OTTAWA -- Kanata resident Laura Pelletier wanted to surprise her boyfriend with tickets to see Great Big Sea at the Ottawa Civic Centre. She logged onto Ticketmaster, was directed to a subsidiary website and bought two tickets for $343 each. A little expensive, she thought, but worth it for great seats to see the popular Newfoundland party band. "I thought I'd give him a great surprise."
Pelletier was later horrified to discover she had purchased scalped tickets. They'd been sold by Ticketmaster for $49.50 each, then flipped and resold to Pelletier for almost seven times that much. The scalper? A seller using TicketsNow - a website owned by none other than Ticketmaster.
"I was really mad," says Pelletier, who was confused by the link from Ticketmaster to the TicketsNow website. "I thought I had been scammed."
The rage of people like Laura Pelletier has propelled government investigations into Ticketmaster in Canada and the U.S. during the past several months, ever since angry Bruce Springsteen fans in New Jersey complained they were re-routed from Ticketmaster's website to TicketsNow, where seats were sold at jacked-up prices. In Canada, three class-action suits have been launched against Ticketmaster. The federal Competition Bureau is investigating whether Ticketmaster is engaging in anti-competitive behaviour. Ontario has introduced a law that would cripple TicketNow's operation in the province by making it illegal for related primary and secondary ticket sellers to sell tickets to the same event.
Ticketmaster's practices have made it a handy target for fans who are upset about how difficult it is to obtain tickets for popular concerts and sporting events without paying exorbitant prices to scalpers.
But Ticketmaster's TicketsNow is just one of many scalping websites in a booming industry. The days when scalping was synonymous with shady characters hawking tickets outside arenas are gone.
Scalping has migrated online, where it's easy to buy and sell tickets, often anonymously.
The ticket resale industry will be worth an estimated $3.4 billion in the U.S. this year, according to a report by Forrester, an independent U.S. market research company. Forrester projects sales will rise to $4.5 billion by 2012.
Scalping may have back-alley roots, but it's going mainstream fast. Fans are growing more comfortable buying resale tickets online, especially affluent, tech-savvy men, the report says. Buying online means fans avoid dealing with a "shady guy in a trench coat," the report notes.
In Ontario, it's illegal to sell tickets for more than their face value. But the anti-scalping law is widely ignored, and rarely enforced.
Hundreds of scalped tickets are offered for sale online any day of the week for Ontario events. Couldn't score tickets to Elton John and Billy Joel at Scotiabank Place June 1? Last week, TicketsNow was offering 205 tickets at prices ranging from $134 to $1,070. Feel like attending Leonard Cohen's sold-out show at Ottawa's National Arts Centre? No problem, if you have the cash. Dozens of tickets for the May 25 show were available last week online for between $150 and $1,000.
Scalpers apparently don't have to worry too much about being arrested. There have been only a handful of convictions under Ontario's Ticket Speculation Act during the past decade - an average of 23 a year since 2000.
The growing industry raises questions about whether scalping can or should be controlled. Does regulation simply drive a booming business underground, creating more opportunity for fraud? Should it be the job of governments to ensure fans have a fair shot at obtaining face-price tickets to an AC/DC show?
The issues are as complex as the industry. Online scalping has become Wild West territory, where corporations rub shoulders with small-time entrepreneurs, fraud artists and people just trying to unload a couple of extra concert tickets on Craigslist.
"It really has sprung out of control," says Randy Berswick, co-ordinator of the Bryan Adams tour that comes to the National Arts Centre on Aug. 12. "What people do now is buy four tickets, put them on their credit card, then sell two on eBay to pay for their own tickets. You can't stop it.
"On the Internet now, you can get everything in a heartbeat."
There should be some controls, but reputable websites such as TicketsNow provide a valuable service, he says. "A lawyer is not going to spend half an hour on Monday morning on his phone, trying to buy a couple tickets. His time is worth more money than that. He calls a ticket broker."
Ticketmaster and eBay jumped into the business recently, buying two of the largest online reselling sites, TicketsNow and StubHub, respectively.
The industry is becoming respectable and the vocabulary has evolved to match. The word "scalper" does not appear on most websites. In industry parlance, it's "ticket reselling" in the "secondary market," and the people doing it professionally are "ticket brokers." The TicketsNow website says it offers "premium" seats at "market value." In other words, it charges what fans are willing to pay. Supply and demand has always driven the industry.
Scalping has existed since "time immemorial" and government regulation won't end it, says Michael Hershfield, CEO of online seller LiveStub.
"How are you going to track down tens of thousands of participants? It's not on the street corner. It's hard to find every single Internet user that's selling their tickets."
He says governments should stop trying to ban scalping, and concentrate on ensuring it's done in an "open and transparent way so consumers are not getting screwed." His website offers fans information about the average price for resale tickets to help them price shop.
Hershfield, a 28-year-old Toronto lawyer, quit his day job, lined up an "angel investor" and set up LiveStub with a partner last year.
Scalping - selling tickets above face value - is legal in many jurisdictions across North America. But the industry struggles with its past, says Hershfield. "It was once considered an illegal business, an illicit business. So many of the practices that were going on … are outgrowths of that."
Hershfield understands the urge to regulate scalping. Fans demand it.
"Why are politicians so engaged in this issue? It's because there is something tremendously passionate, exciting and sexy about a live event. Going to an event, to a performance, or going to a show, a game, has an element of something much deeper than other things that consumers do . . . So it makes for good politics."
Ontario Attorney General Chris Bentley says the law he introduced April 29 was a response to fan complaints. "They believe the government, where they can, should act. They want something done. They want to be protected."
Ticketmaster vice-president Joe Freeman says the law unfairly singles out TicketsNow. He says the legislation is apparently based on the mistaken assumption that Ticketmaster diverts tickets to TicketsNow, where prices are higher. "That's an urban myth. It's simply not happening."
Windsor lawyer Jay Strosberg, whose firm is involved in three class-action suits against Ticketmaster, in Ontario, Alberta and Manitoba, the provinces where scalping is illegal, says governments should impose other consumer protection laws. "I think of all the conduct that should be regulated, this deserves regulation."
Besides, he asks, if scalping is illegal in Ontario, why are reselling websites allowed to operate freely? When Strosberg's firm, which specializes in class-action suits, filed the suits in Ontario against Ticketmaster in February, phones were ringing off the hook, he said. "Everybody is very upset because they overpaid . . . I think we have touched a nerve here."
About 2,000 people have contacted his firm in connection with the Ontario lawsuit. The suit alleges, among other things, that TicketsNow violates the anti-scalping law by selling tickets above face value.
One of the plaintiffs is a Toronto man who paid $535.65, including service charges, on TicketsNow for two tickets to see Smashing Pumpkins. The tickets had a face price totalling $133.
In a similar class-action suit filed in Manitoba, the plaintiff is a woman who says her teenage daughter used her mom's charge card to buy four tickets through TicketsNow to a Carrie Underwood concert in Winnipeg for $917.75, including service charges and delivery. The face price? $57 each.
Strosberg says it will be several years before a judge decides whether the class-action cases can proceed. Ticketmaster has not yet filed a defence to the lawsuit. But Ticketmaster officials say the company is not breaking Ontario's anti-scalping law. TicketsNow does not own the tickets on the website or set the prices, said Ticketmaster's Freeman. The company just operates the website.
"It's a marketplace, it's a website that links buyers and sellers." TicketsNow collects the money from the buyer, remits it to the seller and charges fees to both.
The Ticketmaster name is probably reassuring for some fans, who would rather shop at TicketsNow than "fly-by-night scalper.com." Still, the corporate link between the two has upset some fans, and confused others.
Pelletier, for instance, says she never would have bought tickets to see Great Big Sea at Ottawa's Civic Centre if she had known they were scalped. "I'm not the kind of person who would actually pay $343 for tickets in the nosebleed section, no matter how popular the group is."
When Pelletier began her search on the Ticketmaster website, she requested tickets in the lower-level stands.
She was directed to TicketsNow, but didn't realize it was a separate company. The top of the website reads: "TicketsNow. A Ticketmaster company."
"I didn't clue in that it was anything but some sort of sub-branch of Ticketmaster."
The tickets were $343 each, plus a "service charge" of $102.90 and a shipping charge of $29.95. Grand total: $818.85. She was shocked. "Oh my God, that's a lot of money!"
But Pelletier figured it was probably a "fairly normal price" for good seats to see a popular band. Like most resale websites, TicketsNow does not reveal the original ticket price.
Pelletier received an e-mail confirmation of her purchase from TicketsNow. The tickets arrived later by mail.
When she checked the tickets a few days before the March 21 show, she discovered they were marked "upper level." Thinking it was a mistake, she phoned Ticketmaster, and was referred to TicketsNow, where an agent said she was out of luck because she had agreed to buy the tickets.
Pelletier was puzzled when the agent explained that TicketsNow was a "sister company" of Ticketmaster and a "ticket reseller."
Then she read the print at the bottom of the TicketsNow e-mail confirmation: "TicketsNow provides you with the service of locating tickets that typically are not available through standard channels. Our tickets are provided by individual listing sellers so the price you pay is often higher than the face value price printed on the ticket."
She looked more closely at the tickets. They list the original purchaser as "Gariy Farladanskiy," and carry an admission price of $49.50 each.
Farladanskiy apparently gets around. His name is listed as the original purchaser of scalped tickets bought online by a woman in Alberta for a show by country singer Charley Pride, the Edmonton Journal reports. Jacqueline Sharp paid $1,210 on Abstix.com for a pair of seats to Pride's June 20 show in Edmonton. The original price on the tickets was $58.50 each. And Ticketmaster was still selling tickets for that price, the paper reported.
Pride was so upset when he heard the story that last month he paid a surprise visit to Sharp's home in Leduc, Alta., repaid her money and gave her floor seats to his show. "I don't think it's right," Pride told Sharp. "I wouldn't like paying that much money to see myself."
Pelletier says she's furious, but also embarrassed. "I'm really upset and really angry with the company, but I'm also upset with myself. I should have been more careful."
She and her boyfriend didn't even see Great Big Sea. They were both under the weather. The thought of sitting beside fans who paid $49 for their tickets made them feel worse. "Every time we thought about going, our stomachs turned." She gave the tickets to her boyfriend's mother. "It was a good show, even if the seats were a few rows from the ceiling."
Ticketmaster's Freeman said he regrets Pelletier had a bad experience. But he says she must have agreed, while buying the tickets on the Ticketmaster website, to "click through" to TicketsNow, which states clearly that tickets are often sold above face value.
Pelletier's story is unusual, since most fans buying from TicketsNow realize the tickets are resold. Ticketmaster has since removed the direct links between Ticketmaster and TicketsNow.
TicketsNow has made other changes to help consumers, says Freeman, such as no longer allowing tickets to be posted before they go on sale to the public. Other resale sites, such as StubHub, haven't done the same, he notes. "By contrast, the other sites are probably laughing at us as we try to implement this consumer-friendly measure."
As for Pelletier, she's sent her story to the law firm behind the class-action suit in Ontario. "If they're looking for another witness ... "
