Convinced that the ticketing industry can not only support several different dynamic pricing companies, but also that the market needs the technology in order to thrive, Digonex Technologies said it has high hopes for its new Sports & Entertainment Analytical Ticketing System (SEATS), which the company launched this week.
The product is going head-to-head with another dynamic pricing offering by Qcue, and over the summer, Ticketmaster Entertainment said that dynamic ticket pricing will be one of the company’s major growth initiatives in 2010.
Essentially, dynamic pricing allows sports teams, venues, promoters, artists or others to set event ticket prices on the fly based on up-to-the-minute market conditions and other factors. Qcue has already signed deals with the San Francisco Giants and the Dallas Stars, and Digonex is in discussions with some teams and expects to begin announcing deals in the next month or two.
The wind appears to be at the back of the dynamic pricing movement, and in an exclusive interview with TicketNews, Digonex CEO Jan Eglen, Ph.D. said he is optimistic the technology will continue to gain acceptance in the marketplace. Digonex has created dynamic pricing products for music labels, and it built SEATS using that experience and with the help of economists, artists, tour managers and ticketing experts.
“Just as the market supports multiple ticketing systems, it is also able to support many dynamic pricing systems. The improvements that systems which fail to use actual consumer demand information have made, indicate how much a truly accurate pricing system can gain for our customers,” Eglen said.
Next year, Eglen believes a number of entities will experiment with dynamic pricing, but 2011 is when he expects real movement toward the technology, but he was quick to add that SEATS uses actual ticket demand information in which to base its prices.
“It is not a forecasting system based on the use of proxies. SEATS provides market-based prices, not based on guesses at consumer behavior, but based on actual marketplace information,” Eglen said. “It reacts to consumer demand to provide the most accurate price for the marketplace, considering only the salient factors, and ignoring data which has no actual bearing on optimal price.”
He continued, “Inclusion of factors which consumers do not actually use to make pricing decisions results in a sub-optimal prices and lost sales and profits. Far from trial and error, SEATS uses advanced econometric analysis of consumer purchases to calculate demand and determine prices. SEATS further actively and continuously works to prevent cannibalization between different levels of seating, which no predictive system can do.”
