Last week, the Chancellor released a budget designed, he said, for "reforming the nation's economy, so that we have enduring growth and jobs in the future." He lamented, "Britain has lost ground in the world's economy and needs to catch up.
In the last decade, other nations have reduced their business tax rates, removed barriers to enterprise." While these words are positive, at Seatwave, we've learned first-hand that building a disruptive business in Britain can be tough. Taxes and red tape are an issue but the greatest obstacle to innovation is the constant threat of legislation.
In 2006, we launched Seatwave to give fans access to the events they wanted to go to, on their own terms. We knew we were disrupting the legacy model of event organisers and performers manipulating prices, and the monopolistic control of ticket agents. What we did not bank on was the additional sway of event organisers, musicians and sports governing bodies. Now, almost six years on and six inquiries later, we face the threat of regulatory action once more. Each inquiry so far has ultimately found in favour of our business model.
A brief history of Westminster's deep-dive into ticket reselling
• The Price Indications (Ticket Resale) Regulations of 1994 - Ticket resellers are required to include face value prices at the time of sale to consumers. This makes ticket reselling the only industry in the UK forced to show its profit margin to customers.
• In January 2005, the OFT issues a broad report on the sale of tickets to live events in the UK. In it, the OFT finds that "secondary agents can provide a useful function for consumers who need tickets for events and are willing and able to pay premium prices."
• During 2005-6, the Department for Culture, Media and Sport (DCMS) holds four "Ticket Touting" summits at the behest of event promoters and governing bodies. The aim is to determine how best to "clamp down on ticket touting and provide ticket selling arrangements for the best interest of fans and the wider public." As part of the DCMS summits, a survey of consumers and fans who attend events is undertaken. This finds that "this is not an issue that requires legislation" and "people who go to sporting and music events do not want the resale of tickets to be banned."
• In May 2007, the Select Committee on Culture Media and sport convenes a consultation to determine, among other things, the underlying cause of ticket touting.
• In January 2008, the Committee publishes its report, stating:
"Any attempt to ban the secondary market outright would also be a very serious step in that it would criminalise what has been a perfectly lawful activity, which is evidently valued and freely made use of by many consumers, in order to support the industries' endeavours to target particular audiences. We do not consider that it would be either practicable or right to do so." The government responded in April of that year, concurring with the committee's findings and report.
• In February of 2009, the government once again convened a DMCS consultation to look into the possibility of banning resale for "crown jewel" events of national importance. In testimony, every organiser, from the Ashes to local pub quizzes, claims its event is of national importance. In February 2010, the government issued its report viewing regulation as a "last resort". The Government refused to implement the "crown jewel" proposal, as it was "confusing and unworkable."
So Parliament, the OFT and government have all supported the reselling of tickets as being proper, legitimate and very much in the interests of fans. Nevertheless, some MPs, co-opted by event organisers, are still seeking a legislative path to monopolise the resale of tickets as they do the primary sale of tickets.
If the Chancellor and the government want to make Britain a place of new business models, they need to make sure that disruptive creators can get on with building them. Moves to implement tax breaks and cut down on bureaucracy are immensely important for creating the kind of efficient atmosphere in which innovative businesses thrive. Yet, if parliament insists on making us defend ourselves repeatedly on the same, decided issues, innovation will be slow and growth negligible.
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