In the last few years, particularly stemming from 2017, dynamic pricing in sports has shifted the climate with which we view and perceive the demand for the sports industry. This new method of pricing has not only altered the way that tickets are priced, but also how each fan experiences the sporting event. Dynamic pricing adjusts the ticket price based on value-added factors such as the demand for an event, the time of day that the event occurs, and how well the event or game can be viewed from a particular seat or section in the stadium. Unlike static pricing that stemmed directly from the venue, dynamic pricing allows for a more adjustable experience for each fan. Also, this system allows for the entrance of third-party apps such as Gametime and Ticket Master to offer tickets to the game up until the minute before it starts. Therefore, the timing with which tickets are bought also matters in terms of the purchase price that any given fan incurs.
Dynamic pricing benefits both the consumer and the organization as ticket prices are based on demand for the sporting event. This maximizes revenue for the organization which also allows for the teams to generate more revenue throughout the season. Also, this ensures that the stadium is at, or close to maximum occupancy as games that are not popular will cost significantly less than those that are popular, so the low price will attract individuals who cannot afford to go to high demand games. Therefore, this increases fan engagement as it provides options throughout the year for their fans that better fit their financial situation. By ensuring that seats are filled and fans are engaged through dynamic pricing, the organization ends up increasing profits through a loyal fan base.
As mentioned above, fans also benefit from a dynamic pricing structure as it increases accessibility and affordability throughout the year as it gives individuals with lower disposable income the ability to come to a game that is not as popular as one that they could not afford. Thus, giving the consumer greater options when deciding to purchase a ticket to a sporting event. This also adds to the final experience a fan can have at the sporting event as one is able to purchase a ticket from a third party just minutes prior to tip-off, so it allows individuals to go to events on a whim while also finding a ticket that suits their demand in terms of location of seats and view of the event.
Drawbacks of dynamic pricing involve finding a balance between revenue and affordability. Depending on the game, third-party ticket sellers can markup a ticket price to north of 400% which then greatly limits the possibilities of who can buy the ticket. This often results in wealthy individuals attending the games as opposed to die-hard fans. However, through the use of data analytics, dynamic pricing will undergo changes that benefit the consumer and organization alike as fan engagement will be more easily monitored both through social media and fan experience. Furthermore, organizations will always want to ensure that seats are occupied both for sponsors as well as for viewers watching at home. Therefore, organizations will make changes to their dynamic pricing strategies in order to accommodate fans while also generating profit, but this will be interesting in years to come as third-party apps continue to expand and change the market.
Why the Prices of Sports Tickets Vary So Much (investopedia.com)
How Dynamic Pricing Is Changing Sports Ticketing – ACCESS (intix.org)
Dynamic Pricing: The Future of Ticket Pricing in Sports (forbes.com)