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In an ongoing Massachusetts lawsuit against online scalper StubHub, the New England Patriots have won a major victory: The court has agreed with the team that event tickets are merely licenses and that the issuer of that license has every right to control the terms under which it can be granted or revoked. That includes the right to forbid the unauthorized resale of tickets. Such terms are often printed on ticket backs, but seldom enforced. This court case may provide a precedent that will make enforcement by venues and presenters much easier.
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by Mark P. Line
The attorney general of Ontario, Chris Bentley, is proposing a new anti-scalping law that would make it illegal for the same company to sell tickets at face value on the primary market as well as scalp tickets to the same event at marked-up prices. The proposed law is clearly designed to target Ticketmaster and its online scalping subsidiary, TicketsNow, which have come under heavy fire lately on allegations of diverting tickets from their primary portal to their scalping site at a significant markup.
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In a white paper issued this month by the American Antitrust Institute, a non-profit think tank based in Washington DC, James Hurwitz provides numerous arguments against the proposed $2.5 billion merger of Ticketmaster with Live Nation.
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Antitrust investigators in at least a dozen states are joining the federal government in its study of the proposed merger of Ticketmaster and Live Nation. Under the coordination of the Pennsylvania Attorney General's office, the investigations are attempting to discover whether or not such a merger would make things even worse for concert-goers who are already negatively affected by Ticketmaster's practices.
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Resource Articles
by Mark P. Line
Many of us have seen or used so-called "smart cards" for tollroad or subway access -- payment cards or entry tickets with electronic chips and an antenna embedded in them that allow contactless entry by means of radio-frequency communication with a nearby reader. The higher cost of manufacturing cards or tickets with electronic circuitry on them has been justified by their long-term or multiple use as weekly or monthly passes or as season tickets.
These smart tickets have been much too expensive, though, to use once and then throw away as with conventional paper event tickets -- until now. New technology is now converging to allow companies to produce cheap ticket stock with electronic chips inlaid into or even printed onto the paper.
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by Mark P. Line
You have a mailing list with 10,000 people on it who have bought
tickets from you or who have otherwise opted into your list. When you
announce your upcoming Nine Inch Nails onsale to these people, how many of
them really care and how many of them think it's just more spam? Do you think the patrons to your San Francisco Symphony On Tour show are likely to be big NIN fans as well?
What if you could target just those people on your email list who are likely to be interested in a NIN concert?
This article is about segmenting your email list to allow targeted
marketing such as this. The beauty of email marketing is that you can
manage your segments right there in your email marketing software --
once you've added the right data for each email subscriber, you can
come up with segments that are useful for a wide variety of marketing
campaigns.
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by Mark P. Line, Managing Editor
It's time for sports venues to eighty-six the beer and hotdogs in favor of champagne and caviar: Before you know it, only the wealthy will be able to afford a ticket.
Performing arts venues should begin planning to rebuild their auditoriums to include full leather seating, a full-bar wait service and WiFi, because it's only going to be the rich who can afford to attend any of your concerts.
Why? Because increasingly, artists, teams, presenters and promoters are no longer setting the price of tickets.
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