By Jon Hood
ConsumerAffairs.com
July 8, 2009
In the latest attempt to rein in Ticketmaster, Illinois Attorney General Lisa Madigan has reached an agreement with TicketsNow, a Ticketmaster subsidiary, to curb deceptive tactics.
The agreement is the result of Madigans investigation into TicketsNows marketing practices after receiving dozens of complaints about the high prices ticket brokers charged for Hannah Montana and Bruce Springsteen concerts and other popular events. Madigans investigation revealed that TicketsNows brokers were in the practice of creating customized Web sites where they resold tickets they had pre-purchased for high-profile events at prices significantly higher than face value while consumers believed they were buying face value tickets from the actual event operators.
As part of the agreement, TicketsNow will cease operating any Web sites that have misleading domain names and will refrain from affiliating with any Web sites that use similarly deceptive tactics. As a result of Madigans investigation, TicketsNow has already disabled more than 100 suspect Web sites.
Our investigation revealed that consumers who purchased concert tickets at TicketsNow Web sites often believed they were purchasing tickets from the actual event operators for their original value, Madigan said. This agreement will substantially impact how the TicketsNow online brokers market popular event tickets so that consumers clearly understand that they are making purchases from a ticket reseller at marked-up rates.
In the course of the investigation, Madigans office determined that TicketsNow, which is based in Rolling Meadows, Ill., was operating hundreds of affiliated ticket resale Web sites with misleading domain names that incorporated into the Web site URLs unique names of local venues, sports teams or performers. The TicketsNow-affiliated Web sites failed to clearly state that they were ticket resellers and had obtained tickets from secondary sources, such as season ticket holders, event promoters and venue operators, in advance of the public sale. As a result, consumers did not realize that they were ordering marked-up tickets from a TicketsNow-affiliated reseller.
The agreement with Madigans office also requires TicketsNow resellers to clearly and conspicuously identify themselves as ticket brokers and to expressly state that they are not affiliated with the venue and may sell tickets at above-face value. In addition, TicketsNow will no longer sell tickets to non-sporting events on any of its Web sites until after Ticketmaster makes the tickets available at face value to the general public, which will help curtail speculative ticket sales prior to the actual sale date set by Ticketmaster.
It's the latest in a series of lawsuits and enforcement actions against Ticketmaster, its affiliates and other online ticket sellers. In February Ticketmaster settled a suit accusing it of redirecting consumers to its partner TicketsNow.com in an effort to drive up prices. In May, TicketsNow was accused of ripping off loyal customers.
In the February settlement, thousands of consumers who tried to buy tickets to a show at the New Jersey Meadowlands by either Bruce Springsteen or the E Street Band were redirected to TicketsNow.com, where they were charged prices as high as four times the actual face value of the tickets. This in spite of the fact that original tickets were still available on Ticketmaster's own site.
Ticketmaster bought TicketsNow in January 2008 for $265 million. The purchase was designed to move Ticketmaster, already an industry giant, into the vaunted secondary ticket market. Companies like Ticketmaster are primary ticket sellers, meaning that they sell the original ticket.
Secondary ticket companies essentially act as online scalpers, where people who bought tickets on Ticketmaster can go and resell them for more than their actual worth. Depending on the event's popularity, ticketholders can make a handsome sum; a recent Garth Brooks event allowed some to turn an eight-fold profit. At the time of the acquisition, TicketsNow was the second largest secondary ticketer, behind only StubHub!, and Ticketmaster was already the number one primary ticketing company.
Looking at Ticketmasters's website, one would think that the partnership between the two companies is a roaring success and great news for consumers. The site proclaims that, The partnership between Ticketmaster and TicketsNow allows fans the greatest choice and access to live entertainment while ensuring reliability of service, convenience, and security.
The online ticket market has proved problematic several times over the past year.
In March, Pennsylvania Attorney General Tom Corbett announced a settlement with the fan website of child star Miley Cyrus, which offered $30 memberships in a fan club with the incentive of early access to ticket sales. The website, however, failed to inform fan club members that sales went public within fifteen minutes of first being offered to members. The site also offered pre-sale codes for early access to tickets, when in fact all tickets were already sold out. Under the settlement, 996 consumers got their membership extended by four months.
Additionally, Ticketmaster faces yet another suit regarding the bait-and-switch implicated in the February case. Phish fan John O'Hurley filed suit in federal court in Massachusetts. The suit says that consumers who log onto Ticketmaster are told that tickets are sold out and immediately rerouted to TicketsNow O'Hurley's confirmation e-mail said he had purchased nine tickets for a total of $2,064; the face value of the tickets, however, was $60.
