Marketplace Scratch Pad

Scalping, er, "dynamic" ticket pricing

Scott Jagow Sep 16, 2009

Let’s say the backup quarterback is playing this week or the understudy is subbing tonight because the Broadway star is sick. Under a new ticket pricing system that’s getting some attention, the tickets to this week’s game or tonight’s show could drop significantly. Of course, the tickets to a must-win game or a finale show could skyrocket at the last minute.

The NHL’s Dallas Stars and baseball’s San Francisco Giants are the two teams so far to sign deals with a company called Qcue, which specializes in “dynamic pricing.” It’s something akin to airline ticketing — conceivably, the software can be programmed to change ticket prices every 15 minutes. But it won’t be quite that dynamic for games. From Yahoo Sports:

The price charts won’t be spinning like the big boards on Wall Street, but they’ll be changing during the season in an industry known for setting prices long before the first game and leaving them alone. If the Stars are Stanley Cup contenders, fans will have to contend with a bull market.

“We’re really looking at much more matching the value of the game to the price of the ticket than we are just a carnival game,” said Barry Kahn, chief executive of Qcue…

Let’s not confuse this with “variable pricing,” which many teams do already. That’s where teams set different prices at the beginning of the season for rivalry games or popular teams coming to town. The idea with dynamic pricing is that prices can change right up ’til game time.

Think scalpers like that? Uh, no. From the Puck Daddy blog:

“You’re theoretically decreasing the margins on the secondary market if you’re pricing them appropriately on the primary market,” (Stars VP of Marketing Colin) Faulkner said. “I don’t think they like it very much.”

It could be a significant step in teams attempting to freeze out scalpers from the process altogether.

“You’re starting to see the primary market and the secondary market’s lines being blurred together,” Faulkner said. “Teams would ultimately like to control the primary market and the secondary market. To use the airline example, it used to be that you needed a physical ticket to go ride on an airplane. When they first introduced ticketless technology, people were a little freaked out, but now it’s the standard. There’s no transferring your ticket to anybody else on a plane. Maybe that’s where it goes with teams.”

But there are also some questions. What about season ticket holders? They pay in advance. Should they get some kind of dynamic pricing refund?

Does this completely wipe out the chance for a family of four with moderate income to see the Yankees-Red Sox on a Saturday night?

Is it a good thing to have teams taking over the secondary market and killing the “scalpers?” Scalping is a more legitimate biz these days (and trying to band together against dynamic pricing).

On the other hand, dynamic pricing does give you the opportunity to get a deal on tickets, if you don’t mind seeing the Washington Capitals without Alexander Ovechkin on a Tuesday night. As of now, unless you buy secondary, you’re going to get the same price at the window whether Ovechkin’s playing or not.

One last thing. Ticketmaster plans to roll out a dynamic pricing model this fall.

That might say it all.

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