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Ticketmaster Introduces Dynamic Pricing to Boost Ticket Sales: How It Works for You and Against You

I don’t normally pay too much attention to the business of ticket sales and distribution, as I’m sure most people don’t. As long as I’m able to procure my seat for the Chicago showing of Green Day’s American Idiot – The Broadway Musical, I’ll be a happy camper. Just kidding—I’ll wait for the movie.

In any case, a recent L.A. Times article regarding live-event ticket sales sparked my curiosity. Ticketmaster is going to be rolling out a new pricing system this year—a “dynamic pricing system”—which will allow them to alter the prices for event-tickets based on market demand. So, for example, when an upcoming concert for [whichever trendy band the kids are listening to these days] isn’t selling particularly well, ticket prices will drop, potentially boosting sales. Conversely, if tickets are selling out like crazy, prices will go up—though how significant the price jump will be is anyone’s guess (and will likely vary by artist).

Concerts just don't rock like they used to.

The new system is intended to combat last year’s downturn in ticket revenue. Concert turnout was rather unhealthy in 2010, with overall ticket sales down by roughly $150 million from the prior year. In the article, Ticketmaster’s Chief Executive elaborates on the benefits of the new pricing model, noting that “clients will be able to retain economic value that is normally siphoned off by the secondary market, and to sell more of their tickets that go unsold today. Meanwhile, more fans will have more opportunities to enjoy live entertainment events because tickets will be more accessible and pricing options will broaden.”

It’s an admittedly bold move on the company’s part, but a risky one as well. It would constitute an entire shift in the pricing model for live-event tickets. Given that Ticketmaster is essentially the Facebook of their industry, it’s hard to imagine why they’d be so gung-ho about an overhaul, and so willing to risk making things worse. It’s quite a gamble, and whether Ticketmaster’s customer base will be as keen on the idea as they are is up for debate.

NIN tickets aren't cheap, ya know.

According to band manager Jim Guerinot, who handles a number of reputable artists (No Doubt and Nine Inch Nails among them), “you’re going to see a lot more concerts priced correctly [this year].”

Concerts are finally going to be priced correctly? Sounds great, in theory. There’s just one problem: when the demand for tickets to a Nine Inch Nails concert skyrockets (which it will), so will the cost—under the new system, that is. This will leave certain poor folk (namely myself) unable to afford the experience. And I can’t even afford it now!

Sure, there’s bound to be an upper limit on prices, but what would that limit be? And will it prevent the marginalization of fans on the lower end of the income spectrum? I suppose we’ll just have to wait and find out.



Joseph Giorgi

Joseph is the head of the Media Team at Quality Logo Products. He's a video specialist, blogger, perfectionist, and all-around likeable guy. When he's not busy focusing on the nitty-gritty details of his written and visual work, he's normally listening to bad 80s music and scouring the internet for useless information on useless subjects. You can also connect with Joe on Google+.

Comments

  1. Scooby DOO!

    Relative pricing is an interesting model and its one of the reasons why your house today isn’t worth what it was 5 years ago. It will be interesting to see if this cuts the inflation as it seeks to optimize price and demand. Must be nice to not have a formidable competitor in your industry!

    • Joseph Giorgi

      Exactly. Ticketmaster wouldn’t be so bold if their brand stood to get crushed by a more even-handed competitor.

  2. JPorretto

    It’s kind of like sports games. Every one asks how they can charge more each year for tickets. It’s because they can. People keep buying them. As a business I can not fault Ticketmaster for charging what they think they can get for the tickets. It’s not – nor should it be – a business’ goal to include everyone (unfortunately). But it sure does suck when tickets cost as much as mortgage payment.

    I wonder if some bands will have the opportunity to dictate some ticket prices. Many bands like to make sure that the crowd is full of some rowdy characters, and that’s very rarely the ones spending the big bucks.

    • Joseph Giorgi

      That’s a good question. I wonder how much input the artists will have when it comes to actual ticket prices and what the upper limit will be. I was under the impression that the artists and their managers deal with the venues and that the venues handle ticket sales and whatnot, but I have no idea if that’s really how it works, or if it’s even that simple. In any case, yeah, it’d be a shame if this new system ended up alienating certain fans—namely the poorer variety, like myself.

  3. Jana Quinn

    I’ve been thinking about this concept for a while, and I can’t decide if it’s going to be good for everyone or a disastrous horror show. I get pretty angry when I realize I’ve paid more than someone else for the same product/service. For example, my cable bill is going to skyrocket next month because my introductory period will be over; others will be getting my same cable package for less than I’ll pay, even though I’M the loyal customer. Airlines do this all the time, too.

    However, if the prices are very low early on with the risk of increasing if people wait, that might motivate people to get tickets the day they go on sale rather than waiting, forgetting, or losing interest. With that, though, there’s also the risk of scalpers scooping up tickets early and then selling them for just under whatever outrageous price the venue/artist ends up charging later in the selling period.

    Yeah, I’m going to go ahead and put my money on disaster.

    Also… Nine Inch Nails is still around?

    • Mandy K

      Didn’t the guy from NIN just win an Oscar?

      • Joseph Giorgi

        He sure did, which means it will probably be a while before he returns to NIN. But it will be a tour to remember when he does, that’s for sure.

        …And ticket prices will be exceptionally high—especially now. 🙁

    • Joseph Giorgi

      I’ve got the EXACT same situation going on with my ISP. My monthly rate is about to double from here on out, and I’m very upset. Oh well, necessary evil there.

      But yes, as far as ticket sales go, there will definitely be more of a motivation for consumers to get their “tix” early, which is a good thing for venues and artists. And yes, there will always be scalpers out there. This could very easily be a disaster, but we’ll have to see how public reacts. I’m just surprised that they’re enacting such a dramatic change because of one bad sales year. Who’s to say that the pricing was blame in 2010? And who’s to say that a new pricing scheme is the best answer? Seems a bit much—that’s all.

      …”Nine Inch Nails is still around?”

      Not at the moment; Trent seems to be perfectly happy composing film scores now.

  4. Tony Promo

    “Dynamic Pricing System” sounds like BS to me, and it is… What else would you expect from a monopoly?

    Most of the tickets I buy are nearly impossible to get in the first place. For example, I struck on out ::coughPhishcough:: mail order through their website for all five shows I was going to see this summer, and then was on Ticketmaster (phone and internet) the exact second they went on sale, and didn’t get those either. Unfortunately for people like myself, I cannot accept NOT going to those shows, so I’ll pay a premium whether I like it or not.

    So basically what this is saying is that had this program been in place two weeks ago, the already inflated Ticketmaster prices would have been even higher seeing as how my favorite band elected to play three nights at UIC this summer rather than their normal two to three night stands at Alpine Valley and Deer Creek (Verizon Wireless Ampitheatre). So that’s at minimum triple the amount of people vying for approximately 1/10th of the normally available tickets.

    One question… where does this extra money go when the prices go up due to demand? Does it go to Ticketmaster? I would imagine so, unless they’ve signed agreements with the artists to give them a bigger piece of the pie on a sliding scale. If you know anything about promoting concerts, even lesser-known touring bands have a guarantee and I have to believe that this isn’t their icing on the cake, but rather Ticketmaster taking advantage of not just the artists who clearly will think this is bad for their fans, but especially the fans themselves. Again, they get their cake and eat it too, let’s just hope they get too fat and go out Monty Python-style and eventually explode from over-eating.

    • Joseph Giorgi

      Well put, Tony Promo. This is exactly why the new pricing system could end up punishing consumers. For the life of me, I just don’t understand why they’re taking this risk.

      As far as where the extra money goes (i.e., to Ticketmaster, to the venue, or to the artist), I’m not exactly sure. It would be worth looking into. Of course, it’d be safe to assume that a good portion of it will be going back to Ticketmaster, being the monopoly that they are.

  5. Bret Bonnet

    I totally understand WHERE Ticketmaster is coming from… but I think this is a BAD idea… Instead of adding VALUE, encouraging more people to attend concerts – they are pricing people out from buying tickets? How does THAT improve ticket sales?

    Concert tickets are already SO HARD to come by as it is now, and while this scaled pricing model should increase the barrier to entry to popular shows, pricing the average music listener out of contention, I don’t see how this does the artist any good…

    Here is a novel idea, instead of pulling a Comcast as Jana pointed out above, why not get more MICRO with the ticket pricing? Instead of ENTIRE sections costing $X.XX per seat for ALL seats; price each seat/row individually.

    Row AA, Seats 1 & 2 – $500.00 each (after all, this is what these tickets probably fetch on the secondary market anyway).

    Row ZZ, Seats 99 & 100 – $5.00 each (nosebleed here I come!).

    … This way your attaching VALUE to each ticket, based upon it’s vicinity to the front of the stage, and not just arbitrarily charging more for the same seat today than you did yesterday. This shouldn’t overly difficult to achieve either since every arena/show has a finite # of tickets and the value of each seat is easily determined.

    That’s my TWO cents!

    • ASneed

      I agree with Bret! It makes sense to me to have different prices for different seats. Front row should cost more than the rest, and nosebleed seats should be quite a bit cheaper. I think this pricing system is very reasonable, and generally doesn’t price people out of going.

    • Joseph Giorgi

      Makes sense to me.

      Based on what I’ve read, there doesn’t seem to be any indication that Ticketmaster has plans in mind for that kind of comprehensive system, but they definitely should.

    • Jill Tooley

      Bret’s system would be cool with me, too! Granted, I don’t see it ever happening, but it would be a nice change from paying inflated prices for nosebleed seats…

  6. cyberneticSAM

    As an avid, sickeningly-addicted concert fanatic I am always hit hard when it comes to buying tickets through Ticketmaster. I am obviously ok with paying for a ticket, but don’t agree with all the BS crap they charge you for. I think that it is hightime there needs to be more comeptitors for Ticketmaster. I feel so violated buying tickets from Ticketmaster…. how can they get away with the OUTRAGEOUS fees? There is always ticket fee, a ticket handling fee, a convinience charge (what the hell is that?), a shipping fee and tax… I wouldn’t be surprised if there was a paper usage fee and interweb ordering fee! It’s a little ridiculous that there are as many fees as the ticket price itself.

    • Joseph Giorgi

      “It’s a little ridiculous that there are as many fees as the ticket price itself.”

      Haha. So true. And so unfair. 🙁 Yeah, I think we can all agree that Ticketmaster may be crossing the line with this move. I guess we’ll see how the public ends up feeling about it.

  7. ASneed

    As a family growing up, we saw a TON of concerts! That’s just my dad’s kind of thing. And we always based it on the band itself and the concert location mainly. Price wasn’t a huge issue. We always planned ahead and bought tickets early–since we always needed at least 7 for our family to attend.

    But since entering adult-hood (hahaaha) and having to pay for my own concert tickets, I attend way less shows. =( I’m just cheap in areas like that! I am generally content with jamming out to the band at home. There are a few bands I will still pay to see though….but I still won’t pay a ton for a ticket, and I won’t travel great distances. So for me, ticketmaster’s new plan may or may not affect our buying decisions. We would start skipping the show, probably at the $75 or higher price point.

    • Joseph Giorgi

      Same here, Amanda. I’m very finicky when it comes to the money I spend on events like that. I normally don’t go to concerts unless my girlfriend recommends that we go together. I’m more of a moviegoer than a concertgoer anyway, so this new system probably won’t affect me too much either.

  8. Vern-Matic

    I remember living in Grand Rapids, MI traveling to Kalamazoo, MI and Detroit, MI for shows. Ticket price, gas and food pale in comparison to the money that I would pay for just the ticket living in the city today. Like Cy-Sam mentioned after all the fees that you get hit w/you are now thinking “I guess my daughter doesn’t need braces, now”

  9. Tony Promo

    BTW…. if the concert you’re going to has actual seats, and not general admission on the floor, it *might* not be worth going to! 😉

  10. lizzie

    wow. that’s a LITTLE terrifying, but it’s about freaking time! i remember paying $30 to see George Clinton a few years ago and the show was almost empty…wasn’t the right venue…and i was pissed i had to pay $30 to see a show no one went to. i guess we’ll see how it goes!

    • Joseph Giorgi

      That’s too bad about the George Clinton show. I suppose instances like that are exactly why Ticketmaster is initiating the new system. But yes, it’ll be very interesting to see how the public reacts to it.

  11. Jill Tooley

    Ticketmaster has done the right thing by implementing something like this, but I kind of doubt that it’s going to take off the way they’d like it to. On one hand, they’re trying to offer options to their customers but on the other hand they’re marginalizing (as you mentioned). We’ll just have to wait and see…

    • Joseph Giorgi

      I just hope it doesn’t get to a point where my gf and I can’t afford tickets to a popular show.

  12. Brian

    $10 lawn seats at the tweeter center! cant beat that! why pay $30 to $70 for an actual seat closer to the stage where you can lay/stand on the grass and hear the bands just fine.. of course if you feel like sippin on a few brews thats going to cost you $8 a beer!!!!

    • Joseph Giorgi

      Very true. I’m all for lawn seats. And if you ask me, overpriced beer is a far worse crime than overpriced seats.

  13. steve

    I went on TM the day ELO Tickets went on sale. I bought crappy seats for $280. The very next day (on TM) the same seats were $129

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