Digital Economy Bill

Debate between Damian Collins and John Penrose

3rd reading: House of Commons & Legislative Grand Committee: House of Commons & Programme motion No. 3: House of Commons & Report stage: House of Commons
Monday 28th November 2016 Commons Chamber

[Damian Collins]

On behalf of the Select Committee, I am grateful to the hon. Lady for her words. I was certainly shocked by some of the things I heard in that Committee hearing.

[John Penrose]

I want to ask the Chair of the Select Committee whether, in among the penetrating questioning that we have heard about, anyone on the Select Committee asked the people they were interviewing why they were not installing any of the safeguards that are already available. They are already being successfully used in sporting and entertainment events. If those safeguards already exist, why should we be expected to introduce a red tape-heavy legislative solution to a problem that the industry could solve for itself? Indeed, it could have solved it several years ago had it cared to do so.

[Damian Collins]

Those issues were covered in the Select Committee hearing; they are there in the transcript for all to see. Some venues have introduced direct selling technology, and it can work. However, as my right hon. Friend the Member for Maldon said, it would be unacceptable to many consumers if our blanket response to this crisis in the ticketing industry was to say to the industry, “Solve it yourself.” That would place large costs and burdens on the venues, and it would be particularly unfair on the smaller ones. This problem affects not only the blockbuster events at the O2 or the Royal Albert Hall but events at small venues all around the country. I even saw tickets for a comedy event next year at the Winter Gardens in Margate being sold at three or four times their face value on the secondary market. This is affecting all sorts of venues.

More seriously, however, it is not in the interests of some of the primary ticketing sites to report the problem, because they own the secondary sites that are making the massive profits. The profit growth in the secondary market stands at between 30% and 40% a year. It is true that at the moment more tickets are sold through the primary market—through companies such as Ticketmaster —but very large profits are being made in the secondary market.

[John Penrose]

I completely agree with my hon. Friend on the diagnosis of the problem. I think everyone here shares the sense of injustice and iniquity that he is describing. My concern, however, is that it is not just the punters who go to see these events who are being affected. The talent—the musicians, the actors and the sportsmen and women—are also losing out because they are getting less money from the initial ticket sale when the ticket is sold on at an inflated price. They and the punters could all win if more of that value could be captured for the talent and if the punters were able to pay less. Both sides therefore have a huge interest in cutting out the middle man, and I do not understand why they are not doing it.

[Damian Collins]

My hon. Friend is right to say that it is in the interests of many different stakeholders in the industry to do that, but at the moment it is not happening across the board. Some of the bigger artists and events have been able to introduce these measures, but it has been difficult to do it uniformly.

We must ask ourselves why the primary ticketing sites do not report the mass use of bots to the authorities. Why did they not report it as suspicious behaviour? It would be easy for them to do so. We heard in evidence to the Committee that it is so easy to do that the primary sites’ biggest customers often have favourable terms of trade. Their own secondary ticketing sites certainly have favourable terms of trade with people who are bulk selling vast numbers of tickets. It is easy to identify who they are, and it would be easy for a primary site to report them if it became suspicious because they were selling thousands of tickets only minutes after they had gone on sale on the primary ticketing site. If they are able to do that so quickly, they must be using bot technology to pervert the market. It does not get reported, however, and we must ask ourselves why that is. Is it because they are making too much money?