Dynamic pricing is a ticketing strategy used by Ticketmaster and other ticket sellers whereby prices fluctuate based on supply and demand. This differs from traditional static ticket pricing, where prices are set ahead of time and do not change. With dynamic pricing, prices for the same tickets can vary leading up to and during ticket sales.
Some major artists like Bruce Springsteen have voiced opposition to dynamic pricing and have tried to opt out of this system. However, the realities of modern ticketing make it extremely difficult for artists to avoid dynamic pricing altogether when using a major ticketing company like Ticketmaster.
What is dynamic pricing?
Dynamic pricing, also known as surge pricing or demand-based pricing, is a pricing strategy where prices fluctuate based on current demand. Airlines and rideshare services like Uber commonly use dynamic pricing models, where prices increase when demand is higher.
For event tickets sold through Ticketmaster, dynamic pricing means ticket prices can adjust over time based on factors like:
- Current ticket sales and demand
- Seat location in the venue
- Day of the week (weekend shows are often more expensive)
- Artist popularity and trends
- Timing relative to the event (prices often rise as event approaches)
So a ticket to a hot show on a Saturday night will inherently cost more than a Tuesday night show later in the tour. Similarly, better seats will cost more than seats far away from the stage.
Why do ticketing companies use dynamic pricing?
From a business perspective, dynamic pricing allows ticketing companies like Ticketmaster to maximize revenue. By using algorithms to adjust pricing based on demand cues like sales velocity, they can charge higher prices when demand is spiking.
Dynamic pricing also helps underprice and overprice tickets. Underpricing leaves money on the table, while overpricing leads to empty seats and unsold inventory. By fluctuating prices, dynamic pricing aims to reach the optimal market value for tickets.
For high demand shows that sell out instantly, dynamic pricing lets ticketing companies capture more revenue from these coveted tickets.
Why do some artists oppose dynamic pricing?
Some major touring artists like Bruce Springsteen have publicly criticized dynamic pricing as unfair to fans. In their view, fans should pay similar prices for similar seats, not have costs fluctuate widely due to external factors.
There are a few key concerns from artist and fan perspectives:
- Unpredictable, rising prices – Fans can’t anticipate what ticket prices will be as shows approach, making budgeting difficult.
- Priced out fans – Big price hikes could make tickets unaffordable for some loyal fans.
- Backlash – Artists could face fan and media criticism for seeming greedy if dynamic pricing leads to very expensive tickets.
- Reselling disincentives – Big price differences between early and late ticket buyers incentivize reselling tickets at a higher markup.
These factors make dynamic pricing unappealing for some bands with a more fan-focused ethos.
Can artists opt out of dynamic pricing?
While some artists have tried avoiding Ticketmaster altogether to sidestep dynamic pricing, it’s very difficult for major touring artists to opt out of dynamic pricing completely when using Ticketmaster due to a confluence of industry factors.
Ticketmaster’s dominant position
As the dominant primary ticketing provider in the live events industry, Ticketmaster has enormous control. They are the exclusive ticketing provider for many major venues and live event companies.
Most big touring artists have to use Ticketmaster for a majority of their ticket sales simply because they have exclusive deals with so many venues. Trying to only play independent venues not affiliated with Ticketmaster is unrealistic for these artists.
Existing deals and contracts
Most artists are under contract with promoters like Live Nation that mandate Ticketmaster as the exclusive ticketing option. Renegotiating these deals just to avoid dynamic pricing is likely unrealistic in most cases.
Hard to enforce
Artists likely do not have enough leverage with Ticketmaster to enforce strict opt-outs from dynamic pricing. They may be able to discourage it or cap some price increases, but likely can’t evade it completely.
Ubiquity of demand-based pricing
Even if artists move away from Ticketmaster, other major ticketing companies like AXS and SeatGeek also utilize dynamic pricing. With demand-based pricing now ubiquitous in ticketing, opting out is impractical.
Counter-incentives for promoters
For promoters and venues, dynamic pricing offers revenue maximization, making them unlikely to discourage its use unless artists have massive leverage.
Predictive algorithms
Modern pricing algorithms are very sophisticated at anticipating demand even without direct sales data. Opting out of dynamic pricing may do little if algorithms still adjust prices up based on projected demand.
What steps can artists take?
While opting out of dynamic pricing completely islikely infeasible, artists do have some options to mitigate concerns:
Price caps
Artists may be able to negotiate price caps on the highest prices for ticket tiers with their promoter and Ticketing partners. This can prevent egregious $1,000+ tickets.
Fewer pricing tiers
Simpler pricing with fewer seating tiers can make pricing more consistent and predictable.
“Platinum” tickets
Separating out some front row tickets into “Platinum” tiers priced higher due to demand can keep more regular tickets at usual prices.
Fan presales
Allocating a block of tickets for fan presales before general public sales allows devoted fans first crack at regular prices.
Charity ticket auctions
Auctioning off select premium ticket packages for charity, as Pearl Jam has done, redirects some high-price purchases into charitable donations.
Venue deals
Booking smaller, independent venues when possible escapes Ticketmaster agreements at larger arenas and chains. But these sacrifices likely aren’t feasible for huge touring acts.
Speak out
Artists can publicly criticize and put pressure on the industry around issues like transparency, fees, and unfair practices.
Will dynamic pricing fall out of favor?
Despite artist criticisms, dynamic pricing likely isn’t going away anytime soon for a few reasons:
- Maximizes revenue for promoters and ticketing companies
- Helps balance supply and demand
- Data and algorithms enable demand prediction
- Prevalent across entertainment, travel, and retail sectors
For the live music industry, dynamic pricing generated over $1 billion in incremental revenue in 2019 according to research firm Hedgeye. Given the revenues involved, industry momentum makes abandoning the practice unlikely.
However, media and public pressure around issues like transparency, fees, and fairness may lead to some reforms around the edges:
- More pricing transparency for fans
- Caps on certain fees
- Restrictions on ticket holds for industry insiders
- Crackdown on scalper bots used unfairly scoop up tickets
While opting out of dynamic pricing altogether will remain challenging, artists do have opportunities to adapt strategies and speak out to make ticketing fairer for fans.
Conclusion
Dynamic pricing is now deeply embedded in the ticketing industry, making it virtually impossible for artists to opt out completely when using major providers like Ticketmaster. Massive venue and promoter deals give companies like Ticketmaster outsized influence over pricing models. However, artists are not powerless – they can negotiate caps, limit tiers, and speak publicly to advocate for fan-friendly reforms. With effort, balance is possible between fair access for artists and fans and the realities of modern ticketing.
Artist | Ticketing Approach |
---|---|
Bruce Springsteen | Publicly criticized dynamic pricing and discouraged it for his 2023 tour in talks with Ticketmaster. |
Pearl Jam | Uses Ticketmaster but has fought the company since the 90s over fees. Uses charity ticket auctions to redirect some premium ticket revenue to causes. |
Louis C.K. | Sells directly to fans from his website without any ticketing middlemen for flat per-ticket prices. |
Eric Church | Initially tried to avoid Ticketmaster but returned after failing to gain traction with his own system. Now uses Ticketmaster but with platinum tier pricing. |
Kid Rock | Uses dynamic pricing for his shows with caps at $225 to limit maximum ticket prices for fans. |