Dynamic Ticket Pricing

Debate between Pete Wishart and Caroline Dinenage

Tuesday 10th September 2024 Commons Chamber

[Dame Caroline Dinenage]

I could not have said it better myself—that is exactly what it is. We understand the laws of supply and demand, but we also understand the laws of transparency and fairness. What is more, once ticket purchasers were through to the payment screen, fans realised that they only had a very limited time to decide whether the hugely inflated prices were worth paying. Someone compared the ticket purchase after such a long wait to the dopamine rush of a gambler. The £150 to £400 price increase meant that the transaction was no longer a choice, but more of an impulse buy.

I have heard many people say that the dynamic pricing method is used effectively in other sectors, and that the technology is a perfect demonstration of the dynamism of a free market. Even within the music industry itself, there is dispute as to whether dynamic pricing has a place and is an acceptable way forward.

[Pete Wishart (Perth and Kinross-shire) (SNP)]

I congratulate the hon. Lady on securing the debate. I was hoping to secure a debate on the subject myself but she beat me to it. There seems to be an issue about who is to blame for all of this—no one is taking responsibility for the issue of dynamic pricing. Ticketmaster is blaming the management and artists, and they are blaming those who were promoting the events. As she is now the Chair of the Culture, Media and Sport Committee, will she look into this on behalf of the House and find out exactly why this has happened, with a view to having it stopped and outlawed entirely?

[Dame Caroline Dinenage]

I am very fortunate to have been re-elected as the Chair of the Culture, Media and Sport Committee, but we do not have any members of the Committee yet. Any decisions about what the Committee will look at will very much be a group decision jointly taken, but this is certainly something I will be putting forward. I know the Minister has already announced some consultation of his own.

To return to dynamic pricing and the laws of supply and demand, mentioned by the hon. Member for Strangford (Jim Shannon), this is something that is used across different marketplaces. Uber employs a smart dynamic pricing mechanism that adjusts the cost of journeys in line with changing variables, such as traffic and current rider-to-driver demand. Hotels and airlines are another market that uses dynamic pricing, but they are very different. If people are stuck at Waterloo station, as I sometimes am, an Uber is not the only option of travel and, when people go on holiday, multiple airlines offer flights to the same city and different hotel options, but when it comes to live music, particularly in cases such as this one, there is one artist and one opportunity to buy a ticket.

The imperfections of the dynamic pricing mechanism were obvious to anybody who attempted to buy a ticket on this occasion, but whatever the rights and wrongs of its suitability for music ticketing and this market place, the most important issue is that fans were not warned about the use of dynamic pricing before they entered the digital queue. Those are the faults that led the Competition and Markets Authority to open its investigation into this debacle. It meant that people had no idea how much a ticket would cost when they logged in. Many fans ended up paying at least double the original listing price of £148, so four standing tickets could cost an eye-watering £1,400 once service and order processing fees were included. The CMA says that it will investigate whether fans were given “clear and timely information”.

Any free market economist would call this a classic case of information asymmetry. There was certainly a lack of clarity over how high ticket prices might eventually go, with the additional chaos of a time limit putting pressure on fans to make an imminent decision about whether they were going to buy.

Ticketmaster claims that the dynamic pricing mechanism is the best way to deter ticket touts, the logic being that any tout buying tickets in bulk would increase demand and therefore see his or her prices and margins slashed. The Guardian has already said that secondary ticketing platforms are advertising more than 4,500 tickets for this tour already, including from one tout who claims to have at least 33 tickets for Cardiff, Wembley and Murrayfield listed, for a combined price of over £26,000.

I am glad that this summer the Government announced a consultation on the secondary ticketing market, where tickets are sold in bulk by touts who often use bots to scout for tickets at face value and sell them well beyond the market value, but will the Minister set out the parameters and timescales for the work? When will it happen and what is it likely to include? He has now announced that the investigation will be widened to consider dynamic pricing and what happened in the Oasis situation, so can we have a reassurance that the eye will not be taken off the ball of the original consultation that he announced in the summer?

There are so many aspects at play. This method of resale is also the culprit for a large amount of money lost to fraud, with Lloyd’s estimating that £1 million was lost to scammers during Taylor Swift’s Eras tour alone. Will the Minister tell me whether the secondary market consultation will include conversations with digital search engines that are signposting customers into the hands of touts and not doing enough to get them direct to principal sales sites?

There is scope for an entire primary market review and for ticketing to be reviewed on a much wider scale. The Oasis episode has opened the eyes of fans to potential anti-competitiveness within the industry. As complaints about the ticketing process began to flood in, Oasis said it was their management and promoters who had agreed a dynamic pricing strategy with Ticketmaster. But, of course, their three tour promoters all have links to Live Nation, Ticketmaster’s parent company and, in effect, they are all the same party. So that party is making money hand over fist through the system, which keeps everything under the Live Nation umbrella.

For a typical tour, a Live Nation subsidiary promoter might take 10% of the face value of a ticket. A service charge of perhaps a quarter of that face value will then be applied, and some of that money will be going to Live Nation-owned Ticketmaster. The venue will take a cut at this stage, which, in all likelihood, will be a Live Nation-owned venue, too, as it owns 28 festivals and venues UK-wide. The process is repeated at resale, if people go through Ticketmaster at a higher cost than before, leaving Live Nation with an even greater cut.

The Minister does not need to be a public intellectual to see that there is a real perverse incentive for Ticketmaster to see tickets in the hands of touts. He will know that the US Department of Justice has slapped Live Nation with a lawsuit, citing anti-competitive conduct, while it is now well established that the company has a near monopoly in the UK.

Dynamic pricing is quite an effective way of rewarding a near-monopoly, with no upper limit on ticket prices, meaning a greater cut for the parent company. The great sadness of all this is not only that the system is punishing the fans—in this case, those Oasis fans for whom the music was so totemic, so life changing back in the ‘90s—but that, to add insult to injury, there is no trickle down to the live music ecosystem, like the grassroots music venues that Oasis first played in while honing their skills, the venues that made them, such the Boardwalk in Manchester and King Tut’s in Glasgow.

Although Oasis have since announced further tour dates, tickets to new dates will be sold at face value via invitation-only ballot. I cannot help feeling that the fans who paid through the nose via dynamic pricing are going to feel very hard done by.

I encourage the Minister to look at ways to amplify fans’ voices within the live music ecosystem. He might start by responding to the Culture, Media and Sport Committee’s report into grassroots music, which I have already mentioned. It was published in May. I know that we have had the small matter of a general election since then, but I would like to know when the response is likely to be forthcoming and whether the Government are minded to accept its recommendations. The recommendations include one for a fan-led review of music—something like the fan-led review of football that was led by my still friend, my former hon. Friend, the former Member for Chatham and Aylesford, Tracey Crouch—to look at how the music pyramid functions and how the money trickles down from the big players to those small venues and fledgling songwriters and artists.

The recommendations included a targeted VAT cut, which to grassroots venues would have represented a final hour of salvation in a sector that is widely accepted to be in crisis, and a live music levy, which would take a small proportion of the service fee from the pockets of the big venues and bring them right down to the struggling businesses at the grassroots. What is most pertinent to me about all this is that, while many of the 28 venues and festivals in which Live Nation owns a stake are flourishing, grassroots music venues are closing at a rate of two a week.

I am sure that the Minister is aware that, of the 34 music venues in which Oasis played on their first tour back in 1994, only 11 are still open today. And those venues are so crucial. They are absolutely fundamental to incubate our world-renowned talent. They are the R&D department for the music industry. They are a massive feeder into something that is fundamental to the UK economy and crucial to our soft power around the world. In a ticketing market gone wrong, there might have been a gram of comfort to some of the fans paying through the nose for their ticket if they knew that, in paying it, some of the money was protecting grassroots music venues in their communities and germinating the Oasis of the future.

I know that, like me, the Minister wants nothing more than to see our musical talent continue to thrill fans both at home and around the world, but behind every great act is a chance performance at a low-capacity venue that is struggling to keep the lights on, that is at financial breaking point, and that is a hair’s breadth away from closing its doors.

UK Musicians: EU Visa Arrangements

Debate between Pete Wishart and Caroline Dinenage

Tuesday 19th January 2021 Commons Chamber

[Pete Wishart (Perth and North Perthshire) (SNP)]

(Urgent Question): To ask the Secretary of State for Digital, Culture, Media and Sport if he will make a statement on visa arrangements for UK musicians in the EU.

[The Minister for Digital and Culture (Caroline Dinenage)]

This Government recognise the importance of the UK’s world-leading cultural and creative industries. We recently demonstrated that commitment by providing an unprecedented £1.57 billion package of support to help them through the covid-19 pandemic. It is therefore entirely consistent that, during the negotiations with the EU, we pushed for ambitious arrangements allowing performers and artists to work across Europe.

Our proposals, which were informed by our extensive consultation and engagement with the UK’s cultural and creative industries, would have allowed UK musicians and other cultural touring professionals to travel and perform in the UK and the EU more easily, without the need for work permits. Regrettably, those mutually beneficial proposals were rejected by the EU. As a result, UK cultural professionals seeking to tour in the EU will be required to check domestic immigration and visitor rules for each member state in which they intend to tour. Although some member states allow touring without a permit, others will require a pre-approved visa and/or a work permit.

It is absolutely vital that we now support our touring sectors to understand the new rules associated with working and travelling in the EU. We are delivering an extensive programme of engagement with the sector to help them understand any new requirements. That includes working with Arts Council England and various other sector bodies, to help distil and clarify the new rules.

As my right hon. Friend the Secretary of State for Digital, Culture, Media and Sport has already made very clear, we will also look at whether we can work with our partners in EU member states to find ways to make life easier for those working in the creative industries in our respective countries. In the meantime, we will continue close dialogue with the creative and cultural sectors, to understand the ongoing impacts and ensure that that they have the right support at the right time to continue to thrive.

[Pete Wishart [V]]

That is an immensely disappointing response from the Minister. Touring Europe means everything to our artists and musicians: the thrill of that first tour, crammed into the Transit van with all your gear; four to a room in a cheap hotel in Paris, Rotterdam or Hamburg; using what is left of the fee for a post-gig beer; the dream of coming back on a lavish tour bus, staying at five-star hotels—gone, all gone. Musicians and artists are mere collateral in this Government’s obsession with ending freedom of movement.

Does the Minister acknowledge that visas and carnets will render such tours beyond the financial reach of future generations of new musicians? Does she appreciate that is not just our new musicians but the whole creative sector that will have increased costs and red tape? What will she say to the crews, the technicians, the set designers, the transport? We were promised by her predecessor that arrangements would not change. What has happened to that commitment? The EU said it was prepared to offer a 90-day deal. Why was that turned down? The Government said they were holding out for a better deal, but we have ended up with nothing. How could that happen? Given that the Minister’s approach is totally contradicted by the EU, will she provide complete transparency in all these negotiations?

Our constituents really care about this; 263,000 have now signed the petition organised by our artists, calling for this to get sorted. We do not want any more of the EU-blaming—we have had quite enough of that in the past few years; we just want the Government to fix this. The Secretary of State has said that the door is still open, so will she walk through and fix it out? Will she restart talks with the EU immediately, to get our artists the arrangements that they need? Will she let the music tour freely once again?

[Caroline Dinenage]

The hon. Gentleman is right to point out that this is incredibly disappointing news for the music sector—it is not the deal that we wanted; but I am afraid that in many other senses he has fallen for some very selective briefing. The EU did not offer a deal that would have worked for musicians. It is quite simple. The EU made a very broad offer, which would not have been compatible with the Government’s manifesto commitment to take back control of our borders. I remind the hon. Gentleman that the British people, the British public, voted for that at successive elections.

To the extent that the EU proposals might have covered music, they would not have worked for touring artists at all. The EU proposals covered ad hoc performances. They would not have covered support staff or technicians at all—which, as the hon. Gentleman will remember from his touring days, are essential. I would love him to explain to me how tours will happen without support staff or technicians, because although I am not a music professional, I cannot see how that could be the case.

The UK’s proposals were based on what those in the music industry said they wanted. We spoke to them long and hard about that. I am fascinated to think that the hon. Gentleman knows better than bodies like the Musicians’ Union. We fought very hard— [Interruption.] We fought very hard for what it wanted, but the EU would not play ball.

Let us focus on the future. If the EU is willing to consider the UK’s very sensible proposals, the door is open, and yes, I am very happy to walk through it. I will be the first to walk through that door. A mutually beneficial deal is not what the SNP Members want, though, is it? They voted for a no-deal Brexit, so under their plans, that would have been even harder. As those in the music industry have said, what they need now is clarity, not recriminations; and that is what the British Government are working to provide.

Devolution (Scotland Referendum)

Debate between Pete Wishart and Caroline Dinenage

Tuesday 14th October 2014 Commons Chamber

[Pete Wishart]

rose—

[Caroline Dinenage (Gosport) (Con)]

rose—