Posts filed under ‘Dynamic Pricing’
More transparency added to unfair ADD ON FEES
Fee Transparency = “a compromise to freedom of speech“
Oh pullease … my ass
Add on fees for “convenience” et al are just that .. convenient ways to squeeze more out of the consumer.
Here is a good comparison of airlines and concert tickets. They are both interested in yield management and revenue maximisation, but responsible behaviour comes down to one thing: … TRANSPARENCY
Has Google entered the travel industry quietly with Flight Search?
While it is currently only for a handful of cities (including New York, Chicago, Los Angeles, Dallas and Minneapolis) and for a few airlines (namely Delta, JetBlue, Continental and American Airlines) … oh and only the US – the introduction of Flight Search will be very interesting to watch as it is rolled out further.
In theory, Flight Search will allow you to search for flights by a variety of criteria including price, location and other combinations including duration, stopovers, even loyalty program etc. It has a simple and intuitive Google Maps style interface and lets you iteratively filter and fine tune an airfare search. This would get even more powerful if Google integrated tools like Street Map, Hotel search and so-on.
An early iteration was launched in May 2011 following Google’s purchase in July 2010 of ITA for US$700M. ITA is the developer of the airfare search and pricing system QPX that is used by major airlines. There are no clues yet whether this will follow a similar business model as Orbitz, TripAdvisor or Kayak which use QPX and whether Google has or will strike deals with airlines and prioritise ‘searches’ accordingly or whether Google Flight Search will remain definitive and neutral.
What has this got do with Entertainment?
I am glad you asked! The ITA/Flight Search model accesses various airline schedules and integrates these to offer one view of the various options. I wonder if Google has considered accessing or integrating with the various ticketing services to offer similar functionality for entertainment? It is an interesting idea that you could search what is on in a city independent of the ticketing service selling the event. That sounds like some of the various individual portal projects like www.seethis.com in Manchester or others from www.artsopolis.com to www.theatrebayarea.org. However, rather than develop such initiatives from scratch, imagine if Google just included such funtionality? The questions that remain is what business model Google envisages for Flight Search and what would the possibilities be for Event Search ™ 
Google Makes Even More Sites Redundant With Introduction Of Flight Search
Emerging practice shared with you from Chicago
I recently attended the annual CultureLab meeting in Chicago and as part of the meeting of cultural consultants, funders and practitioners. The second day consisted of a variety of international best practice case studies ranging from Steppenwolf Theatre in Chicago to Malmö Opera in Sweden.
The presentations are available online at the CultureLab Emerging Practice Seminar
CultureLab’s Emerging Practice Seminar is a concerted effort to bring forward promising new practices in the cultural sector and transmit them to the field.
Each year, two practice areas are selected that represent important developments for the arts field. The 2011 seminar focused on:
- Uses of technology in audience engagement
- Revenue management and dynamic pricing
The discussion of each topic featured several case studies drawn from arts organizations from USA to Sweden, and Australia and New Zealand in between.
Are ticket prices that depend on demand, really equitable?
There seem to be quite a few articles (re-purposed press releases?) about dynamic pricing lately. I wonder if ‘someone’ has decided that it is the answer to extract more revenue from the marketplace.
“‘dynamic’ or ‘variable’ pricing — a ticketing philosophy that has theaters and arenas boosting ticket prices based on hot-selling shows and popular game days. Prices also can decrease based on demand.“
“It’s going to give the buying public more power and more options,” said Sammy Wallace, vice president of event programming at Germain Arena in Estero. “You could pay more for a ticket, or you could pay less. It’s really up to you.”
Is it too cynical to suggest that you could pay more for a ticket or not go, it’s really up to you?
“Overpriced tickets can cut out budget-minded buyers, while underpriced tickets can lead to ticket scalping because some fans are willing to pay much more for the best-possible seats. Dynamic pricing helps correct that.“
I find the concern for the “budget minded buyers” a convenient social equity argument and I wonder how often dynamic pricing goes the other way? Didn’t that used to be called discounting of less desirable seats to acquit social accessibility responsibilities?
“Economics is driving this new ticketing trend. Dynamic pricing is a response to many factors, including higher production costs and artist fees, lackluster ticket and album sales, and the looming specter of ticket scalpers.” I think the real driving factors have been identified here and … sorry … the consumer and better or more equitable service is not identified as a driver.
Role of agencies diminishes as online matures?
Yeah alright, the article below is about travel.
Role of travel agencies diminishes as online travel matures
However, it does raise some interesting points that are relevant considerations for entertainment ticketing online.
“…travel agents may well have to find other innovative ways to be of some value to travellers. However, in a country where a culture of full service prevails, the role of agencies is not expected to dissipate any time soon.“ The same can not be said of ticket agency outlets with the rapid adoption of online ticketing for entertainment and sport, even with the cheeky charges for to serve yourself and even print the ticket yourself.
“Online bookings can yield up to seven per cent savings and are alluring to price sensitive customers.” It is a shame the same does not apply for entertainment and sport bookings online. Afterall it is ‘self service’.
It is an interesting prespective that online booking reduces costs for merchant and consumer and facilitates”… dynamic pricing, a practice for which the airline industry is notorious … allows consumers to balance their own ticket features and pricing.“
Ticketmaster: Transparency or Attribution?
CEO of Ticketmaster Nathan Hubbard has launched a blog called Ticketology which appears to be part of the parent company Live Nation Entertainment’s efforts at greater transparency.
“We get it — you don’t like service fees. You don’t like them mostly because you don’t understand what the heck they are for.“
The mooted transparency appears to be more a case of attribution, however. Prices are not going down, fees are not being reduced and other than specifying some fees a little earlier in the sales process – the final price paid per ticket is still inflated by a diversity of fees and charges.
“Most of the parties in the live event value chain participate in these service fees either directly or indirectly — promoters, venues, teams, artists and, yes, ticketing companies.“
The promised “all-in-pricing” heralded by Live Nation Entertainment chief Irving Azoff still seems beyond his reach and the current sales process used by Ticketmaster gets in the way of that as suggested by Azoff on Twitter.
READ FULL ARTICLE Ticketmaster’s new blog: ‘We get it — you don’t like service fees’
Rather than individual pricing, personalised discounting based on behaviour
An interesting innovation reported in the New York Times 
Sam’s Club Personalizes Discounts for Buyers
Rather than discount coupons, Sam’s (part of Wal-Mart) eValues is offering direct discounts to club members “ … coupons normally had a response rate of 1 percent or 2 percent. With eValues … as many as 20 percent to 30 percent of eligible customers collect the discount they are offered.“
“There’s no clipping coupons,” eValues offers “highly individual relevant offers specific to each Plus member. All they have to do is purchase the product, and the savings are automatically applied at checkout.”
The program targets discounts based on previous purchase behaviour with ”predictive analytics, which uses vast amounts of data to spot trends and anticipate consumer behavior.“
“If you get more relevant to shoppers, you get more loyalty, you get more business,”
“Sam’s Club can vary the message and price in the communication received by the customer … Aside from the cost savings, tailored messages to consumers can also highlight specific product attributes that a particular consumer typically seeks, like “organic” or “environmentally friendly,”“
Dynamic Pricing Is The Key To Sporting Industry’s Woes
Yes this article is about sport in America, but get over it We can still learn from it.
The language is interesting for a start:
“Without fans in the stands, sponsorships become worthless …“
“… why these teams, and many others, suffer the indignity of playing in front of half empty stadiums …“
What about the fans themselves? Maybe I am being a little customer focussed here. But, isn’t a half empty stadium rude to them and a handicap to their enjoyment of the event? A live event (whether sport, theatre or a concert) is just that live – with a live audience. Half an audience is only half as exciting.
I find the demand equation mooted by blogger Marty Teller of interest:
(Team Affinity X Performance) / Opportunity Cost (other options) = Price Willing to Pay
“Besides winning, isn’t growing revenue the primary goal of any sports team (and any business, for that matter)?“
Yes, access and equity may be concepts important to not for profit and funded organisations, but a team without fans or supporters is a hobby, dare I say an amateur pursuit. I prefer the perspective of Theodore Levitt “The purpose of a business is to create and keep a customer”. With that sort of focus, revenue follows.
However, the article then turns focusses on dynamic pricing as the answer to the secondary market and hence an advertisement for QCue.
Pricing Baseball Tickets Like Airline Seats
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?
The marriage of Ticketmaster and Live Nation: Say hello to the $400 ticket?
Is Broooce showing his discomfort at the merger?
Live Nation Entertainment CEO Michael Rapino in Is This Merger Just The Ticket? “In my business, the cheaper the ticket price the better. I’d love for more consumers to walk into an amphitheater, park, have a beer and eat a hot dog. There’s no advantage to me to have anything but sold-out shows.” – LA Times 12 Feb 2009
However, just over a year later Rapino’s tune has changed in the 1st 1/4 2010 Conference Call: “Our fundamental belief at Ticketmaster/Live Nation is the answer to grow our business is less about trying to make $5 or $6 million in service fees off secondaries and much more important to figure out how to capture that $1 billion in up-sell on the face value of tickets,“
The merged entity, Live Nation Entertainment, now seems less concerned with fees and wants control of the price of tickets.
