The recent Ticketmaster-Taylor Swift ticket purchasing debacle brought renewed attention to the stranglehold Ticketmaster holds on the live music industry. On this episode of Policy Outsider, New York State Senator James Skoufis, a leading champion of ticket reform legislation, breaks down the problems facing the ticket industry and how state and federal policy can work to protect consumers.
Guest:
Honorable James Skoufis, New York State Senator
Transcript was generated using AI software and may contain errors.
Alexander Morse 00:07
Hey there and welcome to policy outsider presented by the Rockefeller Institute government. I’m your host, Alex Morse. I love going to concerts. I love seeing my favorite artists dancing along with 1000s of fans. Singing all songs together, honestly just have so much fun. What isn’t so much fun. The ticket buying experience opening up a web browser logging on to Ticketmaster and seeing all of these tickets are sold out within minutes of going on sale. Or if unfortunate enough to score a couple of tickets, fees at the end ballooning the costs $5, $10, $15, $25! It’s just mind boggling. Millions of Taylor Swift fans recently had a similarly miserable experience, if not more so, when trying to buy tickets for Swift’s latest tour. Ticketmaster couldn’t keep up with the demand, which was dragging its website down to a crawl and ultimately canceled remaining public sales, leaving fans confused, angry and with very little recourse. The recent swift Ticketmaster debacle had us thinking about the ticketing industry at large. And so we invited New York State Senator James Skoufis, a leading champion of ticket reform legislation to outline some of the problems facing Ticketmaster and the ticketing industry, including some dirty tricks Ticketmaster and ticket brokers engage in to enrich themselves at the expense of fans, and what reforms the Senator is fighting for to improve the ticket buying experience and ensure fans have a fair shot to sing and dance along with their favorite artists coming up next. Senator, thanks for joining us today.
Alexander Morse 02:02
Senator, thanks for joining us today.
Senator James Skoufis 02:04
My pleasure. Thanks, Alex.
Alexander Morse 02:06
Great to have you here. And I just want to jump right off the bat with a simple question. Have you heard of this little known artist? Taylor Swift?
Senator James Skoufis 02:17
I have heard her name in passing. And I think she has a lot of angry fans around the country these days. And I suspect we’re going to talk a lot about that.
Alexander Morse 02:28
Yeah, we will. And you mentioned that angry fans. And that’s because just recently in mid November, Taylor Swift, who happens to be a tremendously popular artist announced a US stadium tour. And fans that signed up for Ticketmaster presale, ended up waiting online for hours and ended up walking away confused and empty handed. Because Ticketmasters website ended up having a meltdown. And then after that, Ticketmaster announced that they would be canceling the public sale the following day, just leaving consumers and bands just in the dark and confused and angry. And so we wanted to have you here because we know you’ve worked on some ticket reform legislation. And so you have some pretty good insights into what the problems facing the ticket industry are. So let’s start there. What do you think, is the problem with Ticketmaster and the ticketing industry at large?
Senator James Skoufis 03:26
There are very few problems that Ticketmaster faces, they have the the deck is very much stacked in their favor, this system is rigged in their favor. It’s the fans and many, many of the other stakeholders who face all of the problems, most of which are a result of ticketmasters monopoly that’s really at the core of the situation years that we have a monopoly in the primary ticket selling space. And with a monopoly comes all of the associated problems, which is fundamentally if a fan, if a venue, if an artist, if a promoter, whoever else has a problem has an issue. They have no alternative. That’s the definition of a monopoly. You control all the rules of the game. And if someone else has a problem with those rules, you know, they can basically remove themselves from the game or go along with what you’re proposing because there is no alternative. So Ticketmaster, look, you know, yes, the the platform crashed. I happen to think they have a pretty crappy platform, given the dominance that they have in the primary marketplace. i But that even aside, yes, of course, the demand is going to outstrip the supply. Even if Ticketmaster did everything right, given just how many millions more fans there are that wants to see Taylor Swift than there are tickets available. That’s just something that needs to be accepted. But Ticketmaster, They they really exasperate that problem that issue via their monopoly, and really driven by their greed. And so one example. And this is one of the dirtiest secrets in the ticketing industry, something called hold backs. So I guarantee you, and by the way, every media outlet should be asking Ticketmaster, and others associated with these Taylor Swift concerts. How many holdbacks do you have at each of these concerts? See if they’ll answer, they won’t, because the dirty secret is, they have 1000s and 1000s and 1000s of tickets that are held back at every single one of those Taylor Swift concerts, I guarantee that and so what’s the whole back a whole back is basically any ticket that is not put up at the on sale for the general public. And those tickets that are not, they are literally held back for VIPs for quote, unquote, friends and family. And one of the more pervasive means these days is for these platinum credit card clubs and these other sort of privileged clubs that exist that you know, get special access to tickets that the average fan does not 1000s at every single concert, I would bet that some concerts, it’s 10s of 1000s that are held back. And so when you got i The average Taylor Swift Fan, you know, at the onsale, hitting refresh 100 times over the course of three minutes trying to get into the platform to get their hands on one of these tickets, and they don’t, and it quote unquote, sells out. That fan doesn’t realize that many of them never stood a chance, because 10,000 15,000 of those tickets were actually not available that they thought were available. And so Ticketmaster is at the core of so much of this problem, another one there, I can go on forever. But here’s another short number two, AI bots. Many people know about bots. These are the automated software programs that unscrupulous, scalpers use primarily to gobble up lots and lots and lots of tickets for hot shows. And so, you know, these these bots can, they can buy in a snap of a finger, you know, a few 100,000, even tickets. If the bot goes undetected by Ticketmaster. The good news is, one, this activity is illegal. It’s illegal at the federal level. It’s also illegal at the state level to we have state statute that prohibits it and criminalizes bot activity. The bad news is that at the state level, there’s been exactly zero enforcement actions taken at the federal level. There’s been exactly over the course of the past six years when this prohibition was enacted. There’s been exactly one set of enforcement actions at the federal level. So it’s totally unenforced, one of the reasons really, the primary reason it’s unforced is that prosecutors don’t have the information as to when this stuff happens. Ticketmaster does, Ticketmaster does have plenty of technology. They’ve invested a lot of money to try and catch bot activity when it happens on their platform. And they do catch some of it. But then they just deal with it internally, you know, they’ll grab the tickets back, no, we’ll block an IP address, whatever the means is they deal with it within their company. They ought to be mandated, when they identify bot activity, they ought to be mandated to refer that activity, that criminal activity to prosecutors, they do not. And so as a result, bot activity continues, because there’s really no deterrence. You blocked this IP address. Okay, next show, we’re going to try and figure out a different way to route our servers and, you know, get our bots back into your platforms. So Ticketmaster, is a monopoly whether regulators deem them or not. i It’s and as I’m sure we’ll talk a little bit more, you know, we do now have finally a Department of Justice investigation that was revealed that is taking a look at AI antitrust violations they should have never been allowed to merge with with Live Nation many years ago that created this monopoly. And as a result of the monopoly, we have all these other problems that certainly fans but other stakeholders also have to deal with.
Alexander Morse 09:29
Now we know how bots you outlined how bots can hurt consumers by gobbling up 1000s of tickets with with automated software. And so just you and I would not be able to those tickets aren’t available to us because someone would greater technology can snap those up. But going back just a minute to those hold backs. Our artists and venues similarly affected or do they stand to benefit from holdbacks? Are they are they in on the game or is this something going on at Ticketmaster and the ticket brokers.
Senator James Skoufis 09:56
Yeah, so it varies. I in some cases Yes, they are in on the game. And you know, there’s revenue sharing agreements for hold tickets that are held back between some artists and Ticketmaster and other stakeholders here the credit card companies, etc. And, but it really does vary. There are other artists that you know, are not involved in that decision making process. I and it’s really and this is it’s an important point. The only artists that have leverage with Ticketmaster are the real real a list celebrities, the A list artists, and it’s a very small handful of like the Bruce Springsteen’s of the world of Taylor Swift. So the world they have leverage with Ticketmaster ticket master wants those shows, I and they want them to do as many shows as they possibly can humanly can. And the artists actually do have significant say there in what the price points are for those tickets, and whether tickets are held back, and how many and to whom, and some other factors as well, outside of that very elite class of artists, artists do not have leverage. And Ticketmaster goes to the B list to see listed the list artists and say, Okay, here’s what the price is going to be, here’s where the venue is going to be, here’s how many tickets gonna be held back, because they feel that they can do that to the non Taylor switch, switch. So the world and again, the way the system is structured, and so I was asked this the other day, oh, you know, there’s something that Taylor Swift can do about all this? And the answer is, yes. She’s one of the few that has this leverage. And if she could, especially as a collective, talk to and organize with and coordinate with the other a list artists that are out there, where they get together, and they basically signaled to Ticketmaster, we’re done with you, unless you change your ways. That would be impactful. B list C lists D list, artists can’t do that. They don’t have that same leverage. You know, this leverage idea. It reminds me actually, of Pearl Jam’s battle with Ticketmaster back in the 90s. And if Pearl Jam in the 90s, was as big or maybe, maybe not, but very big, like Taylor Swift is and they weren’t able to take down Ticketmaster in this respect. You’re right. And so Pearl Jam was really one of the first if not the first, AI to really sound the alarm from, you know, again, sort of that elite class that that they belong to. And you’re right, you know, they went to Congress, they testified at hearings, I they were very, very public. And by the way, they did incredible credit for doing what they did, because most are, quite frankly, they’re afraid of going public. Because no, if you’re not, again, in that elite class, especially, there are repercussions associated with, you know, trying to take a hammer to Ticketmaster. And so, you’re right, though, you know, and subsequent to the early 90s, and then sound the alarm, it’s gotten worse, because you have had that merger with Live Nation. And so so yeah. And that’s why I think it is important that it’s not just one artists out there doing this, and it’s got to be a more coordinated effort. Well, while we have you here to talk about a coordinated effort, let’s talk about what’s going on at the New York State level. So I mentioned that you’ve worked on some ticket reform legislation over the last couple of years. You mind walking us through what you were drafting and working on? Sure. So first, a couple of years ago, just to lay the backdrop here, I’m chair of the investigations committee, and we we did a full investigation into the ticketing industry, and especially the predatory practices. Within the ticketing industry, we produced a very lengthy report, we sent that document requests to all the stakeholders got lots of great information and had a hearing. And from that effort, came a real omnibus reform bill that that I introduced, I had the support of many of my colleagues in the Senate, and that really formed the Senate position in the negotiations to try and reform this space. Every three years, the ticketing laws sunset in New York state they expire. And that is we talked about leverage. Every three years, we have leverage to try and make changes because I, as much as the industry loves the status quo, and they don’t want reforms. They really don’t want the current law to expire. And to give you an example, one of many examples as to what that would mean. If the current ticketing law ever expired, I the resale laws would revert back to really decades I forget exactly how many years but a couple decades, it would revert back to old law that kept the resale of tickets to $2 above the face value. It would literally now fans would love it quite frankly, I mean, there’s there’s a fair argument to be had there, but it would literally I it would it would eliminate the resale industry in New York State, StubHub, vivid SeatGeek. Every broker, they’d be out of business in New York state. And so basically every industry stakeholder has something in the current law that if expired, would be cataclysmic for them. And so we have this leverage to try and make changes every few years. This year, we had negotiations. And again, the Senate came with the omnibus bill that I introduced. And just as an outline, we truly tried to touch a whole bunch of things. We mentioned bots, and mandating reporting their AI, we updated the professional reseller licensure requirements. We wanted to ban the resale of free tickets, which is a big problem with some charities and non and not for profit organizations. Shakespeare in the Park gives out free tickets, that unscrupulous people then try and resell at a profit. We wanted to ban something called speculative ticketing, which is basically when a broker or somebody goes out and says, Well, I don’t have a ticket in my hand yet, but pay me now a lot of money for this Super Bowl ticket that I’m going to do my best to try and get for you. And it’s really I would argue in nefarious practice, we sought to enact all in pricing, which I’ll get to in a little bit. We were looking to reform how fees and price floors and other pricing mechanisms. I worked really to Ticketmaster and the resellers advantage and reform how I those fees and price floors works leveled the playing field for fans wanting to address holdbacks, really put a strict low cap on hold backs and require disclosure of how many tickets were being hauled held back at each show. And importantly, I the one thing that I think that we in the state can do to take a crack at the Ticketmaster monopoly. We can’t you know, we’re not the Department of Justice. We’re not the FEC. And we can’t like literally break up Ticketmaster, that’s a federal role to enforce those antitrust laws. But the one thing that we can do in New York, which I proposed in this bill would have been to ban what are called exclusivity provisions in contracts between Ticketmaster and venues. So right now, what happens is a venue will go to Ticketmaster say, Okay, we want to use your platform for this show that we’ve got coming up. And then Ticketmaster comes back and says, Okay, sure. But here’s our contract. And if we do the show, then you’re obligated to use us for every single show at your venue. It is basically a reinforcement mechanism. I for ticketmasters monopoly, it literally prevents anybody else from working with the venue to sell tickets. So we were looking at prohibits those provisions. So that was a Senate position. The helpful, I don’t know if it was helpful. But the one layer of this that certainly removed the complication was that the governor wasn’t really involved in these negotiations. It was strictly an assembly Senate issue. And why is that? Because whatever we sent to the governor, she would have to sign because the alternative would be to let the law expire, which she would never do, and everyone would not want her to do. And so basically, it was like whatever we came up with, we’re send it to you. And the expectation is that you have to sign this because you have no alternative. So it was an assembly Senate negotiation, the assembly, I was very recalcitrant to really any reforms. And it was a difficult negotiation. I and I get it like they, among other factors, many other factors, you know, they were sensitive to eye to live entertainment coming out of COVID, and not wanting to rock the boat too much. And certainly I shared that sensitivity. But these reforms were needed before COVID, they’re gonna be needed after COVID COVID, I think is irrelevant to much of this conversation. And so what we wound up with was a very slimmed down set of reforms. Now, these are meaningful, and two of them in particular, are very meaningful. But there’s still a lot of work to do. So what do we get at the end of the day one I mentioned before all in pricing. We’re the first state in the country to now have this and effectively, anyone that’s bought a ticket to a live event before knows this well, which is you find a seat at a price you’re willing to pay on a platform and you make a click. And then on the second page, you spend some time putting your contact information, click Next page, you put in your credit card information, click Next page, you accept the Terms of Service five clicks later, you’re at checkout page. And now the $50 ticket that you thought you were buying has a $19 convenience fee and a $14 service charge and an $11 delivery charge. And now that $50 ticket is $85 I and so it’s a classic bait and switch, you’ve spent 20 minutes now putting all this information in, and like you feel like you know, it’s sunk cost, I guess I’ve got to buy this ticket. So and by the way, the other problem with this is you can comparison shop, especially on the resale side, I it would be great if you just knew what the price was before spending 20 minutes. And then you could check it at vivid versus StubHub versus CPQ. And see where you can get the best deal for a comparable ticket comfortable seats, you can’t do that if the fees are dropped in at the very end. And so all in pricing requires those fees to be placed all the way up front in the listing before you make even a single click i and that is a really, really pro consumer reform that we got done. Another something called face value disclosure. And so on the resale side, secondary marketplace, I right now are up until this law, you have no idea as a consumer, whether you’re getting a good deal, a bad deal, whether the tickets being marked up 10 times was being discounted, because you don’t know what the context is. Face value disclosure requires that resold ticket to disclose what the original price was for that ticket, what was originally paid for that ticket. And so that again, first state in the country to do that. And that was included in our enacted bill, there are a couple of other more minor reforms, for example, we prohibited delivery fees if there is no delivering Go figure. So if a ticket is emailed, there cannot now be a delivery charge if the show is in New York State, and so but the two big ones were all in pricing and pay sign disclosure, there’s a lot more work that needs to be done. I you know, I hope we get an opportunity sooner than two and a half years from now. But at the latest, you know, we’ll have another crack at it then.
Alexander Morse 22:11
Well, first, I’ll say as an avid concert goer and live event enjoyer. Thank you. I appreciate that. You know, just a quick note about all in pricing and hidden fees, I would used to go to a box office instead of shopping online, and normally wouldn’t have to pay those fees. But in recent times, box offices are closed venues aren’t staffing it and they’re they’re selling off to Ticketmaster and then I’m stuck facing some of the problems that consumers are facing every day.
Senator James Skoufis 22:40
box offices are becoming unfortunately a relic of the past. And everything is being moved online. You’re right. So that sounds like there’s a lot going on within the state legislature. And it is interesting that the laws will sunset every three years, which gives the Senate the assembly and other stakeholders an opportunity to evaluate what’s worked, what hasn’t worked, what gaps are missing. Just to just to clarify, is this first legislation still enacted or had it sunset, and we are looking forward towards new legislation? So we just enacted what I described back in May or June, it took effect a couple of months after that. Now there has been an issue with enforcement. And I’m in talks with the Attorney General’s office to make sure that on pricing and face value disclosure are being properly implemented on behalf of fans. But that law is in effect, we pass it in time such that the underlying ticketing law did not sunset. And so basically what I just described was was added into is a supplement to the underlying the previously existing ticketing law.
Alexander Morse 23:53
Got it. All right. Well, sounds like New York State is always revisiting, always making sure that consumers have greater protections and making the ticketing industry not have such a vise grip on the rest of us. So moving forward to the federal level. You mentioned that there’s a Department of Justice investigation, Senator Amy Klobuchar proposed a Senate hearing into Ticketmaster. Do you care to comment on what’s going on at that level? And what you hope to expect comes out of it?
Senator James Skoufis 24:22
Yes, I know as much as I as anyone else does on this, you know, the Department of Justice. You know, they shared that actually, prior to Taylor Swift, and this whole fiasco, they had launched a an antitrust inquiry into ticketmasters practices, and which is welcome news. At the end of the day, the solution to much of this problem is breaking up Ticketmaster. And I know breaking up a company sort of a difficult idea to wrap one one’s mind around, and certainly I don’t think has happened in a very long time. But we do have antitrust laws for a reason. And if this is not the perfect example, as to why antitrust laws exist in this country and need to be enforced, I don’t know what it is. And so I’m glad to see DOJ is is engaged here, I have no idea how far along they are, I have no idea in terms of the details. And if there are specific elements of the company they’re looking at, or just a very broad examination of whether they’re violating antitrust laws. So I don’t really have much, I don’t really have any additional insight. But my my reaction is, is a certainly a positive one, I really, really was happy to see that headline, and the news when it broke. And I think that Congress has a real opportunity here, strike while the iron is hot. You’ve got millions of constituents in everyone’s districts and states around this country who are clamoring for reform to this very, very obviously broken system. And at some point, you know, the fire is going to simmer down again, and you know, people are going to turn their attention to the many other issues that that are out there, and rightfully so. But while everyone’s attention is on this, do something about it. And unlike so many hot potato issues that elected officials deal with, this is one of those wonderful like 99 to one issues, you pull the public on, like any of this stuff, and 99% of people want you to do it. I and so you know, yeah, take on, take on Ticketmaster, prioritize your constituents over a monopoly. And it’s good politics, and it’s certainly good governance.
Alexander Morse 26:45
I think you summed that up nicely, Senator. Well, thank you again, Senator Skoufis for joining us take the time to talk about the ticketing industry, some of the problems facing it and some of the work that you have been championing to help protect consumers. We really look forward to talking to you again about any new developments that come along.
Senator James Skoufis 27:04
Thanks, Alex, I appreciate you guys spotlighting this issue to thanks very much.
Alexander Morse 27:18
Thanks again to New York State Senator James Skoufis for joining us to talk about the work he is doing to protect consumers for unscrupulous ticket practices and keeping the ticket industry in check to ensure fair play for all live event fans and stakeholders. If you liked this episode, please rate subscribe and share. It will help others find the podcast and help us deliver the latest and public policy research. All of our episodes are available for free wherever you stream your podcasts and transcripts are available on our website. Special thanks to Rockefeller Institute staff Joel Tirado, Heather Trela, and Laura Schultz for their contributions to this episode. Thanks for listening. I’m Alex Morse. Until next time. Policy Outsider is presented by the Rockefeller Institute of Government, the public policy research arm of the State University of New York. The Institute conducts cutting edge nonpartisan public policy research and analysis to inform lasting solutions to the challenges facing New York state and the nation. Learn more at rockinst.org or by following at Rockefeller inst. That’s Rockefeller i n s t on social media. Have a question comment or idea? Email us at [email protected].
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