SF Giants Test Dynamic Ticket Pricing

from the one-day-sale dept

The San Francisco Giants are experimenting with software that dynamically prices baseball tickets, adjusting prices based on demand, weather, and even other factors like who's scheduled to pitch on a particular day. Many teams already charge different prices for seats based on the opponent or other factors, but the Giants are trying to manage ticket revenue much like airlines and hotels price their products: charging a premium for in-demand seats, but lowering prices when necessary in an attempt to fill available space. For instance, in a recent series against the Mets, some bleacher seats that regularly go for $17 each varied in price from $15 to $33, depending on the weather and pitching matchups. So far, the Giants are testing the system on just 2,000 outfield seats in their 41,000-seat stadium, wary of upsetting season-ticket holders by offering similar seats to other buyers at lower prices. They say so far, they've increased sales in those seats by 17 percent over last year, but it's too early to tell if that's solely because of the pricing system. On one hand, it's easy to see some people getting upset by the system, but on the other, a case can be made that the seats offer different levels of value on different days, and should be priced accordingly. It's essentially the same system, just a little more scientific, as that used by scalpers, and they find no shortage of willing buyers. If the Giants have a lot of success with their efforts, look for similar systems to quickly catch on with other sports teams.


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  1.  
    identicon
    Luc Boardwalk, May 20th, 2009 @ 10:56pm

    Options

    The Giants could take this idea a step further by offering options on prime seats. Instead of buying a full season ticket outright, a fan could buy first right of refusal. The buyer could be required to opt in or out within a set timeframe before first pitch. If the option is surrendered, the team can keep the option fee and sell the ticket at market value.

    Now if we can just figure out a way to securitize those options...

     

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  2.  
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    mojo, May 21st, 2009 @ 1:34am

    Movie theaters should adopt this system and base movie ticket prices on how good the reviews are of the film! We might actually see Hollywood put some effort into making good movies...

    But as far as sports tickets go, ticket prices are high enough as it is. It would suck to gouge fans even more by charging higher prices for the games (and players) people want to see more.

    Once again, we see how it's not good enough to make a huge profit, they have to find ways to make a GINORMOUS profit.

     

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  3.  
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    Jeff, May 21st, 2009 @ 3:21am

    Speaking of Ginormous Profit, Beyonce is scheduled to perform here in Vegas at the Wynn Encore sometime in the summer. Its hyped up to be an intimate performance with a max seating of 1500 seats. Wynn is selling tickets bundled with room reservations, he only set aside a handful of ticket only sales. The cheapest ticket is $450, in a town clamoring for tourists, this isn't the way to go.

     

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  4.  
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    Rob (profile), May 21st, 2009 @ 4:32am

    "some bleacher seats that regularly go for $17 each varied in price from $15 to $33" -- This is my biggest gripe with variable pricing right here, the new improved variable prices range from a whopping $2 off normal ticket price, to almost double the normal price. To be fair, nothing is said of how often the ticket prices are lowered rather than raised, but I have a sneaking suspicion that the average ticket price this year will be a bit higher than it was last year.

    "Variable pricing" really is quite often just a sneaky way to raise prices without raising quite as many eyebrows. The iTunes store is a perfect example of this -- they went from $0.99 a song for EVERY song in the store, to $1.29 for premium tracks and $0.69 for less in demand tracks. This sounds great on paper, until you realize that almost anything you would want to buy is going to be $1.29, so they just effectively raised their prices by very close to a third, while being able to avoid a bit of heat from the press and the loss of too many customers.

     

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  5.  
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    Anonymous Coward, May 21st, 2009 @ 4:46am

    it doesn't matter what baseball teams do, 70% of the seats will be empty most of the time. It isn't unusual for teams to play weekday games in front of "crowds" around the 10,000 mark.

    The supply far outweighs demand. At $15, a bleacher seat on a monday night game is still massively overpriced. try $5, they might see a few more people in the seats (buying popcorn, hot dogs, beer, and whatnot). heck, use the Mike model, seats are almost infinite, so why not give them away for free with the pre-purchase of a hot dog, chips and a drink for each seat?

     

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  6.  
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    Ima Fish, May 21st, 2009 @ 5:22am

    "wary of upsetting season-ticket holders by offering similar seats to other buyers at lower prices"

    This happens on every flight and the airlines seem to survive.

     

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  7.  
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    Anonymous Coward, May 21st, 2009 @ 5:24am

    Yes, this will certainly help increase attendance of the games. Another thing that would help draw a larger crowd would be to charge more for parking. Vendors could also charge more for a hotdog and beer.

     

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  8.  
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    Ima Fish, May 21st, 2009 @ 5:27am

    Re:

    "This is my biggest gripe with variable pricing right here... I have a sneaking suspicion that the average ticket price this year will be a bit higher than it was last year"

    You have no concept of how markets work. If ticket prices rise and people pay those higher prices, that new higher price is the correct price. There is nothing unfair about selling your product or service at a price someone is willing to pay.

    Let's assume you're selling a used car at an asking price of $9,000. Two people show up, one willing to pay the asking price and one willing to go higher. Of course you sell to the guy willing to go higher. And that's completely fair. That's how capitalism is supposed to work.

     

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  9.  
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    Ima Fish, May 21st, 2009 @ 5:42am

    Re:

    "try $5"

    The reason they don't sell $5 tickets is because it would lower all the ticket prices throughout the entire stadium. Sure, more tickets would be sold, but over all less money would come in.

    Here's an example. Let's assume that tickets sell for $75, $50, $25, and $17. If the $17 cheap ticket suddenly were only $5. Then a lot of the people paying for the $25 and and even the $50 tickets would buy the $5 tickets, because the saving would be substantial. There's not much difference between $25 and $17, but there's a huge savings between $25 and $5. Especially if you're bringing your entire family.

    Because fewer people would be buying $25 tickets, those seat prices would have to be lowered to increase demand. Which would mean that people buying $50 tickets would by those new cheaper seats. Which means that fewer people would be buying the $50 tickets. Which means those tickets would have to be lowered to increase demand.

    Pretty soon even the prices on the boxed seats would have to be lowered.

    Baseball stadiums would rather have a fewer number of high paying customers than a large number of lower paying customers.

    To me it's a good short term goal, but new fans have to come from somewhere. And if an entire generation of boys grow up never going to a baseball game, it's unlikely they'll be fans when they grow up. Basically MLB is pricing out future fans.

     

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  10.  
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    Davis Freeberg, May 21st, 2009 @ 7:22am

    Dutch Auction

    If it was up to me, all of the seats would be priced the same, but would go down in price each day (and availability) until every game gets sold out. Those who scoop in early for premium spots will pay more while freeloaders could step in and see a game on the cheap in the bleacher seats. It probably wouldn't maximize the revenue they could get, but it would do great things for the concession sales and the large crowds would energize the team for the entire season.

     

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  11.  
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    Ima Fish, May 21st, 2009 @ 7:30am

    "If it was up to me, all of the seats would be priced the same, but would go down in price each day (and availability) until every game gets sold out"

    That might actually work. There would still be an incentive for people to quickly buy the better seats at a higher price while leaving plenty of cheap seats for everyone else.

     

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  12.  
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    ChrisB, May 21st, 2009 @ 7:38am

    Re: Re:

    I totally agree. Event ticket sales is one of the only area where scalping exist, and the ONLY reason it exists is because it isn't a free market system. If every seat for a baseball/concert/play/etc. was sold on Ebay, EVERY SINGLE SCALPER WOULD DISAPPEAR! The free market works, if you let it.

     

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  13.  
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    Joe in NYC, May 21st, 2009 @ 8:41am

    Except for Boston which regularly sells out home games, this is a GREAT idea. Ticket prices have gone through the roof (Yankees, Mets) and with the advent of HDTV, alot of fans would rather stay home.

     

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  14.  
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    kawai, May 21st, 2009 @ 9:27am

    Re:

    @Mojo-

    Had the same thought regarding pricing movies based on reviews (or, even length of movie - a 3 hour movie can get less showings than a 90 minute one).

    But, if a movie is priced at $1, is the cheapness going to outweigh the foreknowledge that everyone thinks the movie isn't worth your time? Hard to say-- for a sporting event, it's different. Enough to do at a ballpark outside of watching the game, and weather, bad pitching matchups, bad teams can't always predict accurately how good the game will be.

     

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  15.  
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    Stephen S. Power, May 21st, 2009 @ 11:40am

    zito

    buy your tix to see zito now before they go up. he's back!

     

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  16.  
    identicon
    Acai, May 21st, 2009 @ 12:39pm

    To be fair, nothing is said of how often the ticket prices are lowered rather than raised, but I have a sneaking suspicion that the average ticket price this year will be a bit higher than it was last year.

     

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  17.  
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    nasch, May 22nd, 2009 @ 12:46pm

    Re: Re:

    Don't worry, they'll never be $1. The crappy movies will still be $9, and the good ones will be $15-30.

    Only half kidding.

     

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  18.  
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    Anonymous Coward, May 27th, 2009 @ 11:34am

    This kind of fluidity makes me hesitate to make a purchase.

     

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  19.  
    identicon
    Marketing Strategy, Sep 29th, 2010 @ 2:55am

    Good topic

    Excellently written article, if only all bloggers offered the same content as you, the internet would be a much better place. Please keep it up! Cheers.

     

    reply to this | link to this | view in thread ]

  20.  
    identicon
    Innovative Healthcare, Sep 29th, 2010 @ 2:58am

    Nice topic

    Nice topic...ill recommend this blog to my friends

     

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