BERLIN – Dezember 2023
Dynamic pricing is an exciting and, at times, emotional topic that is increasingly gaining attention in the live entertainment industry worldwide. An exclusive industry survey conducted by leading B2B publication MusikWoche with various ticketing companies in Germany shows that opinions on the implementation of dynamic pricing are diverse.
ADVOCATES OF DYNAMIC PRICING
Some stakeholders in the industry support the introduction of dynamic pricing models and have been using modern pricing tools for years. These include companies such as Ticketmaster, a Live Nation company.
“Dynamic Pricing in its actual form has been present in the music industry for quite some time. Even though terms like ‘Dynamic Pricing’ or ‘Yield Management’ have not been consistently used in this industry, similar to the hotel industry or airlines, price management based on factors such as booking period, occupancy, and the like is increasingly gaining ground,” reports Norbert Stockmann, Managing Director (DACH Region) of Smart Pricer partner SecuTix.
Other providers are also showing interest in smart pricing, provided transparency and clear parameters are ensured. Supporters of dynamic pricing highlight the following benefits:
- Value for artists, ticket sellers, and event organizers: Support in the on-sale process and prevention of resale on the secondary market.
- Optimization of occupancy: Opportunity to optimize occupancy at small and medium-sized festivals, especially regarding catering revenues.
- Reward loyal fans: Possibility to reward fans with fair prices, especially if they are members and part of fan communities.
The benefits of dynamic pricing strategies are clearly demonstrated by the partnership between Smart Pricer and industry leaders such as SecuTix and mytic myticket AG. The advantages have already been demonstrated in successful projects such as EVZug (Icehockey, Switzerland) and Christmas Garden (DEAG Group).
“There are different approaches : From manual to fully automated pricing with predefined parameters, everything is possible today. We will apply dynamic pricing to selected events later this year and are convinced that this will create added value for ticket buyers, artists, and organizers,” adds Moritz Schwenkow, CEO of mytic myticket AG and CTTO DEAG.
THERE ARE ALSO SKEPTICS OF DYNAMIC PRICING
In the fragmented ticketing market, there are still a few skeptical voices that view dynamic pricing more as a selective supplementary component or as an auction model for specific ticket contingents
Negative examples (particularly from the USA) are also discussed within this sometimes emotional debate. Pioneers in the German market emphasize the necessary distinctions in the operational implementation of the pricing strategy:
“In the US, we have seen that dynamic pricing is only used in one direction, and that is upwards. Recent examples of this are the ticket sales for Beyoncé and Taylor Swift, where ticket prices have skyrocketed due to very high demand, causing discontent among artists and fans alike. The problem is who gets access to high demanded seats and dates. This is where dynamic pricing can be used to reward “real” fans with preferential access to tickets. ” Norbert Stockmann, Managing Director (DACH Region) SecuTix
“It is important in the implementation to find the right parameters to avoid negative examples that have occurred in recent months,” adds Moritz Schwenkow, CEO of mytic myticket AG and CTTO DEAG.
OTHER INDUSTRIES ARE PIONEERS
The forecasts for dynamic pricing in Germany indicate that it will become increasingly important, particularly for major concerts and renowned artists. A crucial step toward accepting this concept could be looking beyond the industry to gain valuable insights and address potential concerns.
Already established industries such as the airline, hotel and ski resorts sectors are pioneering the use of data and AI-supported measures to optimize pricing strategies and Attractions, Sport & Entertainment at Smart Pricer, reports: “We are pleased that the topic is currently the focus of the industry, and that we are able to advise numerous market participants on it. Overall, Smart Pricer is currently being used by a large number of customers in the ski, sports and attractions segments in the DACH region.”
Positive effects of our customers in the ski, sports and attractions segment who use dynamic pricing
Filippo Scanzano considers the application of these strategies in live entertainment to be extremely effective, especially due to current challenges such as inflation and rising costs. The focus is on differentiated pricing as an intelligent response to retain price-sensitive customers in the long term. He also emphasizes that smart pricing can have a strong influence on digitalization, depending on the industry. All of these aspects contribute to the successful establishment of the topic in the live entertainment sector in Germany.
Effective communication with fans plays an important role, says Christian Kluge, CEO and founder of Smart Pricer. The essential principles for implementation are as follows:
- Early bookers and customers booking during off-peak times pay less for their tickets.
- A portion of the tickets should always be cheaper at the start of sales than before the introduction of Dynamic Pricing, before prices dynamically increase.
- Establish minimum and maximum prices, as well as, depending on the industry, additional “business rules” as sensible guidelines.
- The introduction of flexible ticket prices should be communicated openly, easily understandable in FAQs, and employees should be informed and aware of this.
- Instead of rigid price lists, use “from-prices” or alternatively, completely get rid of with price lists on the homepage.
The widespread application of smart pricing in various sectors illustrates that it is not a new or untested concept, but is already being used successfully. Overall, a balance between maximizing sales and fair prices for consumers seems to be the key. The debate on dynamic pricing continues to be intense, and it remains to be seen how the industry in Germany will adapt in the future. However, this dynamic presents an opportunity to find innovative ways to increase the value of live events for all stakeholders.
If you have any further questions on this topic, please do not hesitate to contact us. Your opinion on dynamic pricing in the ticketing industry is important to us and we look forward to a lively exchange.