Arts organizations are working under very difficult circumstances. The Centre for Cultural Value’s Culture in Crisis report illustrates how the UK’s cultural sector is “facing imminent burnout alongside significant skills and workforce gaps.” These gaps are leaving a workforce that is not representative of our society, and also exhausted teams who are not equipped for everything being thrown at them. There is simply not enough human resource to execute everything and so teams need smarter tools and processes that can help them. It’s absolutely natural to have a knee-jerk reaction to implementing anything new when you’re burned out and simply battling to put out fires every day. But taking a moment to implement time and cost-saving tools can help to fight those fires at their source so that there are fewer to deal with each day.

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“I’m too busy to implement a complex new pricing tool”

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With modern software and data analytics tools, dynamic pricing is accessible to any team, however busy, thanks to automation. DynamO developed a very straightforward and easy-to-use interface and provides free support and assistance. Setting up the dynamic pricing parameters for a typical theatre performance (3-5 different ticket categories) takes 2-5 minutes for our clients. Even very small theatres and music groups with only 1 person managing ticketing are achieving great results using DynamO.

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“We have lots of one-night shows and we don’t have autonomy on price-setting (we have to set prices in line with promoters / producers), so dynamic pricing can’t work for us”

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Dynamic pricing can be applied to a wide range of events, including one-time performances, festivals, sports events, and more. Predicting the success of a one-time event can be very tricky as success depends on multiple variables: big names, promotion partners etc. However, dynamic pricing actually helps to mitigate the risk associated with one-off shows or short runs. Over time it becomes a highly effective tool to support performance lifecycle evaluation and decision-making.

When first implementing dynamic pricing you can talk to your partners about whether they want to do it or not, and if not you don’t have to dynamically price their shows. Once you have dynamically priced a few shows you can show them the data to evidence the potential ROI they are missing out on and they will likely choose to participate, as we’ve seen with numerous clients in this position.

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“If the prices are always changing how can I forecast accurately?”

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Forecasting is always an educated guess about the future. With dynamic pricing, forecasting is actually more reliable than with fixed / static pricing, because it reacts to market fluctuations and generates additional yield on popular shows while boosting audiences at less popular performances / events. Ticketing managers can predict based on their past experience as they usually would. The only change they need to make is that they should expect better results both in revenue and tickets sold than ever before. A typical DynamO client generates 14-17% average revenue growth while reducing unsold inventory by over 20%.

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“We often have to paper / discount heavily at the last minute to fill a show, dynamic pricing will only exacerbate this late booking behavior - we want to encourage early bookers!”

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Dynamic pricing can help encourage early booking and aid in avoiding last minute discounts to fill an event. In many cases prices increase as the event date approaches and availability decreases. There are many logics that can be applied in dynamic pricing and it’s never guaranteed that tickets will be cheapest at the beginning of the sales period, or at the end of it, or anytime in between! While it can provide a kind of gamification opportunity to ticket buyers, there is not a simple and consistent rule that they can follow. With dynamic pricing they can’t just wait and be guaranteed a cheap ticket.

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“As a not-for-profit organization, I don’t think it’s a good fit - dynamic pricing is designed for profit-making companies.”

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All kinds of cultural institutions can benefit from dynamic pricing. Optimizing ticket sales allows you to break down cost barriers across your programming and reach a wider audience, while ensuring financial sustainability. Dynamic pricing strengthens any mission-focused organization’s pricing strategy. It can result in wider availability of cheaper tickets and longer periods of availability for high-demand performances. Organizations such as the Hungarian State Opera, Operetta Theatre, and Palace of Arts have demonstrated how beneficial this approach can be. With the additional revenue generated, these institutions can further improve service quality and invest more in their artists, creating a positive social impact.

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“Ticket buyers don’t want another layer confusing them - it’ll stop them from completing their purchase”

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• While dynamic pricing does introduce a variable, it doesn't need to complicate the process or slow down purchasing. Some people check the prices more than once before deciding on whether to buy the ticket or not, but the process itself is the same.
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• At DynamO re-pricing frequency can be set by the ticket inventory holder (organizer’s / venue’s ticketing team) and can vary between approximately 15 minutes up to days. More frequent price updates result in smaller changes in prices which means that most individual customers don’t notice, or the difference for them is negligible. Tickets that are already in the cart don’t change price even if there is a price update in the meantime for the rest of the tickets. Until the checkout process has finished (either  through a completed purchase or cart abandonment) the price of tickets in the basket will remain the same.

• Dynamic pricing is a useful tool as part of your wider pricing strategy to attract and retain audiences, it can complement your existing membership programs, discounts / offers, and multiple ticket categories.

• Dynamic pricing makes it easier for your audiences to get the best tickets, at the best price by purchasing directly with you. Dynamic pricing disincentivizes scalping and bots by lowering the second-hand sellers’ profit. If they buy a lot of tickets with an automated bot, they pump up the price for themselves as usually there is a limitation of how many tickets can be purchased at the same time.

• Implementing dynamic pricing is a great opportunity to communicate with your audiences and help them understand why this is beneficial to them. You can help them understand how it will work and how they can get the best prices and availability according to the models that you have set up. This may be about booking early, or letting them know that they will no longer have to rush to get seats at the blockbuster show. DynamO can provide guidance and support on this.

“Dynamic pricing is only for profit driven organizations. It won’t help us reach new audiences or build lasting relationships with our communities.”

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Arts organizations need income in order to operate and bring their unique value to audiences and communities. Historically in the UK this has been generated through a combination of national or local government funding, philanthropic giving and earned income (i.e ticket sales). With a 16% real terms cut in arts funding since 2017, the shortfall needs to be picked up for the cultural sector to continue doing their vital work. Philanthropy in the UK is not as strong as in North America and although it has trended upwards since 2018 evidence shows that we can’t rely on this. The area where organizations have most control is their earned income.

Maximizing this is fundamental to survival. 

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Increasing ticket revenue supports all organizational goals whether that is better-paid artists and staff, higher production values or more community and outreach work. Without financial stability, organizations and the value they bring for their communities is at risk.

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“Dynamic pricing isn’t good for audiences, they won’t respond well…”

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• When implemented transparently and fairly, dynamic pricing is accepted by audiences as it reflects market realities and provides opportunities for better deals. DynamO has helped organizations to introduce dynamic pricing successfully across millions of tickets across Europe, UK and US without receiving negative feedback.
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• Well-set dynamic pricing can include cheaper ticket options. Buyers can benefit from lower prices during periods of lower demand, making events more accessible to a broader audience. 
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• Dynamic pricing can, and should, be combined with membership programs, early-bird pricing, and discounts/coupons, to allow you to reward loyalty, and ensure that no barriers are put in place for harder to reach communities.

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Anna Hetényi, Head of Ticketing at Müpa (Palace of Arts), shared her experience with combining dynamic pricing and their established loyalty program:

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"DynamO implemented their dynamic pricing solution with maximum flexibility, fully accommodating our specific needs at Müpa. They seamlessly integrated their system with our well-established loyalty program, allowing us to preserve its benefits for our loyal customers. For instance, during our pre-sale periods, we offer tickets at fixed prices, and once these periods end, we switch to dynamic pricing. This approach has enabled us to maintain customer satisfaction while optimizing our revenue through a tailored and adaptable pricing strategy."

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“Dynamic pricing is just about increasing prices, it’s not fair on the audience”

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• Smart dynamic pricing adjusts prices based on demand and other factors, it’s not simply designed to increase ticket prices as far as they can go. It's used to optimize both sales and attendance, often resulting in better deals and cheaper tickets for the audience which can support your organization to grow your audience base. Well-differentiated dynamic pricing allows organizers to offer cheaper tickets than ever before. For example, the Palace of Arts in Budapest offers lower-priced tickets as they can offset them with higher prices for more popular seats.
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• Ticket buyers willing to buy early or during off-peak times can secure better prices and you can engage your members or other loyal attendees to help them understand this. Event organizers should use transparent communication, controlled maximum prices, and avoid unethical tactics like pressuring hesitant customers. DynamO encourages clients to be transparent about their dynamic pricing strategies and never uses pushy tactics. Prices are primarily determined by demand and its pace.
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• Transparency in pricing strategies is crucial, and reputable sellers make it clear that prices may fluctuate based on various factors. Additionally, tickets placed in the basket do not change prices, and any additional fees (e.g., handling or convenience fees) are separate from dynamic pricing.
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• The decision to keep low-price tickets is up to the ticket inventory owner, but DynamO always recommends including affordable options. More expensive tickets can offset the revenue lost from cheaper ones. Initial ticket batches may also be sold at reduced rates, and prices can decrease for events that are not selling as expected.
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• Dynamic pricing can make tickets available at lower prices during initial sales or off-peak times, benefiting budget-conscious buyers. Increases that are applied should be small and incremental, rather than huge differences that will shock and annoy. A small difference is acceptable to an individual buyer, and cumulatively over time these can make a big difference to the financial stability of the organization.

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In contrast to the belief that dynamic pricing simply increases ticket prices and locks out some audiences, it can be the key to understanding the true market value of your ticket inventory, and being able to price strategically. As part of a well-rounded pricing strategy, you can maximize ticket revenue and make tickets available to the widest possible audience at the same time.

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Recently, the highly anticipated reunion tour of the iconic UK band Oasis has captured the attention of music fans worldwide. With the buzz surrounding their return, the demand for tickets has been through the roof. Unfortunately, the ticketing experience has left many fans more than disheartened, thanks to an avoidable problematic implementation of dynamic pricing.

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What Went Wrong?

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The crux of the issue lies in the use of dynamic pricing, a strategy where ticket prices fluctuate based on demand. While this approach is often beneficial in optimizing revenue, it can also lead to significant consumer frustration if not executed properly.

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Here’s a breakdown of the key problems:

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Lack of Communication: The promoter and ticketing company failed to adequately inform customers about the use of dynamic pricing. Fans were caught off guard when they encountered unexpectedly high prices—up to £350 for a ticket that started at £150. This lack of transparency eroded trust and led to widespread dissatisfaction.

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Long Queue Times: The combination of massive demand and dynamic pricing created extraordinarily long waits in online ticket queues. Fans were frustrated by the extended periods spent waiting, only to be shocked by inflated prices once they reached the front of the line.

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This shock quickly tuned into heightened stress caused by a checkout timer presenting people with just a handful of minutes to decide if they wanted to pay significantly higher prices for their tickets - and with it significantly higher fees charged by the ticketing company.

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Failure to Manage Expectations: Without clear communication and proper management of expectations, the dynamic pricing model became a source of discontent rather than an effective tool for managing demand and increasing revenue.

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Why These Problems Occurred

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These issues stemmed from a failure to follow essential procedures and protocols when implementing dynamic pricing:

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Defining Objectives: Understanding the objective behind dynamic pricing is crucial. Is it to maximize revenue, manage demand, or both? In the case of the Oasis tour, it seems this objective was not clearly communicated or managed effectively.

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Assessing Suitability: Dynamic pricing should be chosen only if it aligns with the goals of the event and the expectations of the audience. For high-demand events like the Oasis tour, it’s vital to work out if dynamic pricing is the right tool for the job.

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Setting Base Prices and Parameters: Establishing a fair starting price and appropriate parameters for price fluctuations is essential. If the base price is set too high or the range of price changes is too extreme, it can lead to consumer shock and dissatisfaction.

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Effective Communication: Transparency is key. Clear communication about how dynamic pricing works, including potential price changes and queue expectations, can prevent misunderstandings and build trust. ‍

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Terms and Conditions: Comprehensive and clear terms and conditions help set expectations and provide consumers with necessary information about pricing changes and ticket availability.

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Ethical Considerations: Ensuring that pricing practices adhere to ethical standards and consumer protection rules is vital. This includes avoiding exploitative pricing strategies and ensuring that the process is fair for all customers.

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The Right Way to Implement Dynamic Pricing

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When done correctly, dynamic pricing can be a powerful tool. Imagine it like a skilled chef adjusting the seasoning of a dish based on the taste of the diners. If the chef understands their ingredients and the preferences of their guests, they can create a balanced, enjoyable meal. Similarly, dynamic pricing, when implemented with precision and care, can meet both business objectives and consumer expectations effectively.

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Conclusion

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The Oasis ticketing debacle highlights the importance of following proper procedures when using dynamic pricing. By defining clear objectives, communicating transparently, setting appropriate prices, and adhering to ethical standards, dynamic pricing can be a valuable asset rather than a source of frustration.

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You would think and hope that the promoter and the ticketing company for the Oasis tour would have these procedures and protocols in place. Oasis themselves are distancing themselves from  who was to blame and the promoter and the ticketing company are pointing fingers at each other.  Perhaps it was all a mistake. Perhaps they all knew what was going on. I'll let you decide.

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No Oasis lyrics were used in the creation of this article.

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