In today’s CMU Daily: FanFair Alliance has identified thousands of tickets listed by supposedly ‘trusted sellers’ on resale platform Viagogo for seats that are still available on primary sites, meaning touts don’t own the tickets they are selling - a practice banned by Viagogo, and which possibly breaks the law in the UK

Also today: The super premium opportunity maybe isn’t as exciting as some people would have you believe, and no one can really agree what it would even be anyway. That was a key takeaway from yesterday’s Spotify earnings call, as Daniel Ek doubles down on AI and innovation as the future of streaming

Plus: German collecting society GEMA has sued OpenAI for copyright infringement, saying generative AI poses “fundamental legal questions that we absolutely must clarify” through litigation. It’s the first music industry lawsuit against an AI company within Europe rather than the US

FanFair Alliance says “industrial level” touting fraud rife on Viagogo with touts selling thousands of tickets they don’t own

A small number of industrial level touts are together speculatively listing thousands of tickets for sale on secondary ticketing platform Viagogo, tickets connected to specific seats that are still available on Ticketmaster at less than half the price. 

A new study undertaken by campaign group the FanFair Alliance last weekend found that one reseller, listed as Diana Rebchenko in Ukraine, is currently selling 1762 tickets on Viagogo, most of them for seats that can still be booked on primary sites at a much lower price. 

FanFair was able to track the speculative selling because, under UK consumer rights law, a seller is obliged to list the seat number a ticket is attached to, which means tickets being touted can be compared to the tickets still on sale on the primary sites. 

That said, this tracking wasn’t possible in all cases, because some of the tickets listed broke this rule and didn’t list seat numbers. That included another seller officially based in Ukraine, Khomin Yarco, who is currently listing significant volumes of seated tickets to UK arena shows.

“Given the current political scrutiny of online ticket touting, this snapshot of speculative ticketing on Viagogo is alarming”, FanFair’s Adam Webb tells CMU. “Effectively, a small handful of overseas traders are using the website to profiteer and resell huge volumes of tickets that are readily available at face value on Ticketmaster and other primary ticketing platforms. And this is likely only the tip of the iceberg”. 

While most aspects of for-profit ticket touting have been heavily criticised over the years, speculative selling - where a tout advertises a ticket they don’t have yet - is particularly controversial. 

The reseller may be able to secure the specific ticket they have sold from the primary seller after they have found a buyer on Viagogo, but that can't be assured. And even if they do get the tickets they've ordered, the buyer could have bought the same tickets at the same time from the primary platform at a much cheaper price, if only they knew where to look...

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Spotify’s Ek puts a damper on ‘super premium’ hype, bigs up AI and innovation as the future

Spotify’s share price hit an all time high today after the company revealed its latest earnings, delivering a third quarter of profit for the streaming giant, which reported an operating profit of €454 million for the third quarter of the year. The company is now projecting a full-year operating profit of €1.4 billion for 2024, according to the earnings release.

That has dramatically increased CEO Daniel Ek’s wealth - his stake of approximately 30 million shares (including recent warrants exercised in July) is now worth a fairly incredible $14.24 billion at today’s price, up from a mere $5.17 billion just a year ago when shares were trading at $171 a pop. 

So, great news for Spotify, and even better news for Ek. Which might be why he felt able to drop a quiet bombshell during the call with analysts yesterday, as he dampened down hype around Spotify’s much-vaunted and hotly anticipated “supremium” offering. Lucian is NOT going to be happy. 

Now, it’s never nice to feel that you’re letting the mighty Sir Lucian Grainge down, and invoking the disapproval of Papa Grainge would be enough to set a lesser man trembling in his boots. 

Not Ek. When your company is worth more than twice what it was at the start of the year - and now sits at twice the market cap of Grainge’s Universal Music - it probably gives you that little extra mettle you need to let down Lucian - albeit fairly gently. 

The blow came in response to a fairly innocent sounding question from Richard Greenfield, a hugely influential media and technology analyst at independent research firm LightShed Partners, who has a bit of a track record for asking pointed questions that get to the heart of things.

“While some of the labels have talked about this” - Spotify’s super premium offering, that is - “there doesn’t appear to be a consensus of what the record labels or artists want the product to be”, said Greenfield. “What does Spotify want the offering to be and how involved will the artist need to be to make this work?”

Ek’s lack of enthusiasm to talk about super premium yet again was stark...

GEMA sues OpenAI

GEMA has become the first collecting society to sue an AI company for allegedly infringing copyright through the training of a generative AI model. The German song rights society is suing OpenAI over allegations it used lyrics written by GEMA members without getting permission. 

Many AI companies continue to deny they need to get permission to make use of copyright protected works in their training datasets. This means there are “fundamental legal questions that we absolutely must clarify” relating to copyright and AI, says GEMA’s General Counsel Kai Welp. 

This lawsuit, the society hopes, will provide legal clarity and allow the development of an AI licensing model. “GEMA wants to establish a licence model”, it insists, that would allow AI companies to make use of its members’ works legitimately, and for songwriters and publishers to be remunerated.  

That will be easier to achieve, it adds, once this lawsuit has refuted the “contention that training with and subsequent use of the generated content is free of charge and possible without the rightsholders’ authorisation” that many AI platforms currently base their businesses on.

The ultimate aim of the litigation, the society says, is to “guarantee fair participation for authors in the use of their copyright-protected works by generative AI”, while also hopefully initiating “a public discussion on copyright and AI”.