Ticketmaster moving to flexible ticket pricing

In the music business there is a old adage that says there is no such thing as a bad concert, just bad prices.

So it was with this in mind that Live Nation Entertainment Inc.'s Ticketmaster on Monday announced it would adjust ticket prices based on consumer demand. The world's largest purveyor of live event tickets said it has partnered with MarketShare to help price its shows.

Ticketmaster will begin rolling out the "dynamic pricing" sometime this year, initially for major sporting events and concerts, and for arts and theater at a later date.

That means a concert that's not selling well may get a price cut. If tickets start moving fast, the price could theoretically go back up. Scalpers often take advantage in situations when demand for tickets exceeds the supply, creating a surplus of buyers willing to pay more than face value. Discounters such as Goldstar work the opposite end, when there is a surplus of unsold tickets.

In many retail sectors, such flexible pricing techniques are common. Clothes, shoes, airline tickets and hotel rooms are among the many commodities that adjust prices according to market demand.

Concerts and many professional sports games, however, are rarely if ever discounted. That's because discounting can cast a pall over an event by creating the impression that the promoter is desperate.

Such concerns seem to be outweighed by the effect of last year's disastrous concert season, when promoters were left with too many unsold seats and faced large losses.

Live Nation Entertainment, the Beverly Hills parent of Ticketmaster, last year saw a 7.6% drop in the number of tickets it sold from the year before. Much of the decline came from theater and concert events. Ticket revenue fell 12.5% in 2010 to $1.04 billion, down from $1.19 billion in 2009.

"Efficient pricing is one of the most important and untapped opportunities," Ticketmaster Chief Executive Nathan 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."

Ticketmaster is not the first company to explore dynamic ticket pricing. ScoreBig, a Hollywood startup founded by former sports and concert industry veterans, has been testing a proprietary ticketing system that automatically adjusts prices according to how fast they're selling or how well similar shows have fared, among a host of factors. The service, which has been available to a small, invite-only audience, is set to launch to the general public later this year.

"This year, you're going to see a lot more concerts priced correctly," said Jim Guerinot, manager of No Doubt, Nine Inch Nails and other major bands. Translation: expect lower prices this year.

-- Alex Pham

Photo Credit: Paul Sakuma / Associated Press.

Comments

[leo]

does it mean that if all buyers collude and hold off buying - the price will go to 0?

[Leslie Howell]

Why is that Tickemaster has a leg of its company that scalps tickets for more than face and can get away with it? I have tried to get tickets to a show before that sold out within minutes and then am re-directed to ticketsnow to buy tickets at a WAY inflated price. You can tell me that they dont set aside some tickets for the scalping leg of their company. Why doesnt someone do a story on this?!?! How can those two companies be legally related? who is monitoring them???

[Greg Maragos]

There are also private, licensed, regulated intermediaries called "ticket brokers" who buy and sell tickets in much the same fashion as stock brokers.

So what's the difference between a ticket scalper and a ticket broker? Ticket brokers work above-board and pay licensing fees and taxes--that's about it. They'll still charge you whatever they think they can get for a concert ticket.

[Nils]

Heres an idea . How about putting concert tickets at a sensible price , getting RID of that convenience fee ( you money grabbing ***** ) , cos then you actually might sell out the concert without all this f*****g around ? Just a thought !

[Bob]

Ticket Master will now rip us off more than they ever have.

[RyGuy]

"Translation: expect lower prices this year."

Yeah right!! Like TM would ever make a move that would put more money in your pockets, not theirs! Now that Live Nation and TM have merged, I expect that prices will steadily go up, up, up...

Love buying a $30 ticket, just to pay a $12 convenience charge, a $4 facility fee and a $3 order processing charge on top of it.

[Bradford Talamon]

So now ticket scalping is going to be legal?

[Peter Long]

It's obvious that this just gives them an excuse to increase ticket prices so they can get the profit that scalpers make. In theory ticket prices are supposed to go down but there's no way that's actually going to happen!

Once again, the regular people get screwed.

[Semper Gumby]

Ticketmaster is so full of it.

[Nijode]

Isn't this exactly what ticket scalpers do? Having completely monopolized the concert scene I guess Ticketmaster has decided that it's time to reap a little profit.

[Bike LA]

"Translation: expect lower prices this year" Right, prices will only increase now. Ticketmasters extortionate "service fees" are already high enough, let alone the $2 fee for recieving a PDF of the ticket to print at home.

[Eric]

...why does this sound like it's probably illegal, and if it isn't, maybe it should be?

[Eddie]

Translation: front row will be $700/ticket. FACE VALUE
Translation: you pay more for your concert tickets for buying early while the person next to you pays less because the promotors were not selling enough.

The only winner here will be Live Nation, don't be fooled

[mocus11]

Pricing based on the laws of supply and demand? Why, in the past, the left has called this "price gouging". They think prices should be based on what the buyer would like to pay for them, with government determining what "a fair price" is.

[asdf]

This will not benefit consumers in any way. Prices may go up, but they will never go down. Ticketmaster has a monopoly so it has no reason to offer discounted tickets.

[Dan]

Prices are going down. I bought many tickets at discounted prices last year and assume I will again this year. Ticketmaster doesn't set the prices, the bands and their representatives do. No way they can discount anything without artist approval.

[Marcos]

Let's hope TM/Live Nation go the way of Blockbuster. They both have developed such a hatred among their users. We need an equivelent of a Netflix/Red Box to change the market.

[jerry]

So basically it comes down to this:
Big name concert that everyone wants to go to...expect to dish out your life savings.
So-so concert...wait & you can most likely get tickets cheaper.

[Mark]

The public does have the ability to effect pricing by lowering the demand…if you believe that tickets are too expensive for you and your income level…JUST DON'T BUY THEM… if enough people do that, the prices WILL come down…remember that going to a concert is NOT a right or a necessity like food or shelter…it's a luxury item. Too many people take out their credit cards to buy things they can't afford and then complain that they are being taken advantage of. The ultimate consumer power is to stop consuming things that you don't think are priced appropriately and can't afford to pay for.

[hijk]

I've been to about half a dozen concerts in the past year and they were all shows that "sold out" immediately. But at the show, it's about 25% empty, because most of the tickets were bought up by brokers, who want so much for their tickets that they never get sold. These brokers are the only ones that are going to benefit off of this!
Furthermore, unless there is a cap on how high the tickets can go, expect big artists to go as high as they have been on stubhub, which is in the thousands for nosebleeds.

[Sean]

I hope TM/Live Nation dies a long slow painful death. I hate everything that they represent. Buy your tickets at the venue and avoid "convenience charges". Ticketmaster has no interest other than themselves.

[Rocco Tarasi]

There may not be a company I hate more than Ticketmaster, and I can't wait for the day that they are disrupted by someone. I bought 4 tickets for the New Years Day NHL game, got a confirmation email back, and then the next week went to print my tickets and found the order had been cancelled. No email, no explanation.

Support finally said that I exceeded the number of seats I could buy - even though the dropdown let me pick 4 seats, apparently i was supposed to know that I could only pick 2. Worst of all, the tone of their support emails makes you picture a group of support kids laughing at their customers as they reply, ending each support email with "Thanks for being a fan!".

[Spanish Translation]

"That means a concert that's not selling well may get a price cut."