seatwave

seatwave

Type	Private
Founded	London, UK (2006)
Headquarters	London, UK
Key people	Joe Cohen, Founder & CEO
Industry	e-commerce
Products	online secondary ticketing, online ticket exchange
Website	www.seatwave.com

Seatwave is an online fan-to-fan ticket exchange operating in the European market. It was founded in response to the lucrative 'secondary ticketing' market, whereby tickets to events are bought at face value by professional ticket brokers or enterprising individuals, and resold at a profit - a practise already prevelant with online trading sites, in particular ebay, as well as to the lack of refund or resale opportunities offered by primary ticket providers. However for the commission charged, it claims to offer consumers a more transparent and safer way to buy and sell tickets to live events including music, theatre and sport.

To ensure that tickets sold on the Seatwave site are legitimate and accurately represented, sellers are not paid for their ticket sales until after the event has occurred and buyers have gained entrance. Seatwave's statistics show that 84% of sellers sold 6 or fewer tickets in 2008.

Seatwave is also the official Ticket exchange for a number of major sporting clubs in the UK including two Premiership Football teams, and Grand Union who represent such acts as Reverend and the Makers.

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 15% service charge and sellers a 10% success fee (although it doesn't charge listing fee) which, it claims, enables them “to deliver a safe and transparent marketplace”, to provide a dedicated customer service team, and to include their consumer protection guarantees.

Seatwave, as a secondary ticket marketplace, has no way of verifying if tickets are valid, counterfeit, or genuine but cancelled tickets. However the company offers two consumer protection guarantees. TicketIntegrity guarantees that all tickets come from legitimate sources only. 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.

Whilst this insurance covers you for motor breakdown, jury service or injury, if the ticket seller fails to provide you with a ticket you are not covered for travel expenses, hotels or other costs incurred

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. 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.

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.

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. To prevent hooliganism, the resale of football tickets in the UK was made illegal within the 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.

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.

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. 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. They identified a number of key benefits for consumers including:

• 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.

Harvey Goldsmith spoke out against the secondary ticket market, as did many of those invited to give oral evidence before the committee

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.

A Sales Account Manager working for Seatwave is currently subject to a banning order at The O2 in London for using 6 credit cards and four different addresses to buy up hundreds of tickets subsequently sold through Seatwave and other websites. Joe Cohen was quizzed on this by BBC Radio 4, You and Yours reporter Shari Vahl in 2009 and stated that the tickets purchased by the agent were "backup tickets" >

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. Elfenbein, of Washington University, suggests that regulations offer scalpers (touts) the opportunity to charge a high mark-up on tickets.

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.

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.

See also

• Seatwave Republic of Ireland
• Seatwave Spain
• Seatwave Germany
• Seatwave Netherlands
• Seatwave Italy
• Seatwave France
• Seatwave Blogs
• Seatwave Blogs Spain