First, a question for everyone… Do you think concert ticket prices are ‘too low’, ‘too high’, or ‘just right’? Going out on a limb here, we bet the biggest percentage of people selected that concert ticket prices are ‘too high’.
Example: Bruce Springsteen ticket prices were for sale for $5,000 and up. And that was if a buyer tried to purchase tickets directly on Ticketmaster.
Another example: Adele concert prices in Las Vegas started at $676 and went for $40,000 (for front row).
Ticketmaster, Live Nation, and StubHub now use “dynamic pricing” for concert tickets. This translates to prices fluctuating wildly; high demand equals high prices. These ticket hubs also have resellers who scoop up blocks of tickets and then resell those at a higher price, often using the original ticketing site to make the sale. The ticketing site earns commission from the double sale.
[Note: Ticketmaster release data that showed only 12% of tickets used dynamic pricing. Overall, only 18% of Springsteen’s U.S. tickets sold for under $100, and only 1% sold for more than $1,000.]
Regardless, buying concert tickets can be both confusing as well as expensive. When to buy? Where to buy? And if we can’t get tickets directly, what will a reseller charge for them?
What would you pay to see The Boss?
Group Activities and Discussion Questions:
- Pricing is a complex topic. Discuss the six steps for pricing (determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments).
- Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
- For Springsteen concert tickets (or any other entertainment), divide students into groups and have each group work on any/all of the six steps.
- When setting the price level, assign each team a different model to use (demand-oriented, cost- oriented, etc.).
- Debrief the exercise. Compare the various pricing models and discuss advantages/disadvantages of each.
- Optional: Have students examine the pricing policies on Ticketmaster, StubHub, SeatGeek, and Live Nation. (Note: Ticketmaster and Live Nation merged in 2010.)
Sources: Greene, A. and Millman, E. (2 August 2022). Springsteen fans raged over ticket prices. Experts say there’s no easy fix. Rolling Stone.; Lieber, R. (26 July 2022). The case of the $5,000 Springsteen tickets. New York Times.; other news sources.