9 Parusnikov | Stocks | Getty Images
Oxford University Press may crown ‘brain rot“Word of the Year, but”dynamic pricing“Also a top contender.
Dynamic pricing, originally proposed by economists in the late 1920s, refers to “the practice of changing the price of a product or service to reflect changing market conditions. In particular, charging higher prices when demand increases.” publishing house says on its website.
Many people associate it with changes in airfares or the way ride-hailing services Uber Adjust fares during busy times. However, by 2024, awareness of the practice has increased and controversy has increased, especially when purchasing highly sought-after items event tickets.
More from Personal Finance:
“I cry a lot, but I’m efficient, it’s an art”
Recession Pop: How Music Shapes Economic Trends
“I’m looking for someone to work in finance”
“In some high-profile cases, dynamic pricing has been used to set the price of concert tickets, resulting in fans (often reluctantly) paying very high prices to see their favorite artists. In some cases, Fans queued for hours in virtual queues before realizing how much they would be asked to pay, raising questions about the transparency of dynamic pricing practices and value for money,” Oxford said.
How and when artists use dynamic pricing
The conductor is Under investigation The UK recently used dynamic pricing in sales of British pop band Oasis’ reunion concert next year.
Many Oasis fans took to social media to complain that they ended up paying more than double the face value of their tickets without any warning. The band said it would give up This is a practice run for its North American tour.
Taylor Swift performs at Scottish Gas Murrayfield Stadium on June 7, 2024 in Edinburgh, Scotland. Swift’s Eras World Tour will include 15 shows in Scotland, Wales and England in June and August.
Gareth Cattermole/tas24 | Getty Images Entertainment | Getty Images
Taylor Swift She reportedly refused to dynamically price her Eras Tour tickets because “she didn’t want to do it to her fans,” Jay Marciano, chairman and CEO of AEG Presents, which promotes the event, told reporters Popular Daily Double October.
Also in the interview This fall, Cure frontman and guitarist Robert Smith said surge pricing was “driven by greed,” calling the practice a “scam.”
How and when to use dynamic pricing is determined at the discretion of the artist or management, often inadvertently, said Andrew Mall, associate professor of music at Northeastern University.
However, with so many high-profile tours recently, “there’s no question that dynamic pricing has become a concern for concertgoers,” he said.
“The Inevitability of Capitalism”
“We all know that if you’re looking for an Uber or a Lyft, there are certain times of the night that are more expensive. The market seems to have adapted to that,” said Joe Bennett, a forensic musicologist at the Berklee College of Music. “But concerts Tickets are generally fixed prices.”
Slowly, however, change is happening.
Whole 21Yingshi Over the past century, income from recorded music has dropped And revenue from live music events has risen. By the mid-2000s, concerts “provided performers with a larger revenue stream than record sales or publishing royalties,” economist Alan Krueger wrote in a report. Paper Economic issues and trends in the rock and roll industry. According to data, in 2023 alone, the revenue of the live music industry will increase by 25% politician.
In 2011, Ticketmaster debuted an early version of dynamic ticket pricing, which has now become the standard for live music ticket sales. Bennett said “ticket sales have been crazy” in recent years due to pent-up demand after the pandemic and a surge in superstar stadium tours.
“You can see why it’s tempting,” he said. “The live music industry is constantly keeping money at what fans are willing to pay. Dynamic pricing is somewhat of a capitalist necessity given the reach, but I don’t want to live in a world where my daughter’s price is $1,000. .
Nonetheless, ticket sales platforms now often charge more per ticket based on event demand at a given time—whether consumers like it or not.
“As you can imagine, it’s not very popular,” said Matt Schulz, chief credit analyst at LendingTree. “Businesses and musicians are trying to figure out what the market will bear, and it makes things very difficult for consumers.”
Chalk it up to “funflation”
Despite complaints, consumers have proven they have a high tolerance for the rising price tags of live events, also known as “inflation” Young people, especially Generation Z and Millennialshave proven they are even willing to go into debt to pursue some of these experiences, Recent reports show.
A recent survey shows that nearly two in five Gen Z and Millennial travelers spend up to $5,000 just on tickets to live events at their destination Bread Financial Research established.
“It’s important to know your limits,” Schultz said. “As much as you may love your favorite musicians, there should be a limit to how much debt you are willing to take on for them.”
Why dynamic pricing isn’t going away
“Consumers don’t like the idea of dynamic pricing, but in the past few years since the pandemic, a new ‘YOLO’ (you only live once) attitude has emerged and is increasingly pushing a reckless method when it comes to Bankrate.com financial analyst Greg McBride said:
Even with tight household budgets, “you’re going to have a situation where consumers are going to draw a line and say, this is not something I’m willing to give up,” he said.
Conductors are well aware of this mentality.
“Our research consistently tells us that concerts are the top priority for discretionary spending and one of the last experiences fans will cut back on,” Live Nation said in a statement. Quarterly Earnings Conference Call 2023.
But as consumers continue to go to great lengths to see their favorite artist or group, that means dynamic pricing is here to stay, at least for now.
“The live music community has long leaned toward this attitude,” Northeastern University Mall said.
