Variable or dynamic, ticket pricing gets fresh look from teams
Published March 8, 2010
The Phoenix Suns hope a change in their method of pricing season tickets will help boost sales for individual games. Rather than give every game on a season ticket the same face value, the team will vary the price by game for the first time next season.
The Suns have used such variable pricing in their single-game sales for years. The move to season tickets follows a trend that other NBA teams have adopted this season, league officials said.
The team spoke about the change during the fifth annual Tickets.com Executive Summit, which recently drew about 70 attendees from teams, leagues, facilities and vendors tied to the ticketing industry. Some clubs, such as the Suns, are not Tickets.com clients.
To be clear, the Suns are not raising season-ticket prices for 2010-11, said John Walker, the team’s senior vice president of business development. A season ticket valued at $100 a seat for 44 games in 2009-10 will still cost $4,400.
But the face value for each game at US Airways Center will fluctuate depending on several factors, including the opponent, day of the week and past sales history, Walker said. A marquee Saturday night game against the Lakers could be priced above that figure, and a Tuesday night game against the Bucks well below.
By dropping the face value of that ticket against Milwaukee to a single-game price of $50, the Suns would have a better chance of selling it for $60 at the box office on game day, compared with struggling to sell it for the current $100 face price to protect season-ticket holders, he said.
Variably pricing season tickets also provides a more accurate starting point for secondary market activity, Walker thinks.
Season-ticket holders told Walker they essentially can’t give away tickets for less attractive games and are selling them for as little as $10 on Ticketmaster’s TicketExchange, the team’s official online reseller. “They feel like they’re really taking it in the shorts,” he said.
“If that game was more accurately priced in the beginning at $30 or $40, then backing off of that from the secondary perspective is not quite as painful.”
DYNAMICALLY SPEAKING: The Suns, in addition to variably pricing season tickets, are among several teams considering going one step further by establishing dynamic pricing for single games. In a texting poll, 67 percent of attendees said they plan to implement dynamic pricing in 2010.
Dynamic pricing uses mathematical formulas to adjust single-game ticket prices as late as the day of the game. Software developers Qcue and Digonex, which both have deals for dynamic-pricing programs at the big league level, had officials discussing market pricing at the summit.
Qcue, after doing deals with the San Francisco Giants and Dallas Stars in 2009, has signed the Cleveland Indians for 2010 and is talking with International Speedway Corp. about using one of its NASCAR tracks as a test case this season. Chicagoland Speedway and Kansas Speedway, two ISC properties, are both Tickets.com clients, as are the Giants and Stars.
ISC spokesman Lenny Santiago said last week the company was not ready to announce a dynamic pricing deal and was pursuing several pricing strategies across its 13 facilities. ISC has already adjusted prices on more than 575,000 tickets for 2010, Santiago said.
Digonex has partnered with the Cleveland Cavaliers on dynamic pricing and has another deal pending with a second NBA team, said Jeff Eglen, Digonex’s vice president of strategy. The Cavs use Veritix, a company owned by Cavs owner Dan Gilbert, for ticketing.
The Suns, after a five-year run of sellouts and NBA playoff appearances, did not make the postseason last year and renewed 60 percent of season-ticket accounts for this season, leaving up to 5,000 seats available for every game.
“Our season-ticket holders are paying an inordinate amount of money and I don’t really want to piss them off by lowering prices,” Walker said. “At the same time, we still do have high-demand games, where we can double and triple prices and people will still pay it.”
The Suns hope to review proposals from Qcue and Digonex in the next three months and make a decision by June 1.
PRICE CHECK: All eyes are on the Giants, the first major league team to dynamically price every seat at their facility, 41,914-seat AT&T Park. The club is expanding its program to cover the whole ballpark after using Qcue to adjust ticket prices for about 2,000 outfield and upper-deck seats in 2009.
Taking a peek at SFGiants.com about one month before Opening Day, the pricing chart reveals a mind-boggling 1,680 prices for 84 games. Messages inform fans that market pricing applies to all tickets and that they should buy early to lock in their price and location.
“We’re not done,” said Russ Stanley, the Giants’ managing vice president of ticket services and client relations. “What you see a month from now will be a lot different. We just wanted to give fans a chance to see what prices will look like.”
By Opening Day, the site will be fully developed to the point that when fans click to buy tickets, the game they choose will pop up as well as the three games before and after the date they choose, similar to the airline ticketing model, Stanley said.
Qcue CEO Barry Kahn said, “Unfortunately, the industry has spent a long time pretending that people don’t look at prices when they buy tickets.”
“So we’re trying to find a way to provide them this information and let them know the decisions they can make: For the same price, they can now get bleachers for the Red Sox game or club level for the Orioles,” he said. “That’s a powerful choice. Now we just need a better way to communicate it.”
Don Muret can be reached at firstname.lastname@example.org. Follow him on Twitter @breakground.