In this provocative new paper, Tim Baker, Director and Principal at Baker Richards, summarises the key issues, and invites your views in a new survey on dynamic pricing. Tim will present the responses at ETT – Europe Talks Tickets conference in Amsterdam in November.
Photo by Craig Murphy used under Creative Commons
Is dynamic pricing maturing?
Might ‘dynamic pricing’ be coming of age in the cultural sector? There is plenty of relevant evidence about implementation and impact in the US across a wide range of commercial and not for profit organisations, and growing adoption now in the UK and Europe. Is it time to learn and understand from that experience?
Sometimes just talking about ‘dynamic pricing’ as a concept gets an almost visceral reaction, as if it was somehow immoral. Yet the arts and entertainment industry and many sporting fixtures have been premium pricing, packaging and discounting for decades, and they are all tools in dynamic pricing. Dynamic Pricing is probably not right for all cultural organisations but it does potentially have an increasingly important role to play in helping to maximise income and optimise volume of ticket sales, especially in a world where many are seeking ways to replace declining public subsidy.
Is ‘dynamic pricing’ immoral?
Is this question only coming now because the funding cuts from austerity force a greater emphasis on earned income, and we worry about changing our sales policies and adopting hard commercial techniques? The argument is specious. We have been willing to upset advance bookers for years, reducing prices after they have booked, charging different prices through different channels, with different booking fees, and for high demand events we have offered premium seats and tolerated the secondary market. Dynamic pricing could be said to retain the income margin the scalpers otherwise take. And we all know venues where clever Box Office Managers have always moved price breaks and tweaked seating plans in the light of demand for seats.