Commentary: Comedian Louis CK launches a 'pay a fair price' ticket strategy
Leigh Beadon, Business Models blog on Techdirt.com, 6/26/12
We've written a lot about Louis CK since the huge success of his direct-to-fan sales strategy for the video from his last tour, and he continues to be one of the best examples of how being open, human and awesome is an important part of success these days. Now, while other comedians are following in those footsteps, he's continuing to innovate: yesterday he announced that tickets for his new tour will be sold direct to fans, exclusively through his website, just like the videos. There are all sorts of benefits for fans, and all sorts of detriments for scalpers (his two core motivations):
"Making my shows affordable has always been my goal but two things have always worked against that. High ticket charges and ticket re-sellers marking up the prices. Some ticketing services charge more than 40% over the ticket price and, ironically, the lower I've made my ticket prices, the more scalpers have bought them up, so the more fans have paid for a lot of my tickets. By selling the tickets exclusively on my site, I've cut the ticket charges way down and absorbed them into the ticket price...My goal here is that people coming to see my shows are able to pay a fair price and that they be paying just for a ticket. Not also paying an [exorbitant] fee for the [privilege] of buying a ticket."
From the sound of it, CK had to do a lot of work to make all the necessary arrangements and sell the tickets the way he wants to sell them. He mentions that it was hard to find venues that would agree to let him sell the tickets exclusively, so he's ended up booking some unusual locations and smaller venues where he'll do multiple shows. He also admits that he's making less money this way than he would on a conventional tour, but that's not really surprising considering how cheap the tickets are. He says he just likes doing shows, is "making enough money doing comedy" already, and really wants to bring the price down -- plus he probably also knows that, in the long run, having control over all his own sales is likely to pay off.
Commentary: Cinemas' unfair prices are driving fans to movie piracy
My wife and I decided [to] see a movie. For two tickets at [a nearby] Cineplex, the grand total was $21, which seemed pretty reasonable. Next, we proceeded to the concession stands [for] a large popcorn, 2 regular sized drinks and a small bag of candy. However, even with [a discount] card, the snacks cost us another $21! Based on some quick research...[these items] cost the movie theatre approximately $5. That represents a mark-up of over 400%! With pricing like this, it is little wonder why piracy has become such a large issue in today's society. In the current economy, families are looking for affordable entertainment, and I do not believe that our local movie theatres are doing a very good job of providing that. Instead, families are more likely to download a newly released movie, pop up some popcorn on the stove and crack open some beverages found in the fridge. In the past 5 years alone I have witnessed the costs at the concession stands rise nearly 40%! So, is this just a matter of corporate and shareholder greed? Obviously they are trying to protect their very large profit margins and investor returns. Here is an idea for Cineplex that would result in continued growth of profits and thus, investor delight. Why don't you drop your prices 40%, encouraging more families and individuals to visit your theatres and grow your business through expanded ticket and concession sales? I think you will find people are more willing to pay a fair price for the entertainment you are providing, than stay at home and watch their free downloads because they cannot afford to pay your unfair and outlandishly exorbitant fees.
Commentary: Olympics organizers learn 'fair' ticket pricing doesn't work
Rick Lester, TRG Arts blog, 7/9/12
The logistics surrounding the buying and selling of tickets for live Olympic events are daunting. We are talking about eight million tickets [in] a two-week window of time. It's a huge challenge to gauge demand and then arrive at a price model that makes sense for an event of this magnitude. When speaking about pricing, I commonly begin by rhetorically asking, "What is this chair worth?" As old ticket marketer, my answer is simple. It's only worth what I can get for it -- and my job is get as much as I can! This answer makes some folks uncomfortable. It's not uncommon for someone to ask me about the role of "fairness" in pricing. Don't nonprofit publically-supported entities have an obligation to be fair to patrons? The organizers of the 2012 Olympic Games believed the answer was an unambiguous "yes" and built their pricing strategies around a concept described in an interesting blog post. For the London organizers, the goal was to make the Olympiad "Everybody's Games". They wanted ticket buyers to become "partners", participating in ticket allocation lotteries and with venues that were scaled only after the orders were received. The London model is built on "shared-value pricing", a "nascent and evolving strategy" based on the belief that "customers will have dwindling patience for antagonistic pricing." It didn't work. Ticket prices to sold-out events at the Olympics have climbed as high as 20 times face value on the secondary market. Predictably, re-sellers did what all scalpers, aka the secondary ticket market, do best. They step in to fill the gap when values don't match price. A couple of years ago, Warren Buffet opined, "Price is what you pay. Value is what you get." The value proposition of most patrons is to get the best seat at the best price. And if the venue "gets it wrong," customers do one of two things. If the asking price is low, consumers will exploit the "deal." If the price is too high, consumers invariably pass on the event. When price and value are balanced, everybody wins. The patron gets a great seat at a price that they believe is fair. And, in TRG's experience, the happiest patrons are most frequently those who pay the highest price for seats they really wanted, not those who got the cheapest ticket price.
Commentary: Every ticket you buy tells the artists/promoter it was a fair price
Benjy Eisen, Spinner.com, 7/5/12
When the book Ticket Masters: The Rise of the Concert Industry and How the Public Got Scalped first dropped last year, it dropped more than one bomb on music fans: While Ticketmaster itself may not exactly be a fan-friendly company, they're not the only reason concert tickets are so pricey these days. Despite their frustrating fees and annoying add-ons, none of these companies really have much to do with the actual face value of the ticket, at least not initially. And then there's the highway robbery that's now an accepted part of every concert experience, be it the parking, concessions or merchandising. But the blame can't simply be shifted to the venues or promoters either. As authors Dean Budnick and Josh Baron clearly illustrate, the economics of the concert business are part of a system where cause and effect have resulted in some incredibly expensive nights out. Even for those willing to pay face value, the best seats are often impossible to get. There's a reason for that, too, and the truth isn't always pretty.
In researching this book, what was the biggest surprise that you uncovered?
Josh Baron: While there were a number of surprises throughout the process, the biggest surprise -- discovery might be a better word -- was how significant a role artists play in the whole process: They're the biggest factor in determining ticket price, they're frequently the ones delivering tickets to the secondary market and for all the fan-friendly poses they strike, they're often greedy. That said, the industry as a whole continues -- as it always has -- to protect and insulate artists from such scrutiny since they're the drivers of the whole business.
Where do you see -- or hope, or fear -- the live concert industry going?
Baron: Overall, I think we're starting to see some price correction happening. Amphitheater tickets are being priced more appropriately, [and] artists are opting to play smaller venues to insure a packed house more frequently. [Also,] StubHub has gained such ubiquity that they're now thought of as a "normal" part of the equation unlike only a few years ago.
Do you think we'll reach a tipping point where the wave breaks and the prices and back-door scalping and endless add-ons start to roll back some?
Baron: I do. I always tell fed-up fans that the best thing they can do is vote with their feet and wallets. And by that I mean this: Every time you buy a ticket -- even if you do so kicking and screaming about how expensive it is -- you're telling the artist and promoter that it was a fair price. If enough tickets don't sell, you can believe that next time the artist comes through, either the price or venue will have changed to better your experience.