Concert ticket prices could rise with new 'flexible pricing'
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Concert ticket prices could rise with new 'flexible pricing' scheme
Published: Wednesday, June 01, 2011, 9:36 PM Updated: Thursday, June 02, 2011, 6:39 AM
By Peggy McGlone/The Star-Ledger
After dismal concert sales, the music industry has a new pricing strategy that might be music to the industry's ears, but not to fans who purchase tickets.
Music fans who want the best seats to a concert know they have to act fast when the show goes on sale.
Now they have another reason to pounce: If they don't get there early, they might have to pay more.
Hoping to keep some of the profits now going to brokers and sites like StubHub, Live Nation's ticketing division has introduced a flexible pricing program that allows artists and venues to change prices in real time. So if lots of fans are queued up for those $100 tickets, they won't stay $100 for long.
On the other hand, if fans are skipping the mid-priced sections and going to the cheaper seats, prices in the middle might be lowered as a result. "Generally we see the really good seats are underpriced," said John Forese, vice president of LiveAnalytics, a division of Ticketmaster, which is now part of Live Nation Entertainment. "The dynamic pricing is a way … to really take the money on the secondary market and get that in (promoters’ and artists’) pockets instead," Forese said. "That increase in revenue provides a cushion, allowing them to lower prices in sections that might not be moving. That leads to a healthy business."
The new pricing system is part of a massive shift in the way concert tickets are sold. Coming off another miserable year, concert industry officials are hoping new models will boost both total sales and total attendance. By introducing flexible pricing and partnering with popular discount websites like Groupon, industry officials believe they will stabilize sales and perhaps even see some growth.
As the summer concert season gets underway, New Jersey music fans already are seeing some changes. PNC Bank Arts Center in Holmdel, a Live Nation venue, is using the new technology on some shows as a way to better manage ticket inventory, said spokesman Jim Steen. The goal is to add more price levels and to adjust them according to consumer demand.
"There are never enough good seats and you can’t sell the first ten rows more than once," Steen said.
But Steen said PNC has not raised the top price after tickets went on sale. "Theoretically we could, but we have not," he said. "Even on the hottest shows we haven’t done it."
Any effort to address ticket prices is a good thing, said promoter John Scher, chief executive of Metropolitan Talent in New York. "Ticket pricing is destroying the concert industry," said Scher, who believes the huge jump in ticket prices has put the industry in peril. "This could have, should have, some positive effect."
The dynamic pricing program amps up current practices, which already use some flex pricing. For example, a concert that has three price points — $150, $100 and $50 — goes on sale with specific rows or sections priced at specific levels. But artists and promoters have the ability to change the boundaries of those prices as the sale unfolds.
The original plan might call for $150 tickets to extend to the 10th row, and after that the price drops to $100. If consumers have interest, that boundary can be pushed back to the 20th or 25th row. Conversely, if buyers are skipping the mid-price ticket in favor of the cheaper seat, the promoter can adjust that less-expensive section forward to include better seats at the lower price point. Consumers are unaware of the changes.
Ticketmaster’s new system goes a step further by not only adjusting the sections of seats that fall under a fixed price category but by raising and lowering the prices themselves. Forese said the program could be used at the seat level — think of the airline industry model — but neither the industry nor the consumer is ready for that.
For now, it’s helping artists and promoters get the price right at the beginning of the sales cycle by mining data about the specific market. The strategy continues right up to showtime.
"We are looking at sales rates of ticket prices on the secondary markets, looking at web traffic," he said, adding that the program uses "all those inputs to inform whether we would recommend a change to the client." Forese said most consumers won’t notice the difference.
"I’m at the site today and there are five price tiers. I can choose one or ‘Best Available,’ look around and decide I’m going to wait a day," he said. "Let’s assume there was a change: The ‘Best Available’ the next day might give you a different price."
The last few years were not good to the live music industry, which saw huge drops in attendance and revenue. In 2010, Billboard reported a 24 percent drop in attendance and a 26 percent drop in gross sales from North American events.
Pollstar, which tracks the concert business, reported the Top 100 tours for 2010 grossed $2.2 billion, down $300,000 million, or 13 percent, from the previous year.
Live Nation, which merged with Ticketmaster in 2009, reported smaller losses for the first quarter of this year. Company officials linked the slight improvement to more events and better pricing. "The goal is to price things correctly from the outset," Steen said about the dynamic pricing system. Prices can go up or down as the on-sale rolls out. For example, lawn seats at PNC typically sell closer to the concert. So for the Sept. 2 Toby Keith performance, lawn tickets were reduced the first day of the sale — as a sort of early-bird incentive, Steen said.
"Overall, everyone will benefit from that," he said.
But not everyone is happy about the changes. Jimmy Eat World drummer Zach Lind said the more prices change, the more fans are frustrated. "I think it should be one fixed ticket price so people know exactly what they’re getting, and for how much," said Lind, whose band plays the Wellmont Theatre in Montclair on Saturday.
Keeping the best seats for true fans is a wish for many artists, and Ticketmaster touts this new program as helping make that wish a reality. Musicians from Bruce Springsteen to Pearl Jam to, more recently, the electro-pop group LCD Soundsystem have tried various strategies to keep brokers from snagging the best seats and reselling them at huge profits. None have been successful. "It’s so hard to do that in the system we’ve got," Lind said.
Although Ticketmaster believes the new pricing will reduce the impact of brokers and secondary sites like StubHub, there’s not a lot of data to back that up. StubHub spokeswoman Joellen Ferrer says some sports teams have implemented dynamic pricing, but resales on StubHub have not diminished. "For events at high demand, prices go up higher on the primary market, so prices end up higher on the secondary side," she said.
"It won’t change the need for the secondary market," she added. "It changes the dynamic slightly."
If the new technology won’t remove brokers from the equation, it might reduce the number of discounts being offered. And that’s a good move. "It’s terrible for the business because you’re cheapening your product," Scher said.
Steen said PNC offered many $10 lawn tickets last year, a practice it won’t be repeating. "It was a short-term fix in a down economy," he said. "We haven’t been especially pleased with those (discounts) long-term."
But PNC may take advantage of Live Nation’s recently announced partnership with Groupon, the internet discounter. In announcing the collaboration, Live Nation president and CEO Michael Rapino said Groupon provides a new group of "casual consumers" who might be unaware of a show or looking for a bargain.
Scher agrees these bargain-hunter websites give promoters access to a "wider population" of potential buyers. But he has used these sites sparingly in the past, and expects that to continue. "We have experimented, but I think that’s just being smart business people," he said, noting that the same is Ticketmaster’s partnership.
"Potential fans, if they know you’re going to discount, if that act or play isn’t their absolute favorite, they will sit back and wait."
Concert ticket prices could rise with new 'flexible pricing' scheme
Published: Wednesday, June 01, 2011, 9:36 PM Updated: Thursday, June 02, 2011, 6:39 AM
By Peggy McGlone/The Star-Ledger
After dismal concert sales, the music industry has a new pricing strategy that might be music to the industry's ears, but not to fans who purchase tickets.
Music fans who want the best seats to a concert know they have to act fast when the show goes on sale.
Now they have another reason to pounce: If they don't get there early, they might have to pay more.
Hoping to keep some of the profits now going to brokers and sites like StubHub, Live Nation's ticketing division has introduced a flexible pricing program that allows artists and venues to change prices in real time. So if lots of fans are queued up for those $100 tickets, they won't stay $100 for long.
On the other hand, if fans are skipping the mid-priced sections and going to the cheaper seats, prices in the middle might be lowered as a result. "Generally we see the really good seats are underpriced," said John Forese, vice president of LiveAnalytics, a division of Ticketmaster, which is now part of Live Nation Entertainment. "The dynamic pricing is a way … to really take the money on the secondary market and get that in (promoters’ and artists’) pockets instead," Forese said. "That increase in revenue provides a cushion, allowing them to lower prices in sections that might not be moving. That leads to a healthy business."
The new pricing system is part of a massive shift in the way concert tickets are sold. Coming off another miserable year, concert industry officials are hoping new models will boost both total sales and total attendance. By introducing flexible pricing and partnering with popular discount websites like Groupon, industry officials believe they will stabilize sales and perhaps even see some growth.
As the summer concert season gets underway, New Jersey music fans already are seeing some changes. PNC Bank Arts Center in Holmdel, a Live Nation venue, is using the new technology on some shows as a way to better manage ticket inventory, said spokesman Jim Steen. The goal is to add more price levels and to adjust them according to consumer demand.
"There are never enough good seats and you can’t sell the first ten rows more than once," Steen said.
But Steen said PNC has not raised the top price after tickets went on sale. "Theoretically we could, but we have not," he said. "Even on the hottest shows we haven’t done it."
Any effort to address ticket prices is a good thing, said promoter John Scher, chief executive of Metropolitan Talent in New York. "Ticket pricing is destroying the concert industry," said Scher, who believes the huge jump in ticket prices has put the industry in peril. "This could have, should have, some positive effect."
The dynamic pricing program amps up current practices, which already use some flex pricing. For example, a concert that has three price points — $150, $100 and $50 — goes on sale with specific rows or sections priced at specific levels. But artists and promoters have the ability to change the boundaries of those prices as the sale unfolds.
The original plan might call for $150 tickets to extend to the 10th row, and after that the price drops to $100. If consumers have interest, that boundary can be pushed back to the 20th or 25th row. Conversely, if buyers are skipping the mid-price ticket in favor of the cheaper seat, the promoter can adjust that less-expensive section forward to include better seats at the lower price point. Consumers are unaware of the changes.
Ticketmaster’s new system goes a step further by not only adjusting the sections of seats that fall under a fixed price category but by raising and lowering the prices themselves. Forese said the program could be used at the seat level — think of the airline industry model — but neither the industry nor the consumer is ready for that.
For now, it’s helping artists and promoters get the price right at the beginning of the sales cycle by mining data about the specific market. The strategy continues right up to showtime.
"We are looking at sales rates of ticket prices on the secondary markets, looking at web traffic," he said, adding that the program uses "all those inputs to inform whether we would recommend a change to the client." Forese said most consumers won’t notice the difference.
"I’m at the site today and there are five price tiers. I can choose one or ‘Best Available,’ look around and decide I’m going to wait a day," he said. "Let’s assume there was a change: The ‘Best Available’ the next day might give you a different price."
The last few years were not good to the live music industry, which saw huge drops in attendance and revenue. In 2010, Billboard reported a 24 percent drop in attendance and a 26 percent drop in gross sales from North American events.
Pollstar, which tracks the concert business, reported the Top 100 tours for 2010 grossed $2.2 billion, down $300,000 million, or 13 percent, from the previous year.
Live Nation, which merged with Ticketmaster in 2009, reported smaller losses for the first quarter of this year. Company officials linked the slight improvement to more events and better pricing. "The goal is to price things correctly from the outset," Steen said about the dynamic pricing system. Prices can go up or down as the on-sale rolls out. For example, lawn seats at PNC typically sell closer to the concert. So for the Sept. 2 Toby Keith performance, lawn tickets were reduced the first day of the sale — as a sort of early-bird incentive, Steen said.
"Overall, everyone will benefit from that," he said.
But not everyone is happy about the changes. Jimmy Eat World drummer Zach Lind said the more prices change, the more fans are frustrated. "I think it should be one fixed ticket price so people know exactly what they’re getting, and for how much," said Lind, whose band plays the Wellmont Theatre in Montclair on Saturday.
Keeping the best seats for true fans is a wish for many artists, and Ticketmaster touts this new program as helping make that wish a reality. Musicians from Bruce Springsteen to Pearl Jam to, more recently, the electro-pop group LCD Soundsystem have tried various strategies to keep brokers from snagging the best seats and reselling them at huge profits. None have been successful. "It’s so hard to do that in the system we’ve got," Lind said.
Although Ticketmaster believes the new pricing will reduce the impact of brokers and secondary sites like StubHub, there’s not a lot of data to back that up. StubHub spokeswoman Joellen Ferrer says some sports teams have implemented dynamic pricing, but resales on StubHub have not diminished. "For events at high demand, prices go up higher on the primary market, so prices end up higher on the secondary side," she said.
"It won’t change the need for the secondary market," she added. "It changes the dynamic slightly."
If the new technology won’t remove brokers from the equation, it might reduce the number of discounts being offered. And that’s a good move. "It’s terrible for the business because you’re cheapening your product," Scher said.
Steen said PNC offered many $10 lawn tickets last year, a practice it won’t be repeating. "It was a short-term fix in a down economy," he said. "We haven’t been especially pleased with those (discounts) long-term."
But PNC may take advantage of Live Nation’s recently announced partnership with Groupon, the internet discounter. In announcing the collaboration, Live Nation president and CEO Michael Rapino said Groupon provides a new group of "casual consumers" who might be unaware of a show or looking for a bargain.
Scher agrees these bargain-hunter websites give promoters access to a "wider population" of potential buyers. But he has used these sites sparingly in the past, and expects that to continue. "We have experimented, but I think that’s just being smart business people," he said, noting that the same is Ticketmaster’s partnership.
"Potential fans, if they know you’re going to discount, if that act or play isn’t their absolute favorite, they will sit back and wait."
No time to be void or save up on life...you've got to spend it all.
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Comments
Non-VIP tickets were $25, $70 and $180.
Most of the $25 seats were in the upper level, but based on ticket sales and the proximity of the show, they first lowered the $70 seats to $25, and around the day of the show, the $180 seats were being sold for $25.
It is a great system if you don't mind waiting until the last minute, or if you don't mind the risk of being totally shut out of going.
Many Prince fans gambled by waiting for price drops, but it backfired because the final few shows sold out entirely, and they couldn't even get tix for the higher prices.
For the price of a ticket I can buy a weeks worth of groceries or pay the elec .....
Aerial, I suggest you check out the local bars, some of the best shows I've ever seen are smaller touring bands just trying to 'make it' or local bands.
Uh, yes they have. How many times do you see tickets for a Pearl Jam show in the first 10-20 rows on the secondary market? Almost never. Because those seats are reserved for fan club and you need to pick up the tickets at the venue on the day of the concert with a valid ID.
I know PJ has done a lot to try to combat the scalping, but there are still lots of good seats on stubhub, etc. It drives me crazy 'cause I got shut out of all 3 sales for the EV show in Philly, and these douchebags are selling tix on here for ridiculous prices. :(
http://www.stubhub.com/eddie-vedder-tic ... 1-1063853/