Braves Join New Trend in Ticketing: Dynamic Pricing
February 15, 2012
By Tim Tucker, Atlanta Journal Constitution
Over the long and winding course of a major league season, such variables as weather, pitching matchups and standings constantly alter the appeal of individual games, elevating some and diminishing others.
Increasingly, teams are seeking to reflect those day-to-day variations in ticket prices.
This year, at least a dozen MLB teams — including, for the first time, the Braves — will adjust prices up or down on at least some single-game tickets, based on market conditions in the weeks, days and even hours before a particular game.
It is called “dynamic pricing,” or “demand-based pricing,” and although long used in the airline industry, it is a significant change in the way baseball teams sell tickets.
Also adopted recently by some NBA and NHL teams, dynamic pricing was pioneered in baseball by the Giants, who tested it on 2,000 seats in 2009 and applied it to all single-game tickets the past two seasons. Other teams that used dynamic pricing to varying degrees last season included the Astros, Athletics, Cardinals, Twins and White Sox. Teams that will join the trend this year include the Braves, Brewers, Mariners, Mets, Padres and Pirates.
While at least five teams will apply dynamic pricing to all single-game tickets this season, the Braves will limit it to 8,000 outfield pavilion seats at Turner Field.
According to Braves executive vice president of sales and marketing Derek Schiller, the team’s goal is for the price on those seats to start at its likely low point for a particular game, thus encouraging early purchases, and possibly increase as the game draws nearer. However, the price could decrease if demand is unusually soft. In no case, the Braves said, will the price dip below what is charged in season-ticket packages, which are discounted vs. single-game prices.
“Dynamic pricing is something the sports industry is rapidly accepting,” Schiller said. “If this works here, I’d expect us to roll it out to more seats, and there is the chance long-term, whether that’s one or two or five years from now, the entire stadium might be demand-based. It’s too early to say.”
Braves fans, at least those interested in outfield seats, will be introduced to dynamic pricing when single-game tickets go on sale to the general public March 5. (Pre-sales will be held Feb. 24-28 for season-ticket holders and March 1-2 for those who register at braves.com/presale by Feb. 28.)
Teams see advantages on both ends of the dynamic-pricing spectrum. By lowering prices on games for which demand is soft, they aim to boost sales and attendance. By raising prices on high-demand games, they look to boost revenue.
Teams attribute the trend to advances in ticketing technology. Computer programs analyze the variables, assess shifting demand, guide the re-setting of prices and instantly execute changes.
“The first barrier was getting [the technology] in place,” said Dan Meehan, director of pricing and operations for Qcue, an Austin, Texas-based company that provides dynamic-pricing software. “The other barrier was the emotional piece. People had done things a particular way for a long time.”
Among the MLB teams that worked with Qcue last season, the average price change per ticket was an increase of $1.55, according to the company. Of tickets that went up in price, the average increase was $3.27. Of those going down, the average decrease was $13.63.
The most aggressive teams tend to adjust prices three or four times a week, Meehan said. Increases are much more common than decreases, and Meehan suggested that is in part because teams initially set prices “more conservatively” if they have the flexibility to raise them.
Bernie Mullin, chairman of The Aspire Group, an Atlanta-based sports marketing and management consultant firm, and a former MLB, NBA and NHL executive, said questions remain about the effectiveness of dynamic pricing in sports.
“There are cases where it has been demonstrated to generate additional revenue, and there are other cases where the results have not been convincing,” Mullin said. “But I think we’re going to continue to see movement in this direction.”
Dynamic pricing is the next step in the evolution of baseball’s ticket business. For many decades, teams generally charged the same price for the same seats at all games. But in the past decade, teams embraced “variable pricing,” typically charging more for the same seat at weekend games than at weeknight games.
The Braves went to two levels of pricing in 2004: “regular” prices for Sunday through Thursday games and “premium” for Friday and Saturday games. Last season, the Braves had three levels of pricing: the highest for Saturday games, next highest for Friday and Sunday games, and lowest for Monday through Thursday games.
While only their outfield pavilion seats will be dynamically priced this season, the Braves will expand from three to six levels of games in setting the fixed prices for all other seats, labeling games “A” (most expensive) through “F” (least expensive).
Generally, “A” games are Saturdays in June, July and August; “B” games are Saturdays in April, May and September; “C” games are Fridays and Sundays in June, July and August; “D” games are Fridays and Sundays in April, May and September; “E” games are Mondays through Thursdays in June, July and August; and “F” games are Mondays through Thursdays in April, May and September. There are a few exceptions, such as including the April 13 home opener against the Brewers and the June 11-13 weeknight series against the Yankees among “A” games.
Single-game prices, depending on seat location, will range from $13-$95 for “A” games to $6-$70 for “F” games, with “B” through “E” games falling progressively between those ranges.As for the outfield pavilion seats that are subject to price changes, the Braves set the starting points in a range from $35 for “A” games to $18 for “F” games.
Ticket re-sellers such as StubHub have made demand-driven pricing familiar to many fans, and MLB’s shift in that direction speaks to the influence of the secondary ticket market.
“What has become apparent is free-market economics have given the secondary market more opportunity to have flexibility in pricing than the primary market,” Schiller said. “Somewhat in response to that, having demand-based pricing allows us to more accurately reflect what the true value of the ticket is for any given game.”
For the full article, please click here