I’ve ranted in past blog posts about the inconvenience of Ticketmaster’s paperless tickets and have even called them the highway to ticket hell (a nod to AC/DC’s paperless tickets use). I’m in a ranting mood again today, particularly when I was thinking about how they’d frustrate a Christmas gift to my parents for a play or show (my parents love attending concerts & theater).

Ticketmaster may call it innovation, but I call it frustration. You can resell your townhouse, Toyota, or textbooks online. But there’s one product, that thanks to new technology, can’t be bought and resold–“paperless tickets“.

That almost anything can be bought and resold is a benefit to consumers, particularly in tough economic times. But with paperless tickets, instead of getting a paper ticket (or an email that you print up at home) you have to present 1) the credit card used to purchase the tickets, and 2) a government-issued photo identification for admittance. Paperless tickets have been used throughout the recent Miley Cyrus tour this year. She performed at the Verizon Center last month in Washington, DC and a local news story reported on the hardship it created for many fans:

A photo ID is also required, meaning Talia Levin couldn’t just take her mom’s credit card to the concert. Her mom had to swipe her through. “If you are older, then you can go by yourself, so it’s hard to have to go with your parents,” stated Talia Levin. “I refuse to buy into any artist who does this ever again,” said Talia’s mom, Melanie Levin. “I won’t do it.”

So what if I wanted to go online to buy concert tickets for my parents as a Christmas Gift? Would I have to go down to the arena to get them in–down in Atlanta??  What’s up with that? It’s an online transaction so I should be able to go online and determine who’s got permission to pick up these tickets.

But even if Ticketmaster figures out the logistical headaches, there’s still a serious problem:  consumers can’t resell their tickets! An editorial in the LA Times does a good job of describing who really benefits from paperless tickets–two points if you guessed “Ticketmaster.” They control the primary market, and now the company wants to control the secondary market too.

This control will turn into a death grip if Ticketmaster (the largest ticket distributor) merges with LiveNation, (the largest promoter) to create one giant company. I worry about customer convenience and resale rights in a post-merger “Ticketmaster Nation”.

Recent developments have the events ticket market going paperless (tickets) and creating a paper trail (via proposed legislation).

First, there’s Ticketmaster’s efforts to push “paperless tickets” into greater use. On Monday the Wall Street Journal reported on how the upcoming Miley Cyrus (aka Hannah Montana) tour will sell only paperless tickets.

I’ve previously blogged about paperless tickets here, here and here and continue to maintain that they are not about consumer convenience. Why? Well, at the venue you have to present the credit card used to purchase the tickets, which means everybody in your party has to arrive at the same time. And if you can’t go you won’t be able to resell your tickets or even give them away. Ticketmaster won’t give you a refund, that’s for sure!

With paperless tickets, Ticketmaster says it is trying to stop scalping, but why? As yesterday’s Los Angeles Times opinion piece cogently argues:

Secondary markets are important. They help overcome the inefficiencies in primary markets, while giving purchasers a safety net. If “paperless” tickets are the only option for consumers, there will be no secondary market unless Ticketmaster provides one. That’s quite a power grab for a company that’s awaiting the Justice Department’s approval for a blockbuster merger (with Live Nation, the country’s leading concert promoter).

The reality is that Ticketmaster knows that secondary markets are important, which is why it owns TicketExchange. It’s common practice nowadays for artists to bypass the box office. According to a Wall Street Journal article from a few months ago:

Virtually every major concert tour today involves some official tickets that are priced and sold as if they were offered for resale by fans or brokers, but that are set aside by the artists and promoters, according to a number of people involved in the sales.

Understanding how all this works and how many tickets are actually available is difficult. But it’s important, given the rhetoric we often hear from legislators and “consumer advocates” that would restrict and cap prices on ticket reselling. Which is why a bill introduced last week by Congressman Pascrell (HR 2669 — “Better Oversight of Secondary Sales and Accountability in Concert Ticket Act of 2009”) may actually be helpful even if it micromanages distribution and disclosure rules.

Among other things, this bill requires primary ticket sellers to reveal the number of total tickets offered for sale and the percentage going to the general public. This would give the market more information, which would allow consumers to better determine appropriate prices. However, the bill imposes some burdens on the secondary market, such as forcing secondary ticket sellers to register with the FTC and imposing a blackout period where resellers could not buy tickets until 48 hours after the initial ticket sale.

Perhaps what this all gets down to is the issue of consumer access. Access to information and access to tickets on both the primary and secondary markets. To the extent that paperless tickets restrict access, then this is a bad thing.

Usually we hear that the Internet has created overabundance — an overload of  information, communications, choices, all within easy grasp of a single mouse click. So it came as a bit of a surprise when I read yesterday’s New York Times article about event tickets, and how the Internet is making it harder — not easier — on fans:

Fans complain that the once simple process of getting tickets has been transformed into a complex and expensive digital chore.

The article goes on to mention Craigslist, eBay, and TicketsNow as places where fans can go to purchase tickets. The perception is that tickets go very quickly on first sale (usually through Ticketmaster) and that the only real alternative is through the secondary market, where tickets for high demand events can be expensive.

And it’s possible that the Internet has increased the ability to purchase — and abuse — the process of buying tickets when they first go on sale. But compared to the old way, the Internet is a much better buying experience and increases opportunities for fans. I remember having to wait in line at the local Waxie Maxie record store for my tickets. Sometimes the system was slow and wouldn’t respond well (or was it the pimply-faced teen that didn’t give a darn behind the counter?). The sale would end before I even got to the counter. Overall, it was a painful experience. And while it may have been singular (as in only one option), it was certainly not simple to drive somewhere, wait in line, and only use cash (I’m dating myself).

So why this Times article, at this time? Concerts are way more important today. Artists and producers are focusing more on concerts for revenue, as CD sales diminish and digital downloads fail to fully make up for the dwindling revenue. Concert tickets used to be somewhat of a loss leader to get you in the door to buy merchandise and other concessions. Today, the ticket is the ticket for an artist’s and producer’s paycheck.

Yet, the way that tickets are initially sold is complex and not transparent at all. Not all tickets are sold to the public of course. Many go to the performer, some go to corporate sponsors, others are held for the local hospitality industry (hotels, package deals, etc.).

When people get upset about high prices on Criagslist, or any other site where you can get second-hand tickets, they are really upset over the supply/demand imbalance that was created in the primary market — how tickets were distributed, the limited seating capacity of the venue, and how tickets were initially priced (the face value).

Blame the parties involved in the initial sale of tickets, even blame the economics of it all (though you can’t get away from supply and demand) — but don’t blame the Internet!!

Ticketmaster last week completed its acquisition of Front Line Management, a talent agency — expanding Ticketmaster’s empire into a vertically integrated unit renamed “Ticketmaster Entertainment.” Combine the acquisition with AC/DC announcing it is the latest band to use Ticketmaster’s “paperless ticket” technology on its live tour, and I’m left wondering — are we on the highway to ticket hell?

As I’ve written in a previous posting, Ticketmaster has introduced what it calls a “Paperless Ticket” and Veritix has a paperless ticketing technology called Flash Seats. The concept is the same – no more paper tickets.

And while I’m unabashedly pro-technology on many fronts, here’s where I’m skeptical. The use of electronic tickets, when combined with the recent vertical integration moves of both Ticketmaster and Live Nation, could provide less control for consumers to do what they want with tickets.

The trend in the industry is to integrate the 4 major aspects of a live show: 1) primary ticket sales; 2) management and promotion; 3) direct artist to fan (clubs and paraphernalia); and 4) secondary ticket sales. Technology can be used to help tie the ticket to all aspects of the business, and even provide more control to music artists, but the downside could be a lack of consumer control once the ticket is purchased.

Under Ticketmaster’s paperless tickets policy, you have to present a credit card and a government-issued photo identification for admittance. What if you want to sell the ticket? Or your baby sitter cancels in the last minute and you want to give your tickets to a friend? Can’t do it. At least not under the current policy.

AC/DC’s latest tour is named after its new album, Black Ice. Let’s hope that electronic tickets aren’t the cause of consumers skidding out of control of their own tickets.