Should Primary Ticket Sellers Use Dynamic Ticket Pricing?

Dynamic ticket pricing is a hot topic right now. Recent on-sales from Oasis and Green Day have added to the growing chorus of stories about fans unhappy about the dynamic pricing practices being used by Ticketmaster / Live Nation. Dynamic pricing is when prices for tickets can change as demand rises and falls, instead of always being set. Digital Music News says in their article that, “those (fans) wanting specific seats were gobsmacked with prices as high as $500 as Ticketmaster’s ‘In Demand’ pricing strikes again.” This is just a week after there were a litany of those same type of articles about the botched Oasis on-sale in the UK which is drawing scrutiny from government regulators across the pond.

The question at heart is whether primary ticketers (read: Ticketmaster) should be using dynamic pricing on these concerts? The answer depends on who you are trying to serve. From a purely economic standpoint dynamic pricing is a way for Ticketmaster to potentially capture more revenue for the promoters and artists of these shows. The problem with that is that fans are guaranteed to pay more for tickets. When the “face value” of a ticket is set at these much higher prices and then pushed even higher via dynamic pricing there is no way for a fan to escape these extremely high ticket prices. And ticket prices are much higher today as Pollstar reported earlier this year with their report that the average ticket price for a top 100 concert is 31% higher today than in 2018.

The argument Ticketmaster, and their head lobbyist Dan Wall, make is that the artists should have the right to choose. They say let the artists control the ticketing process and set whatever prices they desire because they make the art. A fair point, but where does that leave the fans? Their argument is that the secondary ticket market would drive up the ticket prices if they (the primary ticket seller) set the face value prices lowers. The problem with that argument is it dismisses the free market aspect of the secondary ticket market. It also completely misses the point that many fans would be able to purchase tickets at a more reasonable price if face values were set at less astronomical price. Further, if you set face value prices staggeringly high then the ticket prices do get listed for sale on the secondary market are going to reflect that same high price.

The secondary ticket market is not working in concert with each other like the promoter and Ticketmaster, so the price of a ticket is truly set based on the demand for a concert. Data released earlier this year said that 55% of secondary market tickets sold below face value in 2023, which netted fans a savings of over $440 million dollars on those tickets. That is reenforcing the free market aspect of the secondary market that a ticket cannot sell for more than a fan is willing to pay for it. If a fan does not like the price on our website for a ticket then they can choose not to buy today and wait to see if the price comes down. With hundreds of sellers (brokers, fans, etc.) listing tickets for sale on secondary market sites there is always going to be downward pressure on ticket prices as those sellers want to find a price point where their tickets will sell. That is what you want in a healthy free market, every seller competing to secure the business of those who want to buy. Ticketmaster has no competition when they are distributing tickets so there is no one else to potentially drive prices down.

We view the role of the primary ticket market as the distributor of the tickets. They set a fair price for the fans and distribute the tickets for the show. Where demand for a show is sufficient, to make sure that every seat at the venue gets sold which certainly adds to the robust experience of a packed audience at the event. To instead say they must price shows higher to eliminate the secondary ticket market really means they are just charging fans more and padding their own record profits.