Over the past several years, a number of teams have adopted something referred to as “dynamic pricing” or “variable pricing” when it comes to selling tickets. I have to admit that I didn’t even notice the change in pricing structure at first, since I have a partial year season ticket plan. Obviously, those prices are set and you don’t have to deal with buying tickets on a per-game basis. I’ve been hearing more and more complaints about dynamic pricing though, and I started to wonder if it was having a negative impact on attendance. To be honest, I can’t think of a way to know for certain that it’s harming attendance without interviewing thousands of people to see why they stopped coming to the ballpark. I do know of a number of people who have stopped attending games because of their annoyance and frustration with the dynamic pricing. I figured I’d look at the pros and cons of such a system and put the subject out there for discussion.
The concept of dynamic pricing actually started with the San Francisco Giants in 2009, and they modeled the concept off of airline ticket prices (because we all know how much everyone loves buying airline tickets). The idea is that games in high demand will cost more; games where there is less demand, the price will be lower. This could vary according to opponent, to the time of year (since April and May are typically low attendance months), and even the day of the week. The prices are fluid too, meaning that they could change several times leading up to your selected game. Since teams have to compete with the secondary market and ticket sellers like Stub Hub, they figure this is a good way to maximize their profits. It also encourages fans to purchase their tickets early, since the price will continue to rise as game day approaches, or it will push them toward purchasing a season ticket package.
There are obviously a number of positives if you look at this pricing structure from the Indians’ perspective. When the Giants first instituted the dynamic pricing in 2009, they made an additional $500,000 from ticket sales over past years. So this is obviously a way that the Indians can maximize their profits. It also pushes people toward purchasing their tickets earlier or toward season ticket packages. From a fan’s perspective, you may be able to get yourself a deal if you purchase early, or if you opt to go to a “less popular” matchup or a weeknight game. If it actually pushes fan toward early purchases, than that’s a bonus for the Indians – they have guaranteed attendance for those games.
The majority of the “cons” for this plan come from a fan perspective. First and foremost, I think it leads to some confusion. If you look at the “seating and pricing” section of Indians.com, it has a table full of different prices, depending on date and opponent. In the past, you’d go to that page and it would be just one price for all lower reserved, one price for all bleacher seats, etc. no matter the day of the week or the opponent. Fans always believe that bleacher seats are the cheapest; that you can get a bleacher seat for $10. The bleachers are now divided into “upper bleachers” and “lower bleachers” and only the “upper” seats remain at $10 across the board. The problem is that those $10 seats are now limited, and can be difficult to obtain. I know of someone who called a team shop and inquired about the availability of bleacher seats and the price – they were available and it would be $10 a piece. This person went to the team shop in person four hours after they called in order to purchase the tickets. By that point (just a few hours later) all of the $10 seats were sold out and the price had spiked. The person was frustrated and saw this as very confusing – the idea that prices can change in just a few short hours.
In an article from last June, Forbes questioned whether or not the dynamic pricing structure was hurting team attendance. The article cites a psychologist that claims people almost shut down and avoid making a decision when they have too many choices. His example is that if you give a person a choice between 175 salad dressings it will almost paralyze that person and leave them dissatisfied. I think a lot of times people select a specific game because they have some free time that day, or because of the opponent. There are probably a lot of people, especially if money is an issue, who instead search for the least expensive game/ticket. That is where the “salad dressing” theory would come into play – there are just too many options and people get confused and give up. The other point the Forbes article makes is that dynamic pricing shifts the burden from the teams to the fans/customers. Teams used to do all of the legwork in trying to decide how to properly price various sections and games. With the dynamic pricing, now the fans must decide how much is a “fair” rate and do the legwork to find the best pricing. I guess the idea behind this is that people are ultimately lazy and don’t want to go to the trouble. Or they feel like they’re being ripped off and get frustrated – the person I mentioned that tried to buy bleacher seats at a team shop? They left without purchasing tickets. It wasn’t even the fact that the tickets cost more and they couldn’t afford it; it was more that they were upset on principle. If there are more people like that out there, then you have something that could be negatively harming attendance.
To be completely honest, I’m not quite certain of my own opinion on this situation, primarily because I don’t have to worry about it. All of my tickets are already sitting in a drawer, ready to be torn out of a booklet and taken to a game. I do see both sides of the story here though – the Indians need to compete with the secondary market and make as much money as possible off of tickets. However, I think this can be confusing and annoying for fans, particularly when they’re used to something like “okay, tickets in this section cost $20,” since tickets in that section could now probably cost anywhere from $15 to $35. Just think about it – a ticket in the mezzanine section for Saturday, June 1 costs $31. On Sunday, June 2, that same ticket costs $19. Saturday is the coveted Albert Belle bobblehead giveaway, which means that tickets are going to be in higher demand. If you want that bobblehead, and you happen to be off work on Saturday, you probably are going to buy tickets, regardless of the fact that you could get them for less money on Sunday. The Indians are counting on this theory to maximize profits.
Edit: If you’re interested in reading more about dynamic pricing, check out this excellent piece by Wendy Thurm at Fangraphs.