The live music business is hurting. With no events going on right now as a result of social distancing rules to combat the spread of Coronavirus, nobody can put on events in clubs, bars, concert halls or at festivals. Just about every event has been cancelled this spring and summer and one expert predicts we may not see big events until next fall. One major sticking point now is refunds for postponed events, meaning the promoter intends on throwing their event at some point in the future.
The internet got quite mad yesterday after Ticketmaster quietly changed (clarified is the PR term) their policy on refunds for postponed events. Though this was done last month, the old policy said, as noted last week by the NY Times, that people can get refunds “if your event is postponed, rescheduled or canceled.” Now it only lists cancellation as the reason for a refund, though the Live Nation UK website still has postponement as reason for a refund. “Tickets cannot be exchanged or refunded unless the performance is cancelled, rescheduled or where there is a material change to the Event.”
The regular Live Nation website is more ambiguous, saying, “If the event was moved, postponed, or rescheduled, the Event Provider may set refund limitations. If you are unable to make the new event date and refunds have been approved by the Event Provider, you will see a ‘Refund’ button within your order in your Live Nation account.”
But what is Ticketmaster (owned by Live Nation) doing with refunds and how does it relate to what other promoters and companies are doing?
Ticketmaster is saying that the decision to refund tickets for postponed events is up to the promoter. If the promoter offers refunds for the postponed events, then you will get one, but otherwise they aren’t issuing refunds, even if customers need that cash now to stay afloat in a pandemic. Their solution is to allow ticket buyers to then sell the tickets on the Ticketmaster secondary market platform.
“In the past, with a routine volume of event interruptions, we and our event organizers have been able to consistently offer more flexibility with refunds for postponed and rescheduled events,” Ticketmaster said in a statement to the NY Times. “However, considering the currently unprecedented volume of affected events, we are focused on supporting organizers as they work to determine venue availability, new dates and refund policies, while rescheduling thousands of events in what continues to be an evolving situation.”
This protects Live Nation’s bottom line and share price, which has dropped almost 50% this year. They have made a commitment to cut $500 million in costs this year, including executive compensation.
Ticketmaster isn't alone in shifting refund policies to try and protect themselves and their sellers. Stubhub changed their policy at the end of March to no longer give refunds in the most egregious policy change of them all.
They slowly got to this point. In the past, the Stubhub had a money back guarantee where buyers get a full money back refund if an event was canceled.
On March 25, they still offered refunds for cancelled events. “If the event is canceled and not rescheduled, you will get a refund or credit to use on a future purchase, as determined in StubHub’s sold discretion (unless a refund is required by law).”
Now Stubhub is only offering a 120% coupon that can be redeemed between now and December 31, 2021 instead of money back. Stubhub is being sued in a federal class action lawsuit over this change and the lack of refunds for postponed events.
Seatgeek offers a better policy related to COVID-19. They will refund your ticket is the event is cancelled, however for a postponement, they say “your tickets will most likely be valid for the new date, although this will depend on the venue’s policy.” This means you don’t get your money back automatically.
We have seen promoters this year forced to cancel or postpone their events and not issue refunds right away. Ultra Music Festival was the first large festival in the spotlight as it was postponed in March. They have not offered direct refunds, but instead offer fans the chance to choose between Ultra 2021 and Ultra 2022, though they had only 30 days to decide on which. Fans would also get one free ticket to any non-Miami Ultra Worldwide or Resistance events in 2021 or 2022 and a discount code for 50% off official merchandise order of $250 or more.
Their terms and conditions is not kind on refunds, noting, “if Event Organizer elects to issue a refund, which is in Event Organizer’s sole and absolute discretion, the Purchaser shall be refunded an amount up to the face value of the Ticket(s) only. If Event Organizer elects to reschedule the Event for a future date, Purchaser shall not be entitled to a refund.”
Ultra isn’t the only large festival promoter looking to recoup their losses from a cancelled event. Ultra was in a pretty unique position where the event was cancelled two weeks before it was set to take place, meaning that their money was tied up in the festival, which was almost prepared.
SXSW was thrust into a similar position. They had to cancel the event a few days before it was set to take place and fans will not get refunds. “SXSW does not issue refunds under any circumstances. Any and all payments made to SXSW are not refundable for any reason, including, without limitation, failure to use Credentials due to illness, acts of God, travel-related problems, acts of terrorism, loss of employment and/or duplicate purchases. SXSW will not issue refunds for Credentials that have been revoked.” A third of their staff was laid off as a result of the cancellation.
Lightning in A Bottle is also facing this decision to not issue refunds but will "attempt to make customers whole." The May festival was cancelled last month. Their T&C makes it clear that customers get nothing back.
“All sales are final. No refunds will be granted for any reason. Event date and time subject to change. All rights reserved. If the event for which this ticket is issued is rescheduled or cancelled, the holder shall not be entitled to a refund except as otherwise required by law.” A lawsuit is pending.
How will this impact the long-term health of the live music business? There are a few takeaways on this. In the short term, promoters are fighting for survival, so they may need the ticket money now since insurers aren’t paying out on plans that don’t explicitly cover pandemics. This may lead to some bargain acquisitions by Live Nation & AEG who can survive this. Some small independent promoters will go under if they don't get a lot of government assistance. Live music won't look good for quite some time after this. It will likely also damage the trust between ticket companies, promoters and customers, often a fraught relationship to begin with.
Why would a customer buy tickets for an event six months out if they don’t believe they could get a refund if the event is changed? Why would customers travel to shows if they don’t believe they will get refunds for their tickets. For big international festivals, they have to weigh the pros and cons of surviving in the short term and the long-term damage to their reputation with fans. Fans should actually read the terms and conditions of various events and may decide not to buy tickets if a festival offers no refunds at all. With the investment of hundreds of dollars, it would be smart to consider the refund policy, especially if you don’t get anything in return. Buying tickets now becomes a risky proposition.
Some of this will likely be settled in court. There is an argument to be made that these last minute changes act in bad faith and will give customers, lawyers and state attorneys the ability to join class action suits against vendors. However, these companies often have airtight legal terms and conditions and given the circumstances, some courts may be hesitant to rule against a business struggling in a pandemic.
These various companies are looking out for themselves, which they have every right to, but at the same time are failing to consider their customers who are also hurting financially. That could be a big problem when events roll out again. If you see events, promoters and vendors saying customers are their number one priority, remember this time. The customer comes second.
UPDATE: Lightning In A Bottle has changed their tune after a lot of backlash and will offer refunds. In a lengthy email to subscribers, they apologize for their first communication and want to make things right. They are now offering refunds for those want it, but are asking people if they can to let DoLab keep the money. They will also let people roll over their ticket to 2021 or 2022 if they want.