Where is Dynamic Ticket Pricing?
In the July 2009 issue of Rolling Stone, Steve Knopper points out that average concert ticket prices have more than doubled in ten years from $32 to $67. While the increase in ticket prices is not always pleasing to concert goers, the more pressing issue is that of ticket mis-pricing. Simply stated, concert tickets traditionally have a face value that is based on a guess, and a poor one at that. This means that some tickets are priced too low and some too high. Mis-pricing tickets is a disservice to fans in that under pricing good tickets increases opportunities for scalping while over-pricing lower quality seats can cut out budget conscious buyers. Given the technology and data analysis that is possible, why is it that more dynamic ticket pricing has not come to fruition?
Irving Azoff, CEO of Ticketmaster has proposed that concert ticket prices should be more dynamically priced, but he side steps responsibility by suggesting that artists and promoters need to take the initative. Indeed, ticket prices are established by artists and promoters and Ticketmaster has historically not had a lot to do with the actual pricing of a ticket, but that is only because after selling billions of dollars in tickets, the company can’t seem to use all the data it has collected to offer dynamic pricing services to artists and promoters. Who else is best suited to provide dynamic pricing than the company selling the tickets? I can only speculate that Mr. Azoff prefers a broken system that allows them to assess hefty fees on individual ticket sales.
Dynamic ticket pricing is needed now and it could benefit the market in two ways. First, it would reduce the number of tickets resold on the secondary market because dynamic pricing would reduce profit potential at resale. Second, dynamic pricing could increase ticket sales volume for events where interest was low. It seems plausible that some concerts are under attended because lower quality ticket prices (with fee’s) are not enticing enough. This is probably why Live Nation is putting so much effort into selling lawn seats for $25 with no ticketing fees – that kind of price entices people to buy.
Note: Rafi Mohammed gives a little more information on dynamic pricing and issues surrounding the concept in this article.