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West End theaters turn to dynamic pricing

By Alfred Branch Jr.

Similar to their Broadway counterparts, a growing number of theaters in London's West End are turning to dynamic ticket pricing to help fill seats.

Dynamic pricing, which allows for up or down price movement dependent on various factors, has been utilized in various industries for years and in professional sports more recently. Now, the Ambassador Theatre Group (ATG), the United Kingdom's largest theater owner, is also regularly using it.

In a recent interview with the Telegraph, ATG managing director Simon Palethorpe said that West End shows typically sell only 70 percent of their tickets on an average night.

Many of the remaining 30 percent of unsold tickets are the bottom level seats, as ATG is more successful moving premium seats to its shows, even in a down economy. So Palethorpe said more of his time is spent trying to figure out the best prices for those lower cost seats.

ATG also regularly increases the price of its premium tickets when demand is high.

"What we've been doing is lowering prices to try and stimulate demand at the lower end, while pushing up the prices at the top end," Palethorpe told the Telegraph.

Palethorpe added that most fans are used to variations of dynamic pricing from other industries, such as airlines and hotels, so he does not hear complaints from people who paid more for a seat than the person next to them.

"Suppose you have five different price-points depending on where you are in the house — if we sell out of the mid price-point at £30, we might bring some [tickets] from the more expensive band into that band in order to be able to continue offering the customer all five price-points," Palethorpe told the Telegraph.

On Broadway, shows such as "The Book of Mormon" and "Hugh Jackman, Back on Broadway," have successfully used dynamic pricing to help fill seats. The practice was picked up from the dozens of sports teams that raise or lower ticket prices based on variables such as the weather, scheduled opponent, or player injuries.

"Dynamic pricing can benefit any live entertainment event — whether sports, concerts or theater," Barry Kahn, founder and CEO of dynamic pricing software company Qcue, told TicketNews. "It moves pricing from a guessing game to a science."

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