Investigation: Festivals, cancellations, ticketing, refunds
NME
This summer's high-profile festival cancellations exposed just how vulnerable ticket buyers can be. Here's how to avoid the pitfalls
The heavens opened on the night of August 10, 2011 in North Yorkshire, lashing the Dales with rainwater, causing streams to become rivers and rivers to burst their banks. For a promoter from Leeds called Ash Kollakowski, it spelled disaster. All year he’d be planning Beacons, a new, boutique-style independent festival near Skipton – a kind of Field Day or outdoor All Tomorrow’s Parties for the north. With one day before it was due to start, his site was a foot underwater. A health and safety officer employed by the festival had no choice: at 11am on August 11, the event was called off.
“There was a lot to deal with,” Kollakowski says. “First of all, you’ve got to put the message out there. We did that and obviously people were upset, but there was a lot of sympathy because there was a flood – an act of God. Then we said we’d try and get everyone refunded within the next couple of weeks. We’d partially used ticketing agencies, so people who bought tickets with them were refunded automatically. But we also used a company on PayPal. We’d had some of that money in already and we’d spent it. And we lost that money because we refunded people ourselves. One of our main shareholders had to remortgage his house and sell one of his businesses, but every single person got a refund and I’m glad we did that. The reason why we managed to pull ourselves back and put on the festival the next year was because we had so much good faith from people, and artists, many of whom waived their fee and even played in Leeds that weekend for free.”
Beacons took place for the third time in August this year and continues to go from strength to strength. There is, though, much to learn from the story of its disastrous debut: about how soggy – literally and metaphorically – the ground upon which small, independent festivals are built can suddenly become in the face of “an act of God”; about how risky it is for promoters to try and make money from live music; and, also, from a punters’ point of view, about how careful you need to be when buying tickets for music events. Kollakowski honoured his debts, but he could have chosen to liquidate his company (legally absconding him and his partners from financial responsibility), and the recent cancellations of two festivals in particular – ATP’s Jabberwocky, which was due to take place in London in mid-August, and Alt-Fest, scheduled for the same weekend in Kettering – have suggested the process for receiving refunds for tickets can be highly confusing. Both events have shone light on the grey areas of ticketing industry, a fiercely competitive business that the average music fan may not know much about.
HOW TICKETING WORKS
ATP made their name staging revolutionary festivals in holiday camps and started the fad for bands playing their classic albums in full. But in 2012 they hit a wall financially, and liquidated the company before – perfectly legitimately – starting a new one called Willwal LTD that traded under the ATP name. The report on the liquidation showed total debts of £2.6m with their two biggest creditors being ticketing agencies Gigantic (owed £876,716) and See Tickets (owed £749,355). If at first that doesn’t make sense, it’s because it’s not widely known that ticketing agents don’t just process tickets for event organisers, taking part of the booking fee as commission, but sometimes – not always – loan money to promoters ahead of an event taking place to help with upfront costs. Then, if the event goes ahead, they release the remaining funds from ticket sales. It’s normal practice.
Ticketing agencies advance funds at their risk. They’re keen to build relationships with promoters to ensure they keep using their services, and, as Martin Fitzgerald, chief commercial officer of See Tickets, says, “Withhold all funds from sales of tickets ahead of the event happening and half the events scheduled wouldn’t take place.”
Use a reputable company to buy tickets and whatever arrangement they have with a promoter will have no bearing on your ability to get a full refund if the event is cancelled. “Our terms dictate – and I’m assuming this is the same for all major ticketing outlets – that we hold all customer funds in a separate account from our operating account and the sole purpose of that is to guarantee the return of those funds to the customer if an event is cancelled or we go bankrupt,” says Steven Endersby, senior marketing executive of WeGotTickets, who are based in Oxford. “I think we’ve got about 9,000 events on sale. If every single one was cancelled tonight, we’d be able to refund every single ticket.”
There’s a legal point here, too. As consumer advice site Which? says, “The ticket seller is responsible for giving you your refund for tickets to a cancelled event,” and that, in its simplest sense, is a matter of law. So why then, if you bought a ticket for Jabberwocky using a relatively new and small New Zealand company called Dash, or a ticket for Alt-Fest using Clubtickets – and their company names appeared on your bank statement or Paypal account – have those two companies not been offering refunds? It’s here that things become murkier.
ATP told customers who had bought tickets with Dash to contact them for a refund, only to find out that Dash claimed they had “given to ATP all funds that Dash received for ticket sales to Jabberwocky” and wouldn’t be giving money back to fans. The conundrum was neatly summed up by Twitter user @shitmixtape: “So ATP blame Dash, who blame ATP, who tell me to ring my bank, who tell me to ring PayPal, who tell me to ring my bank.”
In theory, because Dash had sold the tickets – regardless of whether they’ve advanced funds or not, and ATP say they did receive some money – they are liable to provide refunds. But, at the time of press, it remains unclear what kind of company Dash is. Repeated calls and emails by NME to their headquarters in New Zealand were unreturned. Then there’s Ticketscript, another company that processed tickets for Jabberwocky, who describe themselves as a “European market leader in free self-ticketing software for event organisers”, rather than a traditional ticketing agency. They too claim that ATP is responsible for paying refunds. “Ticketscript only acts as an intermediary and the agreement to purchase the tickets arises between the customer and the event organiser,” says Jason Legg, Ticketscript’s UK commercial director.
The situation differs in the case of Alt-Fest, a first-year festival partially funded through Kickstarter, which was due to feature Gary Numan and Marilyn Manson as headliners. The husband-and-wife founders liquidated the company and, to make matters worse, a primary ticket-selling agent called Clubtickets also liquidated soon after the festival was pulled, effectively making anyone who bought Alt-Fest tickets using their service into creditors. When a company goes into liquidation, the order of payment after assets are sold is as follows: the fees of the liquidator (ie the company closing the business) are paid first, then debts owed to banks, the Inland Revenue and employees. Invariably, that means ordinary creditors rarely see their money returned and Fitzgerald says See Tickets never received a penny of the £749,355 they were owed by ATP, despite the fact that they were the second-biggest creditor.
PRACTISE SAFE TICKET BUYING
If all the above sounds alarming, know that there are simple things you can do to ensure you will receive a full refund for a cancelled festival. And, as many people who bought tickets for Jabberwocky and Alt-Fest have found out, even if the company that sold your tickets gets liquidated or, in the case of Dash, absolves themselves of responsibility, options still exist to apply for refunds. PayPal offer what’s called a “chargeback” on tickets bought within the last 180 days (not the last 45 days, as has been reported), while certain banks and credit card companies also offer chargeback terms, though they vary between companies. Check yours before buying tickets to festivals. (And in general, buying tickets on a credit card offers a level of protection that debit cards don’t have.)
Here are some other steps you can take:
1. Only buy tickets from a dependable ticket-selling agency. Online, you’ll find the site of the Society of Ticket Agents & Retailers (STAR), which is a self-regulatory (rather than government) body, but they nonetheless have a strict code of practice for their 45 members. If a festival isn’t using any of those 45 agencies (many festivals employ more than one), exercise extreme caution. Ask the festival why they aren’t before you buy a ticket and always check any ticketing agencies’ specific terms and conditions on refunds. If their terms and conditions aren’t clear, avoid their service.
2. Find out what level of insurance a festival has bought. Festivals might not appreciate you asking about what insurance they’ve purchased (they only need public liability coverage to obtain a licence to stage an event), but you’re on much safer ground if you can establish whether they have cancellation and abandonment insurance. It’s expensive (about £500 for the tiniest one-day festival and up to about £70,000 for big events, and that’s on top of other policy costs), but it’s good news for ticket buyers. As Steven Howell from Music Insurance Brokers says, “Ticket sellers have begun to force the issue. They now sometimes say to festival organisers, ‘We’re going to hold back funds we’re collecting from sales until the event has passed unless you have a cancellation policy in place and your name is on that policy.’” Put another way, having cancellation and abandonment insurance will help a festival get properly organised before it takes place, seriously reducing the chances of a cancellation, and help attract trustworthy ticket-selling agencies, who will be paying your refund if the event is pulled.
3. Think laterally. There’s nothing to suggest that a festival in its first year can’t be a success or that a promoter with an erratic track record isn’t capable of putting on an incredible event. Imagine, though, how much easier it is for festivals with impeccable histories to attract bands, sponsors, quality venues and business partners. Read between the lines and trust your gut. Each year, many festivals are cancelled and, in some cases, the signs will have been in plain sight. Is the festival you’re thinking of buying tickets to a member of the Association of Independent Festivals? Make checks like that.
IS MORE REGULATION NEEDED?
Invariably, after a summer of cancellations, come calls for more transparency and regulation – from fans online, and also within the live music industry. WeGotTickets are particularly vocal about the issue, often to the chagrin of their competitors. “It’s commonplace for agencies to secure ticketing for an event by agreeing to pay back a certain percentage of the booking fee to the promoter – a kickback, as we call it, or a rebate as the industry prefers,” says Endersby. “That’s the kind of thing that we’re going to start pushing against more, as well as stuff that’s come up like this ATP refund chaos. We think that transparency and protecting consumer rights are crucial to an industry that doesn’t have a great reputation anyway, partly because of secondary ticketing. There’s a risk of a loss of faith in the live music industry, especially with regarding festivals, and if we keep seeing things like Jabberwocky happen are people really going to want to risk buying tickets in the future?”
See’s Fitzgerald believes, however, that there’s already enough regulation in place. Consumer rights are protected by law, he mentions, and rivalries between ticketing agencies help tip the market in favour of the ticket buyer. “It’s hugely competitive; if there’s someone out there charging huge booking fees, and people perceived they're being ripped off, there’s always somewhere else to book,” he says.
On the other side of the coin – from the promoter’s point of view – Beacons’ Ash Kollakowski says: “If there was more regulation, I don’t think that 22-year-old potential promoters could go out and do something for themselves. If you’re putting on a festival, you know what the consequences could be and if you bring in Trading Standards you’re compromising what is actually an artistic thing to do. Good promoters are curating an event for a specific audience and they need to be trusted to know that audience. Trading Standards would come in and say, ‘This act won’t sell enough tickets – they’re from Sweden and they’ve only got one record out!’ and that would take away all the originality, passion and variety in a good line-up. The person who has the best idea of how a festival is going to do it the person who’s putting it together, not a man in a suit or an algorithm.”
In the wake of Jabberwocky, Alt-Fest and the many other festival cancellations this year, you may disagree. In August, ATP’s Barry Hogan said, “A promoter losing money is like saying a butcher serves pork.” About being a ticketing agent, Fitzgerald says, “You’re basically playing festival stock market.” Expect much more drama come summer 2015.
