Ticketmaster Plans to Use a Variable Pricing PolicyBy BEN SISARIO
Buying concert tickets may soon be more like booking an airline flight: what you pay could be determined by when you order.
The concert giant Ticketmaster announced a partnership Monday with MarketShare, a data analyst, that will look at ways to introduce what is known as dynamic pricing, which allows promoters to adjust prices according to demand. In theory, this would allow promoters to sell the most sought-after tickets at a higher price, while filling up the least desirable seats by charging less. Not every event would be sold that way. But it would also allow the company to compete more effectively against scalpers like StubHub.com.
?Efficient pricing is one of the most important and untapped opportunities to unlock value for fans, clients, artists and teams,? Nathan Hubbard, chief executive of Ticketmaster, said in a statement.
Ticketmaster, a division of Live Nation Entertainment, sold about 140 million tickets last year. But as more ticketing companies enter the fray, the company is under pressure to develop more competitive technology. Fred Rosen, Ticketmaster?s chief executive in the 1980s and ?90s, recently began a new ticketing company, Outbox, a joint venture with Cirque du Soleil and the promoter A.E.G. Live, Live Nation?s biggest competitor.
Ticketmaster said it would begin to introduce its new pricing policy for concerts and sporting events this year. Notably, the announcement said it would be introduced at Live Nation?s amphitheaters, where low attendance contributed to the company?s $228.4 million loss last year.
Some sports teams, like the San Francisco Giants, have been experimenting with dynamic pricing for years, but the music industry has been slow to adopt it. Concert promoters and theater owners tend to favor it as a way to sell more tickets and squeeze out scalpers, but artists often worry that they would appear to be exploiting their fans? loyalty by maximizing price.
In the announcement, Mr. Hubbard said that Ticketmaster was ?relentlessly focused on improving the fan experience and giving our clients amazing tools to sell more tickets.?
Some critics of the industry say fans play little part in the deal. ?The people who run dynamic pricing want to pitch it as a benefit to fans for lower-priced tickets to some events,? said Joris Drayer, an assistant professor of sport and recreation management at Temple University, who studies the ticketing industry. ?The reality is that this is a purely revenue-driven concept.?
Despite last year?s losses, pay for Live Nation?s top executives rose last year, according to a proxy statement filed with the Securities and Exchange Commission on Friday. The total compensation for Michael Rapino, its president and chief executive, was $15.9 million, more than double his 2009 pay of $6.7 million. Irving Azoff, the executive chairman, made $22.8 million, and Mr. Hubbard earned $5.7 million.
