Wednesday, January 25, 2012

A's Dynamic Pricing Goes Season-wide

Buried in the A's news piece regarding upcoming FanFest was that the A's are shifting to an entirely dynamic pricing model for 2012 -- meaning that ticket prices will rise or fall based on demand. From the A's press release:

...the club today announced that dynamic pricing will be used on all single-game tickets in 2012. Last season, the A’s dynamically priced nine premium home games. With the help of software analytics provided by Qcue, the A’s will be able to accurately set and adjust ticket prices in real-time, based on actual demand for a game, taking into account a variety of factors such as day of the week, weather, opponent, pitching matchups and team performance. Current pricing information for individual tickets will be available online at (Editor's note -- On the release this URL is linked, but leads to a dead end. Might want to keep it unlinked until the site is live.)

Steve Fanelli, A's executive director of ticket sales and operations commented on how this season's tickets were priced in a recent Forbes blog piece:

Under variable pricing, we made our pricing decisions for an upcoming season 5 months before the first pitch was thrown…categorizing groups of unique events into pricing groups that limited our ability to look at each event as to what it really is. Namely, a unique and unrepeatable event that possesses a multitude of characteristics both on and off the field.

Oye. A bit opaque if you ask me. Qcue, the software being employed by the A's reviewed data from the system's use in 2011 in baseball and the blog The Business of Sports recapped it. Salient findings from the piece:

Average price change per seat: $1.55 increase
Average percentage change per seat: 3% increase
Average price decrease: -$13.63
Average price increase: $3.27

The piece also notes that a team can increase their revenue by an estimated $900,000 by implementing dynamic pricing.

The bottom line is that the A's seem unlikely to benefit a tremendous amount from this plan as they seem destined to wallow in mediocrity (if we are lucky) this season. The Giants have done well with dynamic pricing, largely thanks to the fact that they have been exciting and competitive. When the A's unveil their pricing, we will see what the data has told them. If you really want cost certainty, become a season ticket holder. They pay the same price regardless of other factors and its always lower than whatever dynamic dip might happen.

This move by the A's can hardly been seen as surprising, but what is a surprise is that it took a team seemingly obsessed with data so long to go this route.

Quick Note -- The Giants just emailed details on their FanFest. It's free. Then again, the Giants own their ballpark so the cost is surely lower.

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