Dynamic pricing, also known as surge pricing or demand-based pricing, refers to Ticketmaster’s practice of adjusting ticket prices for an event based on projected demand. Prices may go up or down leading up to and during an event as Ticketmaster aims to optimize profitability and ensure that as many tickets are sold as possible.
How does dynamic pricing work on Ticketmaster?
Ticketmaster uses algorithms and machine learning to analyze data on past ticket sales, current sales and inquiries, venue capacity, and more. This data allows them to estimate demand and adjust pricing accordingly in real-time. Some key factors that influence dynamic pricing on Ticketmaster include:
- The popularity of the artist/team/show
- Day of week (weekends vs. weekdays)
- Specific dates (holidays or key games)
- Venue size
- Current sales and rate of purchases
- Location and local demand
As demand rises for a particular event, prices will increase; similarly, lower demand will lower prices. This system allows Ticketmaster to capture maximum value from high-demand tickets while still selling seats that might otherwise go unsold to more budget-conscious fans.
When are ticket prices most expensive on Ticketmaster?
In general, ticket prices tend to be higher at the following times:
- Immediately at on-sale: Popular events often see a spike in demand when tickets first go on sale, leading to higher initial pricing.
- As the event approaches: Prices typically rise as an event draws nearer and there are fewer tickets left.
- For weekend events: Weekend events, especially on Friday/Saturday nights, are more in demand than weekdays.
- For prime games/shows: Rivalries, playoffs, holidays, and special performances bring more demand.
However, there are no hard and fast rules, as pricing adjustments happen dynamically based on real-time sales and demand data.
When might ticket prices decrease on Ticketmaster?
While less common, ticket prices can sometimes decrease closer to an event in cases where:
- Sales are lagging behind expectations
- The event was overpriced initially
- The performing artist/team is on a losing streak
- Weather conditions deteriorate (for outdoor events)
- Last-minute production issues occur
Generally, if demand is lower than projected, Ticketmaster may strategically reduce prices to help fill more seats.
How much do Ticketmaster prices fluctuate?
It varies event-to-event, but price fluctuations can be quite significant based on demand. Some examples of price changes for major concerts and games:
| Event | Initial Price Range | Final Price Range | Change |
|---|---|---|---|
| Beyonce – Formation Tour | $50-$400 | $100-$1200 | +150% |
| Adele – Madison Square Garden | $85-$500 | $250-$950 | +100% |
| NBA Finals Game 7 | $300-$600 | $800-$5000 | +200% |
As you can see, prices for hot events can easily double or triple. Less popular events may see little to no fluctuation.
What factors increase the likelihood of surge pricing?
Certain events and situations make surge pricing more likely on Ticketmaster:
- Headlining acts with a huge fanbase like Taylor Swift, Beyonce, or major rock/pop acts
- Championship and playoff games, especially if the home team is playing
- Rivalry games like Yankees vs. Red Sox
- Holidays and weekends
- Special nights like New Year’s Eve
- Arena concerts with greater production/effects than average tour stops
- Farewell tours or one-off reunion shows
- Debut shows in a new city/venue
- Inclement weather lowering supply for an outdoor event
Essentially, the more interest there is surrounding an event, the more demand pricing comes into play as fans rush for limited tickets.
Can Ticketmaster tickets sell out before public on-sales?
Yes, it’s possible for Ticketmaster events to sell out before the public on-sale date. Some reasons this can happen:
- Pre-sales: Many tickets are reserved for pre-sales such as fan club members, credit card holders, and promoter/artist presales. These can scoop up 10-30%+ of available tickets.
- Platinum tickets: Ticketmaster runs its own presale called Platinum tickets, which are dynamically priced higher based on demand.
- Season ticket holders: Season ticket holders get first access to buy tickets for additional shows beyond their included packages.
- VIP/Official platinum packages: These bundled deals with perks like meet & greets also reserve tickets.
- Venue and artist holds: The venue and performers often hold back tickets for friends/family/VIPs.
With so many tickets going to various presales and holds, major shows can easily sell out before ever making it to the general on-sale date. Fans may see sky-high resale prices on the secondary market as a result.
Does Ticketmaster benefit from scalpers and the secondary market?
While Ticketmaster does not directly participate in scalping or set resale prices, there are some ways it likely benefits indirectly:
- High secondary prices indicate high demand, which may encourage Ticketmaster to gradually raise prices.
- Fans seeing exorbitant secondary market prices may rush to buy direct during presales.
- Ticketmaster owns resale site TM+ and can double-dip on fees when tickets are resold.
- Scarcity from presales may increase overall revenue despite some tickets ending up on resale sites.
By restricting supply during presales and on-sales, Ticketmaster helps fuel the perception of tickets being highly scarce and valuable commodities. This benefits their pricing strategies, even if some resellers profit as well.
Does Ticketmaster have any protections against scalpers?
Ticketmaster does utilize some measures intended to get more tickets directly to fans and limit scalping:
- Limits on ticket purchases: Limits are placed on how many tickets one customer can buy, often 4-8 tickets.
- CAPTCHAs and queues: These help prevent bots rapidly sweeping up tickets.
- Restricted ticket transfers: Ticketmaster can restrict ticket transfers to prevent reselling.
- Platinum tickets: Platinum tickets are priced high initially, reducing profit potential for resellers.
However, professional scalpers still manage to procure large inventories despite these protections. More extreme measures like ID checks on entry or non-transferable tickets tend to be avoided as they also frustrate regular customers.
Are Ticketmaster fees a hidden way to increase prices?
Ticketmaster service and processing fees often add 25-30% or more to the base price. These unpopular fees certainly generate significant added revenue. While Ticketmaster claims the fees cover their operating costs, critics argue the fees essentially represent a hidden price hike:
- Fees disproportionately impact cheaper tickets, effectively raising percentage margins.
- Fee names like “processing” and “service” obscure that they are revenue.
- Fee amounts are not correlated with actual costs and are inconsistently applied.
- Venues could include fees in base prices if Ticketmaster didn’t control ticketing.
For high-demand events, Ticketmaster likely charges fees up to what the market will bear. However, they avoid criticism by keeping the fees technically separate from the initial ticket price.
Is Ticketmaster a monopoly in event ticketing?
Ticketmaster falls just short of being an outright monopoly, but does have tremendous market power:
- They have 70-80% market share of primary event ticketing in North America.
- Live Nation, the largest concert promoter, owns Ticketmaster.
- Many major venues exclusively use Ticketmaster for all events.
- Their comprehensive platform and established scale create high barriers to entry for competitors.
While rivals like AXS, SeatGeek, and Songkick have modest footholds, Ticketmaster remains dominant. Their exclusive contracts and lack of serious competition allow them to implement unpopular policies like dynamic pricing and high fees.
Is Ticketmaster’s market position anti-competitive?
Ticketmaster has faced anti-trust allegations over its practices and market power. Critics argue:
- Long-term exclusive venue contracts limit consumer choice.
- Their integration with Live Nation incentivizes exploiting consumers.
- Predatory pricing undercuts competitors.
- Strict restrictions throttle innovation.
However, thus far, Ticketmaster has avoided being broken up or significantly regulated. They benefit from inertia given their established systems and having deep roots across venues, leagues, and promoters.
Could Ticketmaster’s pricing be considered price gouging?
While Ticketmaster’s dynamic pricing practices are controversial, they likely do not meet the legal definition of price gouging, which requires proving:
- Prices grossly exceed fair market value.
- Pricing is unjustified based on actual costs.
- Customers have no alternatives and are powerless.
- The pricing exploits a crisis or event affecting public safety.
Ticketmaster can argue prices simply reflect fair market demand. And ticket prices are historically variable, not essential items. As long as transparent pricing information is provided, drastic fluctuations are generally legal, if unpopular.
Could artist presales make pricing fairer for fans?
Some advocates argue artist fan club presales are a fairer model since they reward loyal supporters. Benefits of artist presales include:
- Fans with the strongest interest buy first.
- Bots have less impact compared to public sales.
- Artists can limit number of tickets per buyer.
- Tickets might be priced closer to face value.
However, artist presales are typically still conducted via Ticketmaster. Variable pricing may still occur, just with a smaller subset of seats. Overall supply constraints remain as well. So artist presales help dedicated fans but are not a cure-all.
Could Ticketmaster dynamic pricing be regulated?
New regulations could aim to constrain Ticketmaster’s pricing practices. Potential regulations might include:
- Caps on price fluctuations or fees.
- Disclosure rules for initial prices and expected increases.
- Limits on holds/presales to ensure sufficient public supply.
- Requirements to license ticketing software to competitors.
- Prohibitions on restricting ticket transfers.
However, Ticketmaster would likely lobby hard against any major new constraints, arguing they would unfairly restrict their business. And enforcing pricing regulations would be challenging in practice.
Does Ticketmaster face PR backlash over dynamic pricing?
Ticketmaster’s pricing practices consistently fuel negative public relations:
- Stories of spiking prices spark outrage from fans.
- Artists like Bruce Springsteen, Bob Seger, and Garth Brooks have criticized surge pricing.
- Class action lawsuits over deceptive fees have cost millions in settlements, despite Ticketmaster not admitting wrongdoing.
- Complaints abound online over presales selling out instantly.
However, Ticketmaster seems willing to absorb the PR hits. Negative headlines have not substantially hurt ticket sales or led to meaningful policy changes thus far. The lure of huge concerts and games persists despite pricing backlash.
How could technology impact Ticketmaster’s pricing model?
Emerging technologies could potentially disrupt Ticketmaster’s pricing advantage:
- Blockchain ticketing: Crypto tokens could enable trading while bypassing Ticketmaster fees and limits.
- AI pricing optimization: Machine learning could enable more dynamic pricing tailored to micro-segments.
- Smart contracts: Programmatic rules could enforce caps on fluctuations and transparency.
- Biometrics: Facial/fingerprint ID could reduce scalping, counterfeiting, and improve fan verification.
However, Ticketmaster is also investing heavily in technology. They may co-opt innovations like blockchain to preserve their role while adding a technical veneer. Major tech disruption seems unlikely given Ticketmaster’s entrenched position.
Conclusion
In summary, Ticketmaster’s variable and surge pricing system allows them to maximize revenues for high-demand events. By using presales and tightly controlling inventory, they create ticket scarcity that supports price fluctuations based on market demand. Fans dislike seeing prices skyrocket for hot shows and games, but Ticketmaster’s dominant market power and exclusive venue deals reinforce their advantageous position. Despite ongoing controversies and criticism, the company has limited incentive to abandon dynamic pricing as long as consumer enthusiasm for live events remains strong. While technology could potentially open new models, Ticketmaster’s pricing practices seem likely to persist given their continued stranglehold on the primary event ticketing market.
