Seatwave

Infobox_Company
company_name = seatwave
company_type = Private
company_slogan = "The fan-to-fan ticket exchange"
foundation = London, UK (2006)
location = London, UK
key_people = Joe Cohen, Founder & CEO
industry = e-commerce
products = online secondary ticketing, online ticket exchange
homepage = [http://www.seatwave.com www.seatwave.com] |

Seatwave is an online fan-to-fan ticket exchange operating in the European market. [ [http://www.tornado-insider.com/news/Article.asp?id=14315 Seatwave seals €17.3 million Series C round, Tornado Insider, 11 February 2008] ] Its aim is to offer consumers a more transparent and safer way to buy and sell tickets to live events including music, theatre and sport. [ [http://www.brandrepublic.com/MediaWeek/News/672047/Seatwave-chooses-OMD-Kinetic-1m-media-account/ Seatwave chooses OMD and Kinetic for £1m media account, Isabella Piasecka, MediaWeek, 18 July 2007] ]

Seatwave allows anyone to buy or sell tickets on the exchange. Tickets can be sold at any price selected by the seller, including below and above the face value printed on the ticket. Seatwave charges buyers a 10% commission and sellers a 15% selling fee which, it claims, enables them “to deliver a safe and transparent marketplace”, to provide a dedicated customer service team, to include their consumer protection guarantees and “to make a little profit along the way.”

The company offers two consumer protection guarantees. TicketIntegrity™ guarantees that all tickets come from legitimate sources only. [ [http://www.killerstartups.com/eCommerce/seatwave-com-online-ticket-reseller-marketplace Online Ticket Reseller Marketplace, Killer Startups] ] Their TicketCover™ insurance, a joint venture with Mondial Insurance, refunds the full cost of tickets purchased on the site (including postage and packing) if an event is cancelled or if the ticket holder is unable to make it to the venue for a variety of reasons including motor breakdown, injury or jury service. [ [http://www.insurancedaily.co.uk/2007/07/25/seatwave-and-mondial-provide-ticket-insurance/ Seatwave and Mondial provide ticket insurance, Gill Montia, Insurance Daily, 25 July 2007] ]

Founder and Investors

Seatwave was founded by Joe Cohen, formerly of Match.com and Ticketmaster, in May 2006 and began online trading in February 2007. [ [http://www.e-consultancy.com/news-blog/363500/ticket-reseller-seatwave-attracts-8m-in-funding.html Ticket reseller Seatwave attracts $8m in funding, E-Consultancy] ] The company secured $25 million in February 2008 in a Series C funding round led by Fidelity Ventures and including existing investors Atlas Venture, Mangrove Capital Partners and AdInvest. [ [http://www.reuters.com/article/pressRelease/idUS100249+11-Feb-2008+BW20080211 Seatwave Secures $25 Million in Series C Funding, Reuters, 11 February 2008] ]

Board appointments

Seatwave recently announced the appointment of Marty Pompadur, chairman of News Corp Europe, as a non-executive director. He is also expected to invest a small stake in the business. [ [http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/14/cnseat114.xml Murdoch aide joins Seatwave, Dominic White, The Telegraph, 18 July 2008] ]

Official partnerships

Seatwave recently announced their appointment as the official ticket exchange for Portsmouth Football Club and Fulham Football Club. This will mean that season ticket holders of both clubs will be able to sell tickets to any matches they are unable to attend and registered club members can purchase tickets to otherwise sold-out matches. [ [http://www.nma.co.uk/Articles/39378/Football+clubs+in+ticket+deal+with+Seatwave.html Football clubs in ticket deal with Seatwave, Will Cooper, NMA, 27 August 2008] ] To prevent hooliganism, the resale of football tickets in the UK was made illegal within the Criminal Justice and Public Order Act 1994. [ [http://www.opsi.gov.uk/acts/acts1994/ukpga_19940033_en_18#pt12-pb13-l1g166 Criminal Justice and Public Order Act 1994] ] Resale of football tickets is only legal when expressly permitted by the individual club. By establishing these partnerships, all the benefits of a free secondary ticketing market are made available to members without contravening any anti-hooligan measures.

Seatwave also runs the official ticket exchange for London Irish and Sale Sharks rugby clubs.

Seatwave has partnered with Grand Union Management who manage artists including The Enemy and Reverend and the Makers. The deal will mean that Grand Union artists can earn fairly from the secondary market whilst providing a better experience and greater access for fans of the bands. [ [http://www.ticketnews.com/node/3310 Landmark Seatwave deal promises better access to tickets, Ticket News, 18 July 2008] ]

In July of this year, Seatwave announced a sponsorship of The River Rat Pack Tour, a group of up-and-coming indie bands, including SixNationState and Jay Jay Pistolet, travelling and performing on barges from London to Oxford. All backstage content from the tour was hosted on Seatwave’s editorial site. [ [http://www.bbc.co.uk/berkshire/content/articles/2008/05/27/river_rat_pack_tour_feature.shtml The River Rat Pack Tour, BBC] ]

Emergence of the European Secondary Ticket Market

The secondary ticket market is estimated to be worth around £1 billion in the UK and up to £5 billion across Europe. [ [http://www.ticketnews.com/Secondary-Ticket-Market-in-UK018100 Secondary Ticket Market in UK Gets a Boost, Ticket News, 10 January 2008] ] [ [http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/02/11/cnfidelity11.xml Fidelity to invest in secondary-ticket market, Dominic White, The Telegraph, 11 February 2008] ] The secondary ticketing market is more mature in the United States with many states repealing their anti-resale legislation, but the European market is catching up quickly.

The debate

In 2007, the UK’s Department of Culture, Media and Sports appointed a Select Committee to investigate the secondary ticketing market and outline recommendations on legislating the industry. On 10 January 2008, the Select Committee published a report which summarised their findings. [ [http://www.parliament.uk/parliamentary_committees/culture__media_and_sport/cm2071218.cfm Committee report on ticket touting, 18 December 2007] ] They identified a number of key benefits for consumers including: [ [http://www.publications.parliament.uk/pa/cm200708/cmselect/cmcumeds/202/20202.htm Culture, Media and Sport - Second Report, House of Commons] ]

* A secondary market enables consumers to buy tickets at a late stage, albeit at a premium, when the primary agent has ceased selling.
* Competition (in the secondary market) can lead to lower prices for consumers.
* The services provided in the secondary market may be more convenient, operating online, 24 hours a day, when primary sources may provide only a more limited service and their systems may not cope well at times of high demand.
* The secondary market enables ticket holders to dispose of unwanted tickets so that they are not left out of pocket when, as is often the case, promoters and primary agents offer no refund or resale facilities.
* Some consumers enjoy the process of tracking down tickets which are difficult to find.
* The existence of a legitimate secondary market allows reputable operators to provide safe and secure services with consumer protection, and make it unnecessary for consumers to use shady sources.
* The existence of the secondary market sustains the demand for advance purchase which could fall away if consumers knew that they must either occupy seats or leave them empty.
* The secondary market helps to increase the concession and merchandising revenues which promoters and artists can generate at events, by filling seats which would otherwise be left empty.
* The secondary market helps to increase ticket revenues for promoters and artists when it buys (and makes losses on) tickets for events where supply exceeds demand.
* The secondary market invests in advertising which can be beneficial to the artists or events for which tickets are advertised.
* The public benefits from the extra taxation revenue from the profits generated in the secondary market.
* If there were no legitimate secondary operators, reselling would be driven underground and operated by criminals.

Seatwave bore testimony at the inquiry where Joe Cohen presented his view on the secondary market. Other attendees included Mr Paul Vaughan, Commercial Director of the Rugby Football Union and Mr Harvey Goldsmith CBE.

In April 2008, the government responded to the Select Committee’s reports supporting the findings that legislation should be a last resort, identifying a need for the primary ticketing market to be improved and urging all players in the industry to work together to develop a voluntary code of principles. [ [http://www.official-documents.gov.uk/document/cm73/7346/7346.pdf Government Response to the Culture, Media and Sport Select Committee Report on Ticket Touting (HC 202 – Second Report of Session 2007-08)] ]

Academic thoughts on secondary ticketing

Many academics have undertaken research into the secondary ticketing market to determine the effects of legislation on the industry.

Connolly and Krueger of Princeton University argue that the secondary market exists because of demand uncertainty and that, in many cases, if the tickets weren’t under priced to begin with, the secondary market would not exist. [ [http://www.irs.princeton.edu/pubs/pdfs/499.pdf Rockonomics: The Economics of popular music, Marie Connolly, Princeton University and Alan B. Krueger, Princeton University and NBER] ] Elfenbein, of Washington University, suggests that regulations offer scalpers (touts) the opportunity to charge a high mark-up on tickets. [ [http://papers.ssrn.com/sol3/papers.cfm?abstract_id=595682 Do Anti-Ticket Scalping Laws Make a Difference Online? Evidence from Internet Sales of NFL Tickets, Daniel W. Elfenbein, Washington University, St. Louis - John M. Olin School of Business, 30 June 2006] ]

Live Performance Australia, the trade body for Australia’s live entertainment industry, investigated the effectiveness of regulation on the secondary ticket market and found, based on other countries experiences, criminalization is largely ineffective in preventing scalping for live performance events. [ [http://www.liveperformance.com.au/site/_content/document/00000039-source.pdf Ticket Scalping Discussion Paper December 2006, Live Performance Australia] ]

Dr Eamonn Butler of the Adam Smith Institute, a free market think-tank, wrote a piece suggesting that the government should steer clear of the secondary ticketing industry, recommending that the free market is the best mechanic to ensure that tickets end up in the hands of those who most want them. [ [http://www.adamsmith.org/blog/media-and-culture/the-secondary-ticket-market-200803061010/ The secondary ticket market, Dr Eamonn Butler, 6 March 2008] ]

See also

References