Ticketing giant Ticketmaster this week unveiled a new dynamic ticket pricing tool, which the company believes will beat ticket resellers at their own game.
Dynamic pricing, which has been used by airlines and hotels for years, allows sports teams, venues, promoters and others to raise or lower ticket prices on-the-fly depending on various factors, such as demand, the weather, a team’s opponent or an artist’s warm up act. Ticketmaster, which is owned by concert promoter and artist management company Live Nation, is partnering with data analysis company MarketShare to create the product, which the two plan to roll out to Ticketmaster clients this spring.
Ticketmaster hopes that the new product will help its clients better price their tickets by allowing “sports teams, artists, promoters, and venues to better understand the value of their ticket inventory throughout the entire ticketing process.”
Nathan Hubbard, CEO of Ticketmaster, is also convinced that dynamic pricing will help the company combat the secondary ticket market, an industry that Ticketmaster is involved in through its TicketsNow and TicketExchange divisions, but that Hubbard has heavily criticized in recent weeks.
“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,” Hubbard said in a statement. “Meanwhile, more fans will have more opportunities to enjoy live entertainment events because tickets will be more accessible and pricing options will broaden.”
In an interview with the Associated Press, Hubbard added, “When the fan experience is not clouded by scalpers grabbing seats, or when there’s more options for fans to come to a better show, that has a great impact on our business.”
Dr. Barry Kahn, founder and CEO of dynamic pricing company Qcue, told TicketNews in a statement that while Ticketmaster presents a formidable challenger in the dynamic pricing space, the company is a little late to the game. Qcue’s work with the San Francisco Giants over the past couple of years is credited with helping to jump start the dynamic pricing industry. Those efforts have a big success for the Giants, helping the team sell more tickets, but they would appear to have had little or no negative impact on the secondary ticket market.
“Over the last few years, we have proven the value in dynamic pricing so it’s only natural Ticketmaster decided to enter the space. They’ve talked about it for some time and actually announced LiveAnalytics two months ago at the MIT Sports Analytics conference, however it sounds as if they have yet to begin development,” Kahn said. “There’s a lot involved in bringing a product like this to market, so we will all have to withhold judgment until there is a tangible product to discuss. It is interesting that they decided to outsource the development [to MarketShare]. As a software company, we feel it’s very important to have resources engaged with the clients and innovating on a day-to-day basis in order to keep up with changing needs. A first generation solution is going to be challenged to compete in this fast-moving space.”
Live Nation President and CEO Michael Rapino identified dynamic pricing as one of the company’s chief priorities in 2011 and beyond, and a growing number of sports teams and venues have begun utilizing the practice in the past year.
“Efficient pricing is one of the most important and untapped opportunities to unlock value for fans, clients, artists and teams,” Hubbard said in a statement. “Our partnership with MarketShare adds to our unparalleled combination of data and analytical resources that inform our clients on the true value of their tickets, while giving them the flexibility to rapidly respond as that value fluctuates over time.”
“We believe [Ticketmaster’s] offering validates what we have been doing and advocating for years,” Jan Eglen, CEO of competing dynamic pricing company Digonex Technologies, told TicketNews in a statement. “Further, competition is good for the marketplace. Digonex will continue to provide cutting-edge, patented technology combined with the best customer service in the business. In our experience and in responses from our customers that combination makes all the difference.”
Both Digonex and Qcue have multiple contracts with various sports teams in the four major North American professional sports and NASCAR, and in several cases their software is already integrated with Ticketmaster’s ticketing technology.
“A lot has been said about dynamic pricing helping Ticketmaster reduce fees or improving their bottom line. It’s important to remember that Ticketmaster doesn’t control prices. Prices are controlled by teams/organizations. Ticketmaster is a software provider and distribution platform, similar to us. We’re confident that when people have the choice of which dynamic pricing software solution they want to work with, they will choose us,” Kahn said.
In addition to the dynamic pricing product and data analysis initiative, Ticketmaster has aggressively tried to market itself in a positive light, moves that one former head of the company says shows Ticketmaster’s nervousness about the rapidly evolving ticketing space.
“The timing of all these announcements by Ticketmaster is a reflection of the pressure they are facing in the marketplace,” Fred Rosen, former Ticketmaster CEO and current co-CEO of rival ticketing company Outbox Technology, told TicketNews. Outbox recently teamed up with Anschutz Entertainment Group to create a robust alternative to Ticketmaster that uses a “white label” approach in providing ticketing solutions to its clients.
“The future of ticketing is about venues and others dealing directly with the consumer, and while these are nice tools, they can’t fix the underlying problem that Ticketmaster is the middleman between the venue and the consumer,” Rosen added.