Dynamic pricing in the ticketing sector is very much in the spotlight following the rush to get tickets for the big Oasis reunion over the weekend, which saw lengthy online queues with many fans losing out after they were incorrectly identified as bots, and others facing unexpectedly high prices when they finally reached the checkout.
The UK’s Advertising Standards Authority says it has received more than 450 complaints about how ticket prices for the shows were communicated and the government has said concerns about dynamic pricing will now be included in a planned review of the ticketing sector.
Culture Secretary Lisa Nandy said in a statement, “After the incredible news of Oasis’s return, it’s depressing to see vastly inflated prices excluding ordinary fans from having a chance of enjoying their favourite band live”.
“This government is committed to putting fans back at the heart of music”, she added. “So we will include issues around the transparency and use of dynamic pricing, including the technology around queuing systems which incentivise it, in our forthcoming consultation on consumer protections for ticket resales. Working with artists, industry and fans we can create a fairer system that ends the scourge of touts, rip-off resales and ensures tickets at fair prices”.
With dynamic pricing, the cost of tickets for in-demand shows goes up and down with demand, in much the same way as airplane tickets and hotel bookings. It means that, as demand surges, fans face ticket costs considerably higher than the baseline price.
This approach to ticket pricing, pioneered in particular by Live Nation and its Ticketmaster business, isn’t new, and has caused controversy before. Although the criticism this time has been particularly newsworthy.
The government’s consultation on ticketing was announced last month and was expected to focus on ticket touting, the Labour Party having committed to introducing a price-cap on ticket resale ahead of this year’s General Election.
Critics of dynamic pricing will welcome its inclusion in the consultation. However, it could prove a distraction that further delays the introduction of a price cap on ticket resale. Certainly those involved in secondary ticketing have often attempted to use frustrations with primary ticketing as a distraction tactic whenever touting is in the political spotlight.
Nevertheless, anti-touting campaigners FanFair have welcomed the widening of the government’s ticketing consultation.
Campaign Manager Adam Webb told CMU, “It's really welcome news to see the government announce an extension of their consultation into ticket resale, and that they'll now also be looking at areas including dynamic pricing, technology and queuing systems”.
The FanFair Alliance, he added, “is focussed on preventing ticket touting, and ensuring fans are not ripped off by unscrupulous traders operating on unauthorised resale websites, however the lack of transparency in live music overall is increasingly problematic. This is an opportune moment to look at the market overall”.
The dynamic pricing debate - and where it fits in
The debate around dynamic pricing is distinct from the debate around ticketing touting, although the two things are connected.
The fact that tickets for in-demand events often sell on resale platforms for vastly more than the face value was one of the motivations for promoters and ticketing companies - and especially Live Nation and Ticketmaster - to develop a more flexible system for setting the price of tickets.
Dynamic pricing is also relevant to the music industry’s campaign against ticket touting. Those speaking out in favour of ticket touts and the ticket resale platforms they use, like StubHub and Viagogo, have often honed in on frustrations with the way primary ticketing platforms work in a bid to distract attention away from touting and the secondary ticketing market.
The unpopularity of dynamic pricing is particularly useful when the touts are employing that tactic. After all, one argument against touting is that fans end up paying vastly more than the face value of a ticket in order to see their favourite artist perform. The touts would argue that, if the live industry shuts down the resale platforms but then applies dynamic pricing to all its in-demand shows, fans won't actually be any better off.
Supporters of dynamic pricing will counter that, when demand causes ticket prices to increase, it is surely better that the artist and the promoter of the show benefit from that price surge rather than a tout who contributed nothing to the show.
Which is true. Promoters usually offer artists a share of the box office with a fixed guarantee, meaning the artist does benefit from dynamic pricing. However, one of the key arguments in favour of better regulating ticket touting is that the fans will be better off.
It is usually Ticketmaster that powers dynamic pricing. When criticised, it stresses that it is the promoter and the artist that choose how to price each show. As Live Nation is often also the promoter - it’s co-promoter on the Oasis shows with SJM - the blame often ultimately ends up with the artist.
Artists and managers often aren’t that hands-on involved in the pricing and sale of tickets, although could probably insist that dynamic pricing is not employed when negotiating their deals with promoters. Although doing so would hit the profitability of the shows and the size of any advance.
The government’s consultation should try to get to grips with how these decisions are commonly made, and to what extent dynamic pricing is a useful tool to maximise return in the risky business of tour promotion, and to what extent it’s just superstars and their promoters getting greedy.
The consultation will also likely look at how dynamic ticketing is communicated and explained to fans, with confusion around the pricing of the Oasis shows the subject of many of the complaints made to the Advertising Standards Authority this weekend. Even those who are sympathetic to dynamic pricing might agree that more transparency would be a good thing.