Drake's Dynamic Pricing Is A Downer
The last thing Ticketmaster Canada needs right now is another black eye.
By David Farrell
The last thing Ticketmaster Canada needs right now is another black eye.
Hit with $4.5M in fines and levies by Canada’s Competition Bureau last month for allegedly misleading pricing claims in online ticket sales, the company has agreed to a compliance program to ensure their advertising conforms with the law, and will implement new procedures to prevent advertising issues in the future.
The Bureau’s investigation concluded that Ticketmaster’s advertised prices were not attainable because they added mandatory fees during the later stages of the purchasing process. In the Bureau’s view, the price representations were misleading even though the amount of the charges was disclosed before consumers completed their transaction. The Bureau concluded that the additional fees often added more than 20% and, in some cases, over 65% to the advertised prices.
According to the government agency, this is the fifth time since 2015 that the Bureau has successfully taken action to resolve concerns regarding the advertising of unattainable prices online. The Bureau’s work related to similar practices has led to a total of $9.95 million in penalties paid to date by Ticketmaster and major car rental companies: Avis/Budget, Hertz, Enterprise and Discount.
A month later and Ticketmaster is again in the spotlight, but this time over dynamic pricing that scales online ticket sale prices based on demand. Ticket pricing for Drake’s OVO Festival is in the cross-hairs this time, with various news reports citing customers being asked to shell out $500 for lawn tickets at Toronto’s Budweiser Stage, and seats going for as much as $2,500.
Adding to the PR bruiser, various news outlets, including Global News, posted comments made by fans on social media and the blowback isn’t pretty. Lloyd Gebbie, on Twitter, did the math on one of two shows, stating that Budweiser Stage holds 16K people and 7K on the lawn.
” Lawn = 7,000 x $500 = $3,500,000
“Everywhere else = 16,000 x $1,000 = $16,000,000
How much money does one guy need...”
To be fair, Ticketmaster, ultimately, is in the pay of its masters, the acts that use its services to sell tickets--but the optics are bad for the company, and Drake is ultimately answerable to his fans who now are royally ticked off that their uber-wealthy hometown hero is seen to be dissing loyalty and fandom in favour of those with deep pockets.
To emphasize Drake’s net worth, earlier this month Forbes ranked him the fifth wealthiest hip-hop artist on the planet, with a net worth pegged at US$150M.
Dynamic pricing has been a bugaboo for the concert industry for a long time, but until recently the gambit has worked as demand for tickets more often than not has exceeded supply, hence the uptick in ticket prices for top-draw artists. But the salad days have come and gone for most, and disposable income for the rank and file who fill the majority of seats is both finite and stretched.
A recent MBW analysis of Pollstar data suggests that the golden days of unfettered pricing may be over, or at least damaging business.
“Is the live music industry getting its ticketing strategy wrong – or are there simply not enough megastars touring right now?” MWB asks.
“These are the big questions the concerts business will be asking itself today, as MBW reveals a significant slump in global touring revenues in the first half of 2019.”
It’s worth a read, especially if you are in the ticketing or concert promotion business.
