Menu
Opinion

Should I sell a mobile pass or take a pass? Pros and cons

Attendance at movie theaters fell 6 percent in 2017, and the majority of baseball games were played to less than 70 percent of capacity, indicating a significant number of empty seats. As sport and entertainment venues try to capitalize on the attention and wallets of millennials, the monthly pass has become en vogue for both entertainment and sports — primarily baseball. While it looks like some easy return on empty seats, that might not tell the entire story.

Both movie theaters and baseball stadiums are trying to fill a lot of inventory: 365 dates for movie theaters and 81 dates for baseball teams — thus selling a monthly pass enabling the buyer to attend all or a significant portion of the monthly dates. Most baseball teams do not include Opening Day or some key series that usually sell out. The teams (and theaters) are subscribing to the adage that the most expensive seat in the house is an empty seat — a position I have long advocated — but the pass concept has made me reconsider my position. In part, the pass programs rely on traditional subscription economics: More people pay than actually attend, thus there is money commonly referred to as “breakage.” There are little to no costs associated with breakage (not attending), the profit for the games not attended is 100 percent, and that looks pretty good considering it was an empty seat. 

Why will it work? Because millennials are familiar with subscription services through Netflix, Hulu, Amazon Prime and so forth. This concept for both baseball and the movies is right in line with that. The pass program doesn’t guarantee a seat location or in some cases even a seat. The St. Louis Cardinals pass is standing room only but “the Cardinals Ballpark Pass gives our fans another flexible and affordable option to take in a Cardinals game at their leisure,” said Joe Strohm, vice president of ticket sales. “We believe this ticket subscription service is a perfect fit for millennials and young professionals that may be a bit more spontaneous in planning their visits to Busch Stadium.”

The Cardinals, already with high attendance, use the pass for standing-room-only tickets.getty images

What are the objectives in offering such a subscription plan? 

1. Moving the millennials from the couch to the venue and experiencing the event live and with other people. Also, being exposed to the technology and entertainment aspects of the venues — and did I mention food and beverage? Those sales alone could make the pass an excellent investment in both baseball stadiums and theaters such as Studio Movie Grill, which offers in-seat dining services.

2. Spontaneity (not having to plan) can go as the spirit or friends or whatever moves them. In reality, the plan is the ultimate flex plan without having to choose games or price categories. 

3. Create repeat attenders. It is hoped that the consumer finds the experience worth repeating and worth sharing with others and worth recommending on social media.

Are there any risks?

I see several risks for the baseball teams and very few for the movie theaters. Movie theaters don’t offer a variety of pricing options on seats, so the goal is merely to increase frequency of attending and hopefully spending more on food and beverage. The same could be true for baseball, except that there are seating locations that are part of ticket plans and are significantly more expensive than the games offered through the mobile pass program. So much so that you can actually be selling against yourself and alienating your current traditional subscription base, especially if pass holders are moving around to various locations not comparable to what they paid.

For example, last year the Oakland A’s offered a mobile pass for $19.99 per month for games June through September. In June there were 15 games, making the actual cost per game $1.33. A visit to the Oakland A’s website would tell you that the monthly pass is usually cheaper than one single-game ticket. If I’m not guaranteed a specific seat but I’m only paying $1.33 for the same game that everyone else is watching it might be difficult to convince me that I need a guaranteed seat. I know that isn’t the case in the A’s current home and hopefully it will be the case in a new ballpark at some point in the future.

With the movie theater pass, the seat is guaranteed while with baseball it isn’t, but the size of the baseball stadium makes the likelihood of having a seat almost a certainty. The movie theater takes something that you are probably already doing in the comfort of your home and encourages you do it in a theater with upscale food and beverage and technological advances in sight and sound as well as the size of the picture. If two people each having the pass attend one movie in a month the net effect is a BOGO, the more they attend the better the deal. Perhaps they are coming and bringing others with them. The value in the opportunity to collect user profiles and behavioral data can never be underestimated and is at the core of these offerings as well.

But let’s get back to baseball, which can also take advantage of the food and beverage sales and the database-building opportunities. I like the Cardinals’ model because they have very high attendance to begin with, the ticket is SRO and it is also being used to promote auxiliary entertainment spaces as well. I am supportive of the A’s concept but not at $1.33 per game even in their overly large ballpark. So my advice would be that if you are selling a monthly pass and hoping at some point to move these new buyers into some type of guaranteed seats ticket plan, the gap between the average cost per game and the lowest available guaranteed seat location can’t resemble the Grand Canyon. Perhaps an adjustment is made in the monthly cost or there is a limit placed on the number of games — maybe up to 10 games per month for $39 — or less than $4 per game.

On the other hand, maybe it isn’t seats we should be focusing on, but space. More in March on this topic.

Bill Sutton (wsutton1@usf.edu) is the founding director of the sport and entertainment business management MBA at the University of South Florida and principal of Bill Sutton & Associates. Follow him on Twitter @Sutton_ImpactU.

SBJ Morning Buzzcast: March 19, 2024

PGA Tour/PIF inching closer? Another NWSL sale for a big return and MLB's Go Ahead Entry expands

ESPN’s Jay Bilas, BTN’s Meghan McKeown, and a deep dive into AppleTV+’s The Dynasty

On this week’s Sports Media Podcast from the New York Post and Sports Business Journal, ESPN’s Jay Bilas talks all things NCAA. Big Ten Network’s Meghan McKeown shares her insight into the Caitlin Clark craze. The Boston Globe’s Chad Finn chats all things Bean Town. And SBJ’s Xavier Hunter drops in to share his findings on how the NWSL is making a social media push.

Learn more about your ad choices. Visit megaphone.fm/adchoices

SBJ I Factor: Nana-Yaw Asamoah

SBJ I Factor features an interview with AMB Sports and Entertainment Chief Commercial Office Nana-Yaw Asamoah. Asamoah, who moved over to AMBSE last year after 14 years at the NFL, talks with SBJ’s Ben Fischer about how his role model parents and older sisters pushed him to shrive, how the power of lifelong learning fuels successful people, and why AMBSE was an opportunity he could not pass up. Asamoah is 2021 SBJ Forty Under 40 honoree. SBJ I Factor is a monthly podcast offering interviews with sports executives who have been recipients of one of the magazine’s awards.

Shareable URL copied to clipboard!

https://www.sportsbusinessjournal.com/Journal/Issues/2018/02/19/Opinion/SuttonImpact.aspx

Sorry, something went wrong with the copy but here is the link for you.

https://www.sportsbusinessjournal.com/Journal/Issues/2018/02/19/Opinion/SuttonImpact.aspx

CLOSE