Stand By For "Dynamic Ticket Pricing"

There is an interesting editorial in this tonight's London Evening Standard about ticket pricing and how much touts (scalpers) make out of selling tickets they buy "cheaply" from artists. It goes on the say that the RAH is piloting a new system of dynamic pricing whereby the price moves in line with demand, rather like budget airline fares. How this works in practice I haven't a clue as it sounds like the ticket price could increase in a matter of seconds when they go on sale to a point where the ordinary fan on a limited budget would just give up.   It makes me glad that most of the bands I want to see still price their tickets in the tens of pounds rather than hundreds.

What do you think?

Simon Jenkins: How making tickets cheaper for ‘real’ fans is a gift to the touts

"If worried stars want to help the less well off they could give free concerts in the park or offer entry on the night:

Adele is peeved. Too many people cannot get into her concerts. There aren’t enough tickets to go around and they are turning to the touts. As a result, one enterprising operator was reported to be charging £24,840 to get into Adele’s O2 concert later this month. That was a ticket originally priced by her philanthropic manager at just £85. Elsewhere on the internet prices were a comparative snip, at £4,000 to £7,000. In the bargain basement some were as low as £350.

Adele is not alone in her concern. Tickets for West End shows regularly sell for multiples of the face price, through resale sites such as Getmein, Viagogo, Seatwave and StubHub. The Harry Potter stage show has £100 tickets going in the region of £1,000 to £2,000. Justin Bieber’s October tour has £50 tickets going for £1,825.

The maxim is simple. A secondary market flourishes where a primary one has failed. The fault lies entirely with the stars and their delicate egos. They claim to want audiences to be “real fans”, whom they identify as young and (relatively) poor.

Yet I should think anyone stupid enough to pay £4,000 for an Adele ticket, even if deplorably old and rich, must at least be a fan.

We have heard similar wails in the past from the likes of The Rolling Stones, Elton John, Prince and Coldplay. Three years ago, £95 tickets to see the Stones in Hyde Park were going for £1,700, and some even for £12,000.  I got the gist of the show by sitting on the grass outside the barriers. This was despite Royal Parks heavies trying to move us riff-raff 100 yards away so as to be out of earshot. That is how much the Stones really cared for poorer fans.

Herculean efforts are now expended on trying to regulate the secondary market, which experts estimate handles some 20 per cent of the high-value ticket market. There is even a ludicrous government inquiry into it. Adele has an elaborate pre-sale registration system for named fans. The Twickets website offers face-value ticket exchanges. Touts are threatened with dire penalties. Even so, such “original purchaser” schemes leak into the secondary market. Most venues hate ID and photograph checks, which clog entrances and cause rows.

This business is economically illiterate. Ticket touts are middle-men performing a service. They are equating demand with supply, where performers are too fastidious to do it themselves. The touts are not inflating prices, it is performers who deflate them. Just because big stars want to show love for their fans by under-pricing their tickets does not mean the market will vanish.

If Adele and others are worried about the distributional ethics of their work, they can always give free concerts in the park until they drop. They can hold back tickets for “real” fans, however identified, who queue on the night. They can give them to students — perhaps the quickest route to the black market.

But as long as they charge below what the market will bear, two things follow. They will deprive themselves (and their support teams) of the true cash value of their work. And someone less deserving will find a way of realising and pocketing that value.

Adele’s pre-sale scheme for this spring’s tour is estimated to have cost £4 million in lost profit to the secondary market. That is a loss not just to the touts but to her and her art. How many poor fans really benefitted from that £4 million? Were they means-tested? Was there no other way to reach them than by underpricing all the tickets?

Popular West End shows may seem expensive but tickets are nowadays going for two, three, even 10 times their face value on the black market. Any show that sells out is, by definition, underpriced. It is money the public was prepared to pay to actors, writers, designers, stage managers and is paid instead to spivs. It is a free gift from the West End theatre collectively to the ticket touts. Three years ago the police calculated that this donation was worth some £40 million a year. I am glad the theatre can afford it.

In the “post-digital” age, millions crave live experience. They have spent the day gazing moronically at a screen and are frantic to escape in the evening. This has given the lie to all prediction that the internet would spell doom for live performance. The internet is the portal to life.

At the apex of this experience are performers who can command big audiences and high prices. By refusing to match those prices to demand, they divert fans from lesser shows. They deprive themselves and their venues of profit, and they feed a booming black market.

Tickets should no more be fixed for seats in theatres than for seats on planes. Modern computerisation can establish the market price for any ticket — which is what the resale agencies are already doing.

At the click of a mouse, a purchaser can learn the cost of seeing any show in town, rising and falling in response to demand. Such flexible ticketing would maximise revenue from popular shows and direct demand to less popular ones. Everyone would gain. Such a system of so-called “dynamic pricing” is being trialled at the Royal Albert Hall. Everyone gains.

If Adele is so concerned for the poor, she should sell all her tickets for what the market will bear. She should pocket the cash and then decide how to distribute it to the poor. Or perhaps she and her fellow stars might instead donate to the London arts budget the £40 million they give the touts each year. At present they are the touts’ best friend."