Two of Broadway’s top-selling shows, “Hugh Jackman, Back on Broadway” and “The Book of Mormon,” are employing a dynamic ticket pricing model similar to that used by airlines, hotels and professional sports teams.
Under a dynamic pricing model, the face value of a ticket fluctuates with demand and varies in accordance with a number of relevant variables. For example, sports teams may adjust ticket prices well in advance of a game or on a near-term basis, depending on variables like weather, team standings or the scheduled opponent for a game.
Dynamic pricing works much in the same way when utilized by theatrical venues or productions. In the case of Jackman’s show, his mainstream popularity as an entertainer has increased demand for tickets, which in turn has caused prices to rise. As for “The Book of Mormon,” a 2011 Tony Award win for Best Musical helped spike demand and prices.
Conversely, less desirable seats for a show also can be adjusted down with dynamic pricing. The primary power of the model lies in its flexibility, allowing for these price adjustments to happen quickly on a section-by-section, or even seat-by-seat, basis.
“The way shows make money is based on the ratio between the average ticket price and capacity,” Amanda Pekoe, president of theatrical marketing agency The Pekoe Group, told TicketNews. “Dynamic pricing allows shows to play with those two elements and be competitive within the marketplace, taking advantage of supply and demand.”
Charlotte St. Martin, executive director of the Broadway League, noted that there also are potential benefits for audiences. “Dynamic pricing on Broadway has been good for theatregoers as it has opened up the pricing to enable more price options for them,” St. Martin told TicketNews.
Dynamic pricing, a long-time staple of the airline and hospitality industries, has gained a foothold in other areas in recent years. Companies like Digonex and Qcue offer dynamic pricing management software to major league sports teams. Even not-for-profit theater and dance companies reportedly have begun to adopt the model, using their own versions of dynamic pricing to help fill seats in a sluggish economy.
Dynamic pricing appears to be paying off for “Back on Broadway.” Even before the opening of Jackman’s song-and-dance revue, orchestra seats that carried a face value of $155 were bumped up to $175 apiece. And recently tickets that were $250 have been selling for at least $350 on the primary market.
“While the premium pricing has certainly been a new pricing strategy for the hot shows, it represents a very small percentage of the seats in the theatre. And those seats, while more expensive, are putting the theatregoer in the best seats in the theatre,” St. Martin said. “But the real winner on dynamic pricing has been the theatregoer who is willing to research prices; many are finding that there are more price sensitive options available to them on a year-round basis for all shows.”