Ticketmaster and the Pitfalls of Dynamic Pricing

Fans worldwide are currently experiencing the effects of so-called dynamic pricing firsthand. This concept, particularly applied by Ticketmaster for ticket sales to major events like the recently announced Oasis reunion tour, has met with significant criticism. Dynamic pricing is a method where ticket prices are adjusted in real-time based on demand and other factors. This aims to ensure that the maximum market price is achieved. For fans, however, this often means substantial price fluctuations depending on when they purchase their tickets. A key factor influencing the price elasticity of demand for concert tickets is the exclusivity of the event. If a concert is particularly exclusive or a one-time occurrence, fans are generally willing to pay higher prices. The emotional attachment of fans to the band or artist also plays a crucial role. Two major factors influencing the pricing strategy for concert tickets are the popularity of the artist and the capacity of the venues. The more popular an artist is and the more limited the number of available seats, the higher the prices can be. In light of growing consumer outrage, potential government intervention is also coming into focus. The goal of such an intervention would be to regulate prices and thus protect consumers from excessive costs. However, this could significantly reduce the margins of companies like Ticketmaster and fundamentally change their business model.