A new consumer protection bill introduced to the Alberta legislature last month suggests it is going to help protect fans and concert goers. Along with new regulations covering various other industries, the Better Deal for Consumers and Business Act looks to ease ticket fraud and price gouging by:

  • Banning use of bots used by scalpers and the secondary ticket industry to snap up tickets made available to the public the instant they go on sale.
  • Putting the onus of identifying and thwarting these bulk, bot-purchased tickets on primary ticket companies.
  • Requiring resellers to provide refunds for tickets that are purchased by bots or are counterfeit.

Requiring resellers to provide refunds if they sell someone a bogus ticket seems like a reasonable law. Attempting to shut down bots and bulk buyers is great too. Indeed it’s something most of the major ticket companies are working on. Technologies like blockchain – which has enabled the meteoric rise of Bitcoin – will be brought to bear and will help to an extent. But unfortunately, bots and fake tickets are only a small part of the issue.

To us at Showpass and most true fans, getting a good and fair deal means making tickets available at face value plus modest and reasonable fees for the seller. That means selling tickets on a first-come, first-served basis, which is exactly what buyers expect and what they are led to believe is happening when tickets first go on sale. The ugly reality, however, is that the game is rigged against buyers from the start thanks to the secondary market and the cosy relationship some of the biggest primary ticket sellers have with it.

It’s estimated that for every given performance, between 25 to 50 percent of tickets  – including most of the best tickets – are held back from being available for purchase when tickets “go on sale.” Instead, they are kept for other distribution streams, promoters, credit card rewards programs, venues and artists. Far too often, some of these tickets end up being sold on the secondary market for much higher prices.

When this happens, the concept of “first-come, first-served” gives way to “supply and demand” or “charging as much as the market will bear” business models. Whether one of these models is morally superior provides interesting fodder for debate. Obviously Alberta lawmakers and other legislatures in North America, (see BOTS Act) believe it’s wrong for someone to grab tickets from the “first-come, first-served” business model and move them to the secondary market. And if it is, indeed, wrong to do that, is it right for primary ticket sellers to withhold tickets from the primary market and feed them to the secondary market? Is it wrong for primary ticket sellers to have insider relationships with the secondary market? Is it wrong for a primary ticket seller to OWN a secondary ticket company?

It would appear the Ontario legislature sees close relationships with primary and secondary ticket sellers as problematic based on recent laws enacted there prohibit primary sellers from selling on the secondary market for a profit. Here in Alberta, companies like Showpass are prohibited from working with the secondary market, though the larger, more established companies still are able to do so with virtually no regulations.

Our view is, at the very least, there is a moral obligation for ticket sellers to be upfront and transparent about how they are really selling tickets and that it’s wrong for a company to pretend it’s giving everyone a fair shot to decent tickets if they really aren’t.  Moreover, we take issue with the fact that the companies least likely to take the moral high road on this issue are also the least regulated in this regard.

So What Can Be Done?

Legislation is one solution, though it is not yet clear how effective it will truly be. As mentioned above, the proposed Alberta law only tackles part of the problem. Ontario takes things a little further with its laws. And neither of these even attempt to go after actual humans who commit fraud by using stolen credit cards to purchase tickets or sell fake tickets to individuals.

Technology provides another solution and, in all likelihood, provides the most plausible one. Imagine a scenario where every ticket sale could be conducted through an app, where each purchase could be attributed to a specific person and that person could be identified at the door of the event. Once the event is sold out, people may be added to a waiting list. Should a ticket holder become unable to attend the event, the ticket would be refunded and transferred back into inventory where it could be sold to the person at the head of the waiting list at a fair price.

A system like this renders bots useless and, in fact, can eliminate the entire secondary market. It’s just one of the many things that can be done with the Showpass platform (and there are plenty of others that are proven to increase ticket sales and provide event organizers additional revenue streams while enriching the experience for attendees). At Showpass, we intend to eliminate the secondary market for the most in-demand events and restore a better event experience for ticket buyers.

These are the kind of technologies that have the ability to make sweeping change to established industries quickly and put the needs of the customers ahead of the establishment. Combining technology like this with the fact that now many performers, enlightened event organizers and other involved parties have a vested interest in a happy and loyal fan base and you’ve got the makings of real change.