From Forbes.com
Review by Courtney Hamner in KIN 501
The article “Is Dynamic Ticket Pricing Hurting MLB Attendance?” starts out by discussing the Yankee’s decrease in attendance. Their attendance is down 3.5 percent year-over-year. The Yankee’s are traditionally a standard bearer for sports franchises. This leads other MLB team managers to worry if the same is going to happen to them. The article discusses the possible reasons behind the decreased attendance of the economy, and bad on-field performance. The writer points out that these are just convenient excuses.
One of the main reasons the article points out is the use of Stub Hub. This is a secondary market for ticket sales. Stub Hub is dramatically undercutting the face value of tickets available on the official Yankee website or physical box office. According to Dead Spin, the more expensive the face value, the more likely it is going to be sold under face value. This causes the Yankees to underestimate the market. Another reason could be that the Yankee’s don’t use dynamic ticket sales. But as the article goes on it discusses how all MLB teams are struggling with attendance.
The writer says a number of things can be causing decreased ticket sales. But if we try and say the Yankees ticket sales and attendance numbers are caused by misreading the market or not using dynamic ticket sales, than what explains the other team’s decreases? The main focus is based around ticket sales being too confusing.
Dynamic ticket sales are full of flaws. The first flaw is that it offers too many choices. Yes, human beings love to have many options but when given too many options we are faced with not being able to make a choice. This leaves us feeling dissatisfied. Dynamic ticket pricing often includes a daily (sometimes hourly) fluctuation in price. The second flaw is pricing schemes often shift the burden of pricing decision and activity from the franchise to the fan. Fans are tasked with trying to determine what the right price for a ticket is. The last flaw the article discusses is that dynamic ticket pricing may tax franchise personnel more than establishing ticket prices in the off-season and sticking with them for the 162-game slate.
I feel that these factors can be attributed to decreased attendance. I think that dynamic ticket sales can change the pricing of tickets so much that fans wonder if they really are getting a good deal. But at the same time I think that dynamic ticket sales have a lot of positive attributes as well. Dynamic ticket sales help in a bad economy by offering prices that fans can afford. Yes, ticket prices may change frequently, but they change within the level of demand, type of customer, and weather. Therefore, the customer is being put first. Although ticket sales are getting very confusing, I think that it is not the main culprit for decreased attendance. I think that the economy and a bad on-field performance are convenient but very true excuses for poor attendance. Not just one factor can be given for the decreased attendance this year.
I don't think the dynamic pricing of mlb tickets should hurt attendance. If anything, it should make fans try to get their tickets sooner. They shouldn't try to put it off, even for a second, to get them. It helps the teams to prepare as fast as they possibly can, and possibly get them in sooner.
ReplyDeleteThanks for the comment. As with most change, I think it will take a short while for consumers to get used to this new model. However, any one who has purchased airline tickets or from StubHub are already familiar with dynamic ticketing.
ReplyDeleteI agree that dynamic pricing is not the cause of decreased attendance. However, I'm not sure dynamic pricing should make fans want to buy sooner. On Stubhub tickets will drop as the game gets closer because those buyers don't want to have unsold tickets. It is like Southwest Airlines dropping flight prices if they have open seats. The team shouldn't worry about Stubhub tickets because they have already sold the ticket for their price, although, if they aren't sold online it can affect attendance.
ReplyDeleteOverall, I personally think that decreased attendance in sports has multiple reasons behind it, but two stick out to me when talking to sports fans. 1) The ticket is affordable according to many customers, but it is the concessions and parking that make it a bad deal. 2) The improvement of television has made fans enjoy the experience of watching at home much more, and they can enjoy more refreshments because it is more affordable.
Ex: I go to a Detroit Tigers game, and on Stubhub I buy a ticket for $5 (and that is in the upper deck). Parking is $20, added on is the gas for me to get there; which for me is $30 more driving there and back. I like to have a few drinks, some water, hotdog, and peanuts when I go to a baseball game. Two drinks+one water+one hotdog+bag of peanuts=right around $35 in Detroit for the cheapest options. Add in the fact that on the way home I grab dinner at McDonald's for $5. Remember this is just for one person and the total is $95. Now imagine a family of four trying to go; even without the drinks you are looking at $150 (that may be generous). I can watch the same game from a better view at the comfort of my home with a six pack, peanuts, and a burger for $12 probably.
Selling the experience doesn't help anymore partially because of the improvement of technology; but if concessions and add-on items where more affordable then selling the experience may have more clout. As an aspiring sports business professional I hope executives start seeing that just making parking and concessions more affordable will drastically impact attendance in my opinion. They need to realize that all those sponsorship revenues are dependent on not just who is watching on TV but also how well the game is attended in the long run. Hopefully this trend can get turned around soon.