I am surprised that SISTIC should be charged, found guilty and fined nearly $1 million for breaching the Competition Act. Here are my reasons:
a) SISTIC competed fairly to win the contract from the venue owners to handle the ticketing of their shows.
b) It is more sensible for the venue owner to get one ticketing company, rather than several companies, to handle the sale of the tickets.
c) The ticket charge (presumably $2) is a small charge for the work of issuing a ticket
d) ticket charge can be considered as part of the total cost of the show. If the customer does not like the total price, the customer is not required to watch the show.
The ticket charge is small, as compared to the charge of $30 imposed by the banks to transfer US$100. If SISTIC should be fined for this charged for this fee, why are the banks allowed to impose a charge that is 15 times of this sum? The work is similar in both cases.
I am not sure if I got my facts and issues correctly, so I look forward to getting the views of other people on this matter.
Tan Kin Lian
The crux of the problem is that SISTIC insists on exclusive distribution thus locking out other competition. When this happens, the free market is unable to operate without government intervention.
ReplyDeleteIt make sense for SISTIC to quote on the basis of exclusive distribution. If the venue owner does not agree, they can give the contract to another ticketing company.
ReplyDeleteThis type of arrangement applies to many types of businesses. For example, a company may appoint a printer to handle all its printing jobs. It is a commercial arrangement.
SISTIC has a very high market share that reaps economies of scale and lock out other competitors.
ReplyDeleteIf the high market share is a result of fair competition,then it is okay.
but,i don't think so with its shareholders being SSC and Esplanade
Such things are quite beyond we ordinary people to understand, especially without sufficient & transparent info to compare.
ReplyDeleteIt make sense for SISTIC to quote on the basis of exclusive distribution. If the venue owner does not agree, they can give the contract to another ticketing company.
ReplyDeleteThis type of arrangement applies to many types of businesses. For example, a company may appoint a printer to handle all its printing jobs. It is a commercial arrangement.
The problem is that the venue owner does not have alternative ticketing vendor to select from because there is no competition. Thus, the venue owner has to use the services of the monopoly and as a result sign exclusive distribution locking out any future new entrance. By locking out future competition, the existing monopoly continues to be remain a monopoly, etc.
This is a typical monopoly scenario that occurs in many parts of the world. The only solution is for government intervention.
Mr Tan,
ReplyDeleteI'm not sure if Sistic competed fairly. I got this online:
"The Singapore Sports Council (SSC) currently holds a 65% share in SISTIC with the remaining held by The Esplanade Co Ltd."
Sistic is the sole ticketing agent for all of Esplanade's and Indoor Stadium's events. This reeks anti-competition!
I had a friend who worked for a production co. He said other ticketing agents charged them less fees, and the audience, mainly students and young adults, a lower booking fee. But because they performed at an arts festival that was held at the Esplanade, they were not given a choice.
I watch more than 30 shows a year (theatre, concerts, art films), and have had my fair share of dealings with Sistic. Here's why I cheered when I read that Sistic was fined. Though my comments aren't specific to anti-competition, I think Sistic is allowed to bully customers and get away with inefficiencies due to its monopoly.
1) $1 booking fee was implemented in 2000. Over the years it increased, and there was a 50% booking fee hike for tickets priced over $20 in 2008, from $2 to $3. The reason was investment to upgrade internet portal and ticketing engine 'to support a faster, reliable and secure 24/7 real-time ticketing service'. But most customers know the website is still unreliable. More often than not, even though the homepage comes up, we'd have problems accessing the events' pages because they load very slowly. After we made our selection, we'd get a timed out error. It is very frustrating.
2) $3 is 3% for a $100 ticket, but 15% for a $20 ticket. For the smaller productions, this is a significant cost for patrons. I noticed most events, even smaller ones at the Theatre Studio and Recital Studio, are now priced at min $28. Given that credit card discounts are usually at the most 25%, customers still pay $3 fee instead of $1.
3) Booking fee is charged per ticket, not per transaction. If I buy 8 tickets in one transaction, I'd pay $24, even though the effort of issuing the ticket is similar. In many other countries, a booking fee is charged for additional services like postage. Here, postage cost extra, on top of the $3 booking fee.
4) Non-transparency of seatings allocation. Sistic spent a million dollars to upgrade its system, but the system doesn't allow customers to select seats. Instead the system assigns "best available seat", based on the price category or preferred section.
ReplyDeleteOnce I bought a single ticket, and subsequently 2 tickets, in the same price category for the same event. The single ticket seat was four rows behind the pair's, even though I bought it one day earlier. When I asked the lady at authorised agent, she said the system checked for single seats, and filled in the gap, as single seats were harder to sell. Therefore "best available seat" meant best for Sistic's business, not in the best interest of the customer.
3 years ago, I bought concert tickets from Taiwan and the system allowed me to pick exactly where I want to sit. Our cinemas (GV, Cathay, Eng Wah) also made this service available on their websites since many years ago. Sistic doesn't care because it has no competition.
5) Lost/ stolen tickets for reserved seating replaceable at a fee of $5 per ticket. I think this is way too much, but perhaps I should not be petty if I'm careless.
6) Upgrade of ticket can only be done at Singapore Indoor Stadium. I once bought a ticket for my mum at senior citizen price, but she couldn't make it for the event at the last minute and I asked a friend. I had to go to Singapore Indoor Stadium to change it to full priced. That was a few years ago, before the Circle Line was up, and since I don't drive, I had to take a bus (one of only 3 that went there).
Sistic's monopoly meant consumers have no choice but to accept the fees increases and inefficiencies. I still remember there was TicketCharge many years ago but it has since been forced out of competition. I'm hoping to see more competition, to make Sistic to improve its ways.
I've always had a negative impression of SISTIC but never could know why.
ReplyDeleteI don't have any negative experience dealing with them, but I dislike them based on their ticket charge. Seriously, $2 to print a ticket? Cinemas don't charge that. Polyclinics don't charge that for that queuing ticket.
Basically, SISTIC with their monopolistic power can outbid anyone and then raise the ticket charge after that, and consumers don't have much choices after that. Oh and when they are big enough, the exhibitors will have to go through them to get their tickets sold, so as to reach a bigger audience, and SISTIC can negotiate a better deal, now on both sides.
Just because a ticket charge of $2 is small doesn't mean it's justified.
Please listen to this podcast by Planet Money called "The Economics Of Ticketmaster" which features many similarities with SISTIC.
What about the agent banks charging CPF members for investing? It is cartel, right?
ReplyDeleteI have always disliked the lack of choice in buying tickets for theatre performances.
ReplyDeleteOther cities like London or New York,
one could buy tickets for popular shows from different outlets with different prices.
SISTIC runs a monopoly and beacuse of its unique position,they charge as they like. I cannot compare and I cannot determine market price.
Regardless of being fined, there should be more players in the ticketing business.. maybe Eng Wah or Golden Village can provide the compettition.. after all, the software is similar and possibly easy to adapt.
What happens to the money from the fine?
Choice of Ticketing is the rights of venue users, not the venue operators. Venue operators can offer ticketing service but not exclusive choice.
ReplyDeleteIs not a two party affair.
The fact that SISTIC is quasi-government linked, may have given rise to the monopolistics situation. Agreed that exclusive agreements are not rare or wrong, but it is strange that after all these years, some Authority finally woke up.
ReplyDeleteActually, this awakening is becoming more rampant. Good and sad.
Why most company charge an admin. or subscription fee? Like restuarant, they also charge 10% service charge. Isn't we have alreadly paid the ticket or food amount which they have alredly marked up from the cost. The profit are already there. These unnecessary charges should deleted off. The person at the counter issuing the ticket or people serve us food have their salary. Unless these amount goes to their pool or the company kept it. Imaging 10% of one month turnover = ?
ReplyDeleteIf the ticket price has already included the commission, i.e. consumers pay the same face value of the ticket, I won't see there is a problem. Why should I bother to know if there is a ticket agent since it does not add value, yet I have to pay extra.
ReplyDeleteI won't mind buying ticket direct through internet, bypassing any middleman. It's a small charge but it does not mean I should pay. I don't see it is justified.
Loh
REX comments as follows,
ReplyDeleteRex comments as follows,
There is no point complaining that sistic is monopoly, it is meaningless to provide individual examples of why so and so felt their prices are high and they are inefficient. It is chasing after wind.
Instead the focus should be on HOW WAS IT ALLOWED to be a monopoly? Is it their fault that they are 65% owned by Singapore Sports council as pointed out by the other reader? Is vested interest involved?
Let me cite an example. Singtel was monopoly before and charged outrageous fees. Were they fined? Was it their fault that they are a monopoly? Of course not. The system didnt open up till the 90's when legislation broke up the monopoly and competition benefitted consumers.
I absolutely don't understand how Sistic can be fined when it wasn't proven that their monopolistic position was strictly their own doing.
I also don't understand why SISTIC company made no public statement on their position.
There is a total lack of transparency. A matter involving $1,000,000 is surely of some significance and should be followed up by the media and detailed analyses in editorials should also have been allowed. This would happen in any advanced country on earth, it is the role of media.
Why is there so much hush hush over many things in Singapore. It is not a conducive environment to generate creative thinking skills. For the lack of facts, as one commentor said, it is hard to continue debate based on speculation.
We are all programmed to accept without thinking, how can Singapore ever be a first world country.
rex
I feel that the biggest culprits of Anti-Competition and Cartels are the petroleum companies. Unfortunately CASE and the Authorities seem to be condoning and supporting their (Petroleum companies)anti-competitive activities, and we the consumers are at their mercy. On the one hand our government has been advocating "free competition" and "open market", but on the other hand has been protecting these petroleum companies by restricting motorist from going across the causeway by imposing the "3/4 tank rule".
ReplyDeleteRex comments as follows,
ReplyDeleteI agree with 9,59 am that in fact the authorities are not adverse to monopolistic practices. It is their prerogative. But then why are they turning around and giving a horrendous fine? It seems to set a wrong standard.
Another case in point, when the authorities slipped up and allowed Mas Selamat to escape, the citizens are warned, don't be complacent. What kind of rubbish is this? We are all punching bags. Unless new facts are released, my take on the Sistic issue is that they have been made a punching bag.
rex
Dear all
ReplyDeleteAs usual, the critical thinking REX has hit the nail on the head.
The origins and driving force of "the competition law" in Singapore started with the "Free Trade Agreement" (FTA) Singapore signed with USA.
Under the FTA, Singapore law had to be modified to be in sync with American competition law.
If it were not for the FTA, the Singapore CONNEDsumer would still be without the protection of the "Competition Law." And it would still be business as usual for SISTIC.
The Singapore peasant owes much to USA even though most of us are not aware of it.
If you are interested in another example of how this game is played, google "Global Compact". This famous United Nations initiative has been downplayed, diluted and blunted by something called "the Singapore Compact".
News reporting in Singapore is like a bikini.
+ What is revealed is interesting
+ What is hidden is fascinating
The fact that Sistic can achieve monopoly status in Singapore most probably means that it is government linked.
ReplyDeleteFrom the ownership structure, it seems that the $1 million is passed from left hand to the right hand.
Between, from the pattern of news recently, if I am not wrong, the General Election will be sometime later this year.
Those who patronize the Arts may like to gather at Hong Lim Park to protest against Sistic.
ReplyDeleteAnd
do time it with those car owners who may want to protest against their Motor Insurers and the Petrol Companies.
It will be better to add those who feel that all the monopolistic and cartel operations are possible or allowed BECAUSE THE SYSTEM ALLOWS THEM OR FAILED TO FUNCTION, TO ENSURE FAIR AND AND EQUITABLE BUSINESS PRACTICES.
Let's have a big gathering and make HLP a lively place. It has been under utilized except when the Pink People used it.
patriot
I wish that the garment will move on to the oil companies which are somewhat "oligopoly" rather then monopoly
ReplyDeleteNothing we can do about this.
ReplyDeleteTalk & more talk.. yet no answers, not even explanation.
..speaking words of wisdom, let it be,let it be..
I have given my son to NS and feed him to the mosquitoes in Brunei and Thailand. He has sworn to fight for Singapore and perhaps die too.
What is a million bucks then?
For those who are in authority or influence to drive the course of the country's destiny.. economic or otherwise..
Blood has been shed for far lesser
ideals.. remember that.
There will come a time when we will be embarassed to present our red passports.
In the end, the $1m come from the customers who had no choice, as usual!
ReplyDeletePay and enjoy the show, its a great piece of Art.
ReplyDeleteWhat is the point of "fine"??
ReplyDeleteThe important thing is to reduce costs for the customers!! E.g. Cheaper tickets for the cudtomers or refunds for the past tickets sold.
The authority who got the fine from sistic benefits most.
ReplyDeleteI wish to summarise my view:
ReplyDelete- the ticket charge should be considered as part of the ticket price. If the public finds it to be too expensive, they do not need to watch the show.
- a show is optional. It should not be considered as essential.
- there are many other forms of entertainment, e.g. television, DVD, etc.
Entertainment is different from petrol, electricity and banking services, which are essential for day to day living. So, the competition law should focus on these other areas.
Sorry. I am not so rich like some people who can watch concerts or musicals all the time. I had never had a chance to deal with Sistic before.
ReplyDeleteHi Mr tan,
ReplyDeleteyou know foodcourt chain kopitiam operate a hawker centre in sengkang. there is a carpark on the roof of the hawker centre. in order to pay for parking fees people have to use kopitiam own card to pay.
is this consider against competition?