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Wednesday, August 18, 2010

I wouldn't buy a £50 ticket in a £30 economy

Happened to catch a tea interval conversation on Test Match Special between Jonathan Agnew and the bloke in charge of the Oval during yesterday's England-Pakistan test match. The subject was the poor attendances we've seen during internationals in other parts of the country finally starting to affect the London matches. The Bloke, who was very reasonable and perfectly happy to accept criticism, admitted the evidence seemed to be pointing to the fact that the prices might be too high. The cheapest ticket to attend a London Test for just one of its five days was £50.

He let slip that he'd always believed that if people would pay £30 they would pay £50. This is a classic example of how prices rise in a boom. The people setting the prices - whether they're the people running the Oval or the managers of your favourite indie rock band - keep pushing the price until they feel the market begin to push back. They do it in bigger increments all the time. It's not hard to see their reasoning. They've got to make up for massive shortfalls elsewhere, whether it's the drop-off in record sales or attendances at county matches, and they argue that £50 for six hours of top class sporting entertainment seems reasonable, certainly compared to whatever you have to pay at Chelsea or Arsenal or the Grand Prix.

This is not how the customer sees it. The customer, generally male, sees it as £50 each for him and possibly his wife; then maybe another £50 for two offspring; add in the general expenses of a day out (transport, parking, food, drink, unforeseens) and it's not hard to spend £200 on what could turn out to be a weather disrupted day of no great distinction without any winner at the end of it. And here it's not like football. Our man could spend £200 and return home with a family which is less happy than the one he went out with.

It's the same with rock bands. You might be able to demand £50 for your absolute favourite performing at the top of their game in a perfect venue. Problem is that a lot of the time you're delivering the act you've always kind of wanted to get round to seeing performing a ho-hum set in an unsympathetic venue with rotten sight lines. People don't go home from an unsatisfactory day or night out saying, oh, well, you have to take the rough with the smooth. They go home feeling angry and swindled.

Part of the answer, of course, is for the £50 ticket to go back to being £30. At £30 you might be prepared to take the risk. For £30 you might be prepared to give the event the benefit of the doubt. It ultimately makes a kind of sense for the promoters too. Already in the USA this summer they've been slashing the prices of tickets for big stadium shows because they have to get people in there to buy the tee shirts and to pay for the parking. Otherwise they're stuck with hugely expensive real estate with nobody in it. There's a piece about this in the latest issue of The Word.

While the web has had a deflationary effect on most things over the last few years, with live entertainment it's pushed prices in the other direction. This seems to be at an end. You can't go on charging £50 when everybody out there knows it's a £30 economy. Not unless you're going to be able to guarantee the experience.


7 comments:

Gerontius said...

I think the forward booking period also needs to be added into the mix. For too long, major tours have gone on sale a full year ahead of the actual performance dates. I have always railed at this - the promoters simply bank the cash and make money out of it for a full year. But who now feels confident and secure enough to book a couple of £50 seats a year in advance? Let's hope the forward booking period as well as prices gets reduced.

John Medd said...

You're pushing at an open door here David. There have been instances in the sporting sphere where those in charge of dreaming up ticket prices have done their sums 'outside the box.' Two in particular spring to mind: Towcester Racecourse - free to get in. They know that they get it back on The Tote and, probably, at the bar. And Mansfield Town FC (though they've only done it once to my knowledge) - pay at the turnstile what you think it's worth: a penny, a pound, a tenner - it's your call. The Radiohead theory, you might say. Maybe if you paid on the way out and paid what you thought it was actually worth may be a better guide.

David Hepworth said...

Gerontius, this is by no means my area of expertise but I don't think it's accurate to depict promoters getting fat out of the interest on the ticketbuyers cash. This is not an area where you get a great deal of candour and the deals are done in the dark and kept dark but I think the general pattern goes something like this. Promoters bid for the right to mount tours. Generally speaking whoever bids the most wins and they have to pay the act a substantial amount of the money upfront. I don't think your money's sitting on deposit somewhere. In fact it may well have been spent long before the event - by the act. The people really suffering in the current meltdown are the promoters. The people who have been quietly prospering - setting the prices and avoiding making any comment on the situation - are the acts. Same in football. Portsmouth may go the wall owing hundreds of small tradesmen and season ticket holders. The footballers and agents will get paid first.

Michael said...

I am having to exert great self control not to read online the whole September issue of The Word that you have provided a link to. I shall be good and wait to buy my hard copy in about a month here in Australia. I will read it on the train and in cafes and it will give me about a week's worth of reading, dipping in and out, whereas the online version would be skim read in less than an hour.

Zero Albedo said...

is that full free online edition of the Word available every month?
if so, are you not reducing your revenue?

John

David Hepworth said...

Zero, we make this edition available to subscribers approximately two weeks after they've had the magazine delivered to them (thanks to our terrific subscription service - http://wordmagazine.co.uk/buy). In our experience people don't considered it a satisfactory substitute for the paper magazine but do see it as a useful addition to the service. Obviously, a minority of people might think 'oh, I can get away without buying the magazine and just read it in this fashion'. That's a risk you take. On the other hand, some people might see the magazine for the first time in this form and decide to investigate it further. It's not an exact science.

maceasy said...

So, the infamous £50 man is now the £30 downsizer. On the subject of promoters - I think they do take risks, especially in an uncertain economic climate. However, one of the principal villains in live ticketing is Ticketmaster, who simply add premium markups to already very expensive tickets. Booking, say, 4 tickets becomes so dear because of the extra, unjustifiable, add ons. I wouldn't be surprised if these straws on the camel's back are enough to tip many people into not bothering. Especially when you now have high definition big screens at home - really why should you cough up unfeasibly large piles of cash for an uncertain experience?