FULL HOUSES: Turning Data into Audiences

Pricing Baseball Tickets Like Airline Seats

22 May, 2010 at 12:31 pm Tim Roberts ARTS Australia 1 comment

A background piece in Bloomberg Businessweek about Barry Kahn of Qcue (pronounced “Q-Q”).

The San Francisco Giants are using Qcue software to “price baseball games in much the same way airlines manage seat prices to keep planes full“. Hmm a full plane (i.e. all seats sold) is reducing loss on the fixed price of ‘empty seat’ and is a different thing to maximising profit on prices alone. There are issues here regarding access, let alone equity.

Will this preclude such cutting edge technology from being applied to the ‘not-for-profit’ or subsidised arts? Alternatively, will it just be a more complex algorithm that addresses larger issues of better synchronising demand with supply (not just audience development) within the parameters of a cross subsidy of yield maximisation?

“The Giants say the technology could add $5 million-plus in revenue this year. Revenues are up 12% this season and attendance has jumped 7% (true, the team is playing well), …” That is one thing entertainment does not have going for it – a winning streak!

“”There’s big money out there in lost revenue from mispricing,” Kahn says—more than $20 billion a year for live sports and entertainment, much of it cash that today goes to scalpers. Flexible pricing, he says, lets teams “hedge their bets in bad times and capture the benefits of the good times.“”

I am not so sure that scalping is purely due to ‘mis-pricing’. What do you reckon?

Entry filed under: audience development, box office, Case Studies, Dynamic Pricing, Loyalty, News, scalping. Tags: audience development, competition, Dynamic Pricing, variable pricing.