3 Thoughts About the Secondary Market In the UK and Ticketmaster’s Pulling Out of the Secondary ​Market

Monday found Ticketmaster announcing that it would pull out of the secondary ticket market in the United Kingdom. This news was met with celebration by some and skepticism by many. 

The reality is likely somewhere in between and we won’t know the real impact of this decision for a bit. 

One thing I think we can assume is that this wasn’t really an altruistic decision, but a pragmatic decision. 

In my research, I’ve found that about 80% of the secondary market is held by Viagogo in the UK and another person I know put the number at 70%. Either one means that 3 other sides were fighting over a small piece of a very expensive pie. 

That’s all fine and good, but over the last day or so, I’ve received a lot of emails, texts, and DMs about what is happening in the UK with Ticketmaster, why the UK primary market doesn’t get it, and why the UK market does have it right. 

To try and help explain all of this a little bit better, here’s a few ideas about the secondary market and the UK to help everyone along. 

The United States and the United Kingdom are two entirely different ticket markets: 

This might seem obvious or not, but it is really true. 

The biggest difference is that in the UK and most of the world, ticket selling is an open market, meaning that one primary seller doesn’t have all the inventory and isn’t working to create monopoly control of the ticket sales. 

In the US, we have an environment where each venue only sells with one ticketing company, meaning if that company doesn’t do a great job of selling your inventory for you through their means of marketing and selling, you can be at a disadvantage and the secondary market can begin to look a lot more appealing. 

In the UK, this plays out in people are competing to sell their allocations of tickets. If you aren’t successful, you might not get an allocation again. 

So in one of the primary functions of the secondary market in the US, as a way to clear inventory through multiple partners…the UK’s system is set up in a way that this happens as a natural part of the primary market. 

The idea of risk management from secondary market partners is less appealing all the time: 

I’m pretty consistent, I hope, in my ideas that if you aren’t building a customer and keeping that customer…you aren’t really doing much. 

In this regard, brokers I talk to all over the world like to offer up some variation of the term “risk management.” 

The may say risk, they may say arbitrage, or they may have some other fancy term that all means something similar. 

The thing is that this type of relationship with the primary market isn’t necessarily as appealing anymore in many cases. 

Why?

There are likely a lot of reasons behind this, but let’s highlight just two. 

First, in a lot of cases, rightly or wrongly, the artists or organizations have made a decision that they think they can capture all of the revenue that may be slipping through to the secondary market. 

Is this true? 

Tough to say. 

I mean I hear the argument being offered up by Ticketmaster to justify the decision-making process of the tours like Jay-Z and Taylor Swift. But is this PR spin or is it true, I guess we will or can find out when the quarterly and annual earnings step forth. 

But the reality is, if you think you can do a better job of generating customers for your business and that it provides a better revenue opportunity for your organization and your partners, you should absolutely make the effort to do that. 

Second, consolidation deals have meant that many teams already have a certain amount of risk alleviation in place. 

The smaller brokers may have been able to generate business and grow their businesses through acquiring packs of 4 or 8 tickets here and there, buying online or at the box office, building a relationship with a team or venue. 

For a long time, this probably had value too. 

But over the past few years, consolidation has taken hold of the secondary markets’ relationship with the primary market. 

Due to the scope of these deals, that small time accumulation of deals as a backstop for risk isn’t necessary because a larger partner is taking on the bulk of that risk now. 

How do those deals work out for both sides? 

I think there is a great deal of variance in their success or failure.

And likely depending on how you measure success depends on what you will call good or bad. 

Since this is almost entirely a US-based argument so far, how does it relate to the UK? 

Well, the risk argument is one that is offered up pretty consistently from the secondary market in the UK as well. 

As stated above, the way a lot of ticket deals are structured in the UK, the opportunity to move inventory is often spread across many different partners. 

While consolidation doesn’t really play a part in the UK market, the idea of risk being spread is similar but flipped due to the larger number of partners in many cases. 

For my money, if you were going to make an argument about risk and inventory management from POV of the secondary market, you’d do better to illustrate how you were able to move inventory to shows that aren’t sold out and put yourself in a position to be a partner that helps the venue move tickets through the secondary market dynamically. 

The argument is about value to the market in both places and around the world: 

Whether or not you are anti-secondary or pro-secondary, the argument is really about value. 

I did a survey earlier in the year of the ways that organizations around the world deal with or work with the secondary market. 

There was a range of ways that people worked with and felt about the secondary market. Obviously, location played a role, but also type of organization did as well. 

At INTIX, I had many primary sellers come up to me, pin me in a corner, and ask me, “I know that you are someone that understands the secondary market, so can you explain to me how so many of them can’t see the world except in one way that benefits them and them alone?” 

Is that true?

I don’t know. 

I’d offer up the idea that in today’s business culture, the idea of reciprocal relationships is one that we need more of. 

I can win and you can win. 

I know that Donald Trump says you have to go into each negotiation and deal like you are going to gut the other person or some such nonsense, but he’s full of it and that doesn’t reflect my dealings with the world. 

But to give an answer a chance, I’d say that the biggest challenge that brokers have communicating with the primary side is that they don’t do a good job of explaining the value of what they can do.

This is largely tickets on the whole. 

We see too many premium and luxury products sold like commodities. 

We see tickets that are priced incorrectly and then heavily discounted when panic sets in. 

On and on this kind of thing goes. 

The reality is that everyone needs to revisit the idea of value in what they offer and how they offer value to the world around them and the people they want to serve. 

In regards to the secondary market, when you are scrambling to squeeze out tickets at an on-sale to a show that is guaranteed to sell-out and flip those tickets at 100% or more market-up, I can’t help you be seen as someone that is a partner and a value-add. 

If you are a broker and you have a relationship with a venue where you take on tickets and partner with the venue throughout all of its productions and events, good or bad, with the necessary prudence and precautions in place to help decide whether the relationship is useful, helpful, and valuable, I can help you with that argument all day long. 

Why? 

Because one is about the finite game and one is about the infinite game. 

The first example is someone that has decided that they are going to squeeze whatever they can out of this situation because it is win or lose at all costs. 

The second is about nurturing a community, creating a relationship, and sharing value together. 

The difference is huge and in many cases, it isn’t even a contest because far too many people have taken the position that the only game that matters is the finite game. 

Just to be clear, while my attention here is on the UK…the idea of partnership and relationships working both ways applies to both sides of the market and both sides of the ocean. 

The truth is that no matter where you are in the world if you can create real, true value, there is space for you. If your idea of value is capturing all of the value for yourself and limiting your risk, that’s a tougher argument to make. 

So it goes. 

Did this make it muddier in your mind?

What say you on the topic? 

 

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