The 1 billion pound ($2 billion) industry for reselling sports, concert, and theater tickets in Britain must "clean up its act," but should not be banned, an influential group of legislators said on Thursday.
The resale of tickets over the Internet on Web sites such as eBay, Viagogo, and Seatwave has flourished in recent years, with ticket holders pairing up with willing buyers through exchanges, which take a small commission.
But the practice has angered event promoters who say it allows "parasitic profiteering" while giving nothing back to the entertainment industry itself.
For example, tickets for rock band Led Zeppelin's comeback concert in London last year that originally sold for about $245 were resold for an average $14,594, according to Seatwave.
The music industry is battling falling CD sales, but the live music scene is very strong.
The report, released by the government's Culture, Media, and Sport Committee, said the secondary ticketing industry had been transformed by the Internet and provided convenience.
But it warned that some resellers were engaging in dubious practices, such as advertising tickets before they had acquired them, and selling tickets that had been distributed for free to charity events. Some tickets are also not genuine.
"What I think causes understandable resentment is when artists or sporting clubs see (their) tickets...exchanging hands for huge sums of money and they get no benefit from it whatsoever," the chairman of the committee, John Whittingdale, told Reuters in an interview.
He said the committee and the government were reluctant to legislate, but if voluntary compliance couldn't be achieved, there might be no alternative.
Veteran promoter Harvey Goldsmith, who organized Live Aid and Live 8, told Reuters the report was "toothless" and said he was looking to start a marketing campaign to warn people about the dangers of using secondary ticketing sites.
"This is taking genuine, face-value tickets out of the market, which means a guaranteed hike in ticket prices," he said, adding that one official agency estimated that 23 percent of tickets sold in Britain were through secondary sites.
The unauthorized reselling of tickets for soccer matches or the Olympic Games is illegal in Britain due to security reasons, and the report suggested extending this approach to other events would result in confusion and a two-tiered system.
Instead, it welcomed a proposal from music management groups representing some of Britain's biggest acts, such as the Arctic Monkeys, to ask the exchanges to share some of the proceeds. In return, the music groups would offer legitimacy to the market.
Viagogo, Seatwave, GetMeIn, and eBay welcomed the report and the reluctance to use legislation, but disputed the need for what they said was a tax on secondary tickets, saying it would increase the price.
Viagogo has already signed a deal with Warner Music Group that will enable fans to buy tickets and receive additional downloads or videos, while Warner receives a share of revenues. Viagogo said that approach was preferable to a government ruling.
"(There's no need for a) tax on fans reselling tickets," Viagogo Chief Executive Eric Baker told Reuters.
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