Today it was announced the giant ticketing monopoly LiveNation/Ticketmaster has launched an innovative new way to screw over you, the consumer. As if charging ridiculous convenience fees and service charges weren’t enough, and since ticket insurance, cut-the-line passes and exorbitant VIP parking charges weren’t earning them enough money, the ticketing giant has launched a new company call LiveAnalytics, which will add dynamic pricing to its repertoire of weapons in the war against affordable concert attendance.
Not sure what dynamic pricing means exactly? Think of airline tickets… expensive at first maybe, then they might go down if they’re not selling well, then they get really expensive again as seats fill up or the flight gets closer. The same principle will apply here, but with a few twists. Obviously, tickets will be very expensive at first to make sure only those with the most disposable of incomes will get the best seats, and if sales slow down, it also enables LiveNation to lower them little by little to see how many new sales they get, to ensure that they sell every ticket at the maximum affordability threshold of each customer. I can picture people now slashing everything from their budget and making themselves miserable so they can say that they’ll buy tickets once they drop to a certain level, getting them once they drop to that point (because if they wait longer it might sell out), and then cursing because the prices keep dropping. Next time around, that person will probably wait until they drop lower, then curse themselves when they sell out before they drop to the new set point.
In addition to making sure each customer spends the maximum amount they can afford on each ticket, LiveAnalytics seeks to ruin the business of “the secondary market.” I’m all for getting rid of scalpers (I hate scalpers), but this actually does hurt honest consumers the most. It seeks to eliminate this market by making it so that the scalper’s business would be hurt, because it would cost more to buy tickets up front, and they would be worth less after purchase, before re-gaining their value (maybe) right before the event. For the scalpers that actually go to events and scalp outside, it doesn’t affect them. However, if you bought tickets to a concert or game and then something came up and you just couldn’t make it, you’re pretty much out of luck if the event isn’t sold out. In the time leading up to the event you couldn’t sell your ticket on ebay or craigslist, because the dynamic pricing makes it cheaper to get it at the box office. The reasoning behind all this of course is because the ticket monopoly also holds a monopoly over its very own secondary ticket market called TicketExchange. I have $100 to the first taker that within 90 days of the full rollout of dynamic pricing that some sort of “fix” or “solution” will be made for people who use TicketExchange for dynamically priced tickets to make sure they can still resell them there.
The most interesting thing in the press release is the very last paragraph, where it says that in addition to historical data, they’ll be using search data and social media metrics to help determine demand. So in other words, the more people that are looking for tickets or tweeting/blogging about an event, the higher the potential tickets will be. To me, this seems to discourage people from talking about an event, but they know as much as I do that the entire sea of consumers won’t get together to game their new system. That’s the sad thing about this whole system… if we all worked together to do things like not buy tickets right away or not mention anything online, this system could be used against them to make cheaper tickets. But like they know, in this capitalistic society, that won’t happen and the opposite will happen creating even higher ticket prices and an even worse experience.
Below is the full text of their press release. Bold emphasis is my own:
LOS ANGELES – April 18, 2011 – Ticketmaster, a Live Nation Entertainment, Inc. company (NYSE: LYV), today announced a partnership with MarketShare, the leading cross-media analytics company, to develop a suite of sophisticated dynamic pricing tools to help clients set and adjust prices for their live events. The unique demand forecasting tools and next generation pricing engine will allow sports teams, artists, promoters, and venues to better understand the value of their ticket inventory throughout the entire ticketing process – both prior to, and during the onsale. The company will begin rolling out its products for certain leagues and venues, including Live Nation amphitheaters, this year.
The suite of pricing tools will be one of the signature offerings of Ticketmaster’s recently launched new venture LiveAnalytics, a Ticketmaster company. LiveAnalytics is focused on utilizing the company’s global fan data resources to develop rich data analytics products that provide clients with holistic fan insights aimed at improving ticket sales. “At Ticketmaster we have been relentlessly focused on improving the fan experience and giving our clients amazing tools to sell more tickets,” said Nathan Hubbard, CEO of Ticketmaster. “Efficient pricing is one of the most important and untapped opportunities to unlock value for fans, clients, artists and teams. 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.“
MarketShare, which also shows companies where and how to drive demand across all media, sales, price and distribution decision points based on predictive analytics, is comprised of some of the world’s leading marketing scientists, and has developed world-class demand forecasting models used globally by companies in every business vertical, including entertainment companies such as Hollywood studios and videogame companies. MarketShare has served eight of the top ten global brands as well as more than half of the Fortune 50.
“We are excited to work with Ticketmaster and help them usher in a revolution in pricing live events,” noted Jon Vein, Cofounder and CEO MarketShare. “Dynamic pricing has been a goal of the ticketing business for a long time and now, with MarketShare’s powerful analytics platform and software products, we’re proud to be revolutionizing the industry with Ticketmaster. Leveraging our combined resources, we will bring science to live entertainment ticket pricing for the first time by providing Ticketmaster’s clients with the tools they need to make truly informed sales and marketing decisions. MarketShare’s core strength is taking inefficiencies out of business environments, thereby creating substantial value to its clients, and this is a perfect application of that ability.”
Mr. Hubbard continued, “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. Meanwhile, more fans will have more opportunities to enjoy live entertainment events because tickets will be more accessible and pricing options will broaden.”
Since the beginning of the year, Ticketmaster has been actively working with four professional sports teams and Live Nation’s concert business to develop a range of data analytics products that take a holistic approach to ticket demand analysis. Ticketmaster plans to roll out its dynamic pricing tools for the MLB, NBA and NHL and concert tours. The company also has future plans to develop a tool for arts and theater. Additionally, Ticketmaster will offer initial pricing functionality across those segments.
The tools will use a wide range of data sources, from historical ticket sales to search and video activity and social media data, allowing clients to see a snapshot of meaningful data that would be otherwise impractical to track.