Ticketmaster rolls out dynamic ticket pricing system
The Hollywood Reporter, 4/18/11
Ticketmaster will partner with data analysis company MarketShare to roll out new ticket pricing technology this summer. Under the "dynamic pricing" system, tickets to major shows and sporting events will be priced according to consumer interest. If an event is in high demand, initial prices for desirable seats will increase, while harder-to-sell tickets will see price cuts. The new approach is designed to ensure that scalpers don't inflate prices by snatching up the best seats and reselling them for a profit, according to Ticketmaster Chief Executive Nathan Hubbard. "Efficient pricing is one of the most important and untapped opportunities," Hubbard said in a statement. "By utilizing MarketShare and Ticketmaster's technology, our 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." The company plans to test the dynamic pricing system with North American sporting events and concerts this summer before expanding to include arts and theater.
Commentary: Dynamic pricing a great weapon against secondary market
Glenn Peoples, Billboard Magazine, 4/19/11
Dynamic pricing is coming to the concert business. Prices will be able to better reflect supply and demand. They will rise when demand is high and fall when demand is low. Ticketing is not just about relationships -- although they still matter. More and more, ticketing is about services, how those services fit the clients' business needs and whether those services make money for the client. Outbox CEO Fred Rosen [said] Ticketmaster is "not a pure ticketing company anymore, which clearly makes them highly vulnerable to competition [and] no longer invincible." But Ticketmaster does differentiate itself on services. And if Ticketmaster's dynamic pricing toolkit proves to be a competitive advantage, the second tier of ticketing companies could have a tougher time going after its clients. Money can be captured in addition to clients. A great dynamic pricing tool could be a great equalizer for the primary ticketing company, the promoter and the artist. Value currently lost to the secondary market can be better captured on the sale of the primary ticket. When a $50 ticket is quickly resold on the secondary market for $150, that incremental $100 is captured only by the reseller and the secondary market service.
In the UK, consumers are warned about buying tickets on secondary market
The Guardian, 4/13/11
Music fans looking to book tickets for one of the European summer festivals are being warned to take care in the secondary ticket market. The resale of tickets for sold out events is big business, and with the annual festival season almost underway there are fears that hundreds of UK consumers could, as in 2010, hand over their money but end up with no ticket. The UK European Consumer Centre said it received 288 complaints from UK consumers during 2010 - an increase of more than a third [from] 2009. The main areas of complaint [included:] tickets failing to be delivered; cancellation of an event after the consumer has purchased a ticket [and] secondary ticket sellers may have a huge mark-up, so a consumer may only get back a fraction of what he or she paid; consumers turning up at a venue only to find their ticket is declined for being void; and valid tickets are provided, but the consumer being refused admittance to some areas. The UK ECC's leaflet, Can you rely on your festival tickets?, outlines how consumers could be caught out, offers advice for purchasers, and addresses the question of legal protection.
Case study: The benefits of dynamic ticket pricing at L.A.'s Center Theatre Group
Steven Roth, The Pricing Institute website, 4/14/11
Center Theatre Group in Los Angeles has three houses, from a 2,100-seat theatre to a 317-seat space. [Its] Mark Taper Forum seats 732 and is known primarily for plays. In 2010, the company adopted dynamic pricing as standard practice. These two examples show how Center Theatre Group has integrated revenue management with their marketing and development strategies.
1. Optimizing re-scaling and re-zoning: For the Taper, CTG moved from a two-price house to a three-price house. CTG divided the house into 28 seating zones within these three prices. Each zone was assigned business rules governing which zones could be discounted or used for complimentary seats. Marketing teamed up with Development over the management of subscriber upgrades to the most desired sections, so that an upgrade to certain sections would now require the subscriber to also become a higher-level donor, and to continue at that level for subsequent seasons. When prime seat locations were not renewed or used to accommodate an upgrade, these seats became full-price, never discounted or comped and were held until Development found a suitable donor. The combination of rescaling, managing flexible zones, and requiring a donation for upgrades to the best sections yielded significant results, including a 9% increase in average prices across the board, an 83% subscription renewal rate, and a 28% increase in subscription revenue, equaling $2.5 million.
2. Pricing for a new audience: The Lieutenant of Inishmore played the Taper in summer 2010. Through surveys of preview attendees, staff determined this controversial play would generate significant word-of-mouth through the hundreds of comments, both pro and con, coming from a younger audience, and that this could significantly increase demand. CTG published a broad cross-section of the comments on its website and through Facebook and Twitter. Based on the social media buzz CTG put a plan in place to increase ticket prices if the show got strong reviews, which it did. Prices were increased across-the-board between $10 and $20, putting top prices at $70, and discounts that were scheduled to expire the day after opening were not renewed. CTG also realized that although the audience was certainly voicing its opinions about the show on-line, they were not buying tickets until the last minute. CTG held onto their pricing strategy and almost every performance sold out; bringing in $93,000 over the show's income goal.
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TicketForce's Facebook ticketing system is now available to non-customers, too
Press release, 4/18/11
TicketForce.com announced that its proprietary Facebook Ticketing service is now available for any venue or group with a need to sell tickets. Previously, the custom social media ticketing solution was only available for current TicketForce clients. Facebook Ticketing, a social media ticket sales tool that TicketForce launched in January 2011, allows event venues, independent musicians, promoters, festivals, sporting events and event marketing professionals to sell tickets securely through their brand's Facebook Fan Page. Customers purchasing tickets never have to leave the Facebook environment. Importantly, Facebook Ticketing is completely customized to the brand that is using it, not to TicketForce. Users can build up a brand's Fan Page by offering special deals and incentives to fans, such as the ability to access pre-sale specials to big concerts, shows and festivals. Features include much more than a simple ticket purchase - customers can also choose seats, apply discount codes and purchase multiple levels of tickets (VIP, general admissions, etc.) through the application. TicketForce offers the service for a small set-up fee and a per ticket fee, based on volume of tickets sold. "We opened Facebook Ticketing to include non-TicketForce customers because of the huge opportunity that exists for all of these groups to sell more tickets even if they are already locked in to using one of our competitors for the venue or show," said Lynne King Smith, CEO of TicketForce.