The St. Louis Cardinals have selected the vendor for their new dynamic ticket pricing starting in 2011.
Back in November, the St. Louis Cardinals announced they would be joining the ranks of other teams across a number of professional sports using dynamic ticket pricing starting this coming season.
Anyone familiar with how airline seats are priced and sold already understands the basic concept – charge more when demand is high and drop prices when demand is lower.
The challenge for clubs is to make these changes quickly and in a manner most advantageous to maximizing profit. Of course, the team spins it as being a fan-friendly action. Thank God they are looking out for the peeps.
“Our number one goal is to provide our fans with the best values possible and fill the stands at Busch Stadium,” said Joe Strohm, Cardinals vice president of ticket sales.
New news on this front occurred on Thursday, when it was announced that both the Cardinals and Oakland A’s have selected their vendor to manage the process.
Qcue [kyoo kyoo] from Austin, Texas will be the provider of the “dynamic pricing engine” that will manage ticket prices for the 2011 season. The Cardinals are far from the first to hop onto this bandwagon, joining other teams from Major League Baseball, National Basketball Association, National Hockey League and NASCAR as Qcue clients.
Qcue’s algorithms adjust prices in real time as they monitor ticket demand. Conditions such as pitching matchups, weather, opponents, day of the week, sales to-date and other factors are taken into account. The software communicates directly with Tickets.com, MLB Advanced Media’s wholly-owned online ticket seller, allowing teams to change prices almost instantaneously.
According to stats on Qcue’s website, 40 percent of seats end up unsold while 10 percent of tickets are re-sold on the secondary market at an average of double the face value. Clubs see opportunity in cutting into each.
The Cardinals haven’t had problems selling tickets any time recently, though 2010 brought seemingly more specials than in the past. The team drew 3,301,218 to Busch Stadium last season, the fourth-highest attendance in Major League Baseball. It was the 14th time in franchise history and seventh straight season the team topped the three million mark.
The stakes are especially high for the Cardinals. Despite being in the 24th-largest metro market of 30, the team ranks in the top five in MLB in local revenues, according to team president Bill DeWitt III. That category includes food, beverage and of course, ticket sales.
During his Winter Warm-Up presentation, DeWitt noted that his club is more dependent on these local revenues than many others and announced the Cardinals are implementing a customer relationship management (CRM) system to enable them to track individual customer histories and target specialized initiatives.
MLB also has their fingers in the lucrative ticket resale segment of the market as they enter their fourth season of a five-year deal with EBay’s StubHub Inc. unit signed in 2007. Season ticket holders looking to resell individual game tickets are assessed a fee equivalent to 15 percent of the sale price while buyers see 10 percent tacked onto their purchase. I suspect clubs have also used this avenue to move excess inventory. It is masked as Stubhub does not disclose sellers’ identities to buyers.
First and foremost is filling up the stadium the first time around.
“Qcue’s solution not only gives us greater day-to-day ticket pricing flexibility but also broadens the ticket-buying fan base, rewards fans for buying earlier in the season and protects season ticket holder value,” Strohm said.
I am not so sure about the assertion of rewarding early buyers, as ticket prices could just as easily go down for certain games as the season progresses.
The benefits of dynamic ticket pricing to the team is clear. For the customer, it is much less so.
Acquiring tickets is being turned into an investment-style guessing game for the prospective buyer. At any sporting event, like on an airplane, each person in a given row may have paid a different price for an identical seat, yet no one other than the ticket seller themselves know who got the best deal.
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This was adopted for a purpose. The season ticket holders of St Louis are very conservative, and as the stadium plan suggests………very class conscious………..
This system was designed to maximize the profits for low attendance teams……….for the Cardinals, it was to scare the season ticket holders into maintaining there status……….should the AP negotiation blow up………….nice planning. Should you decide to cut back and only see the games you want……….you will likely sit in big mack land…………….. and they do it in Texas, with a computer……….. so no one is to blame………..some damn algorithm has me sitting next to…….someone that isn’t wearing Red……………………..psychological war fare from BD to you……….almost like he figured there might be an abdication…………for some reason………or another……….Gordon’s column is trying to help AP decide…………….
Pujols and his agent probably give about as much credence to Gordo as everyone else – Zilch. Haven’t figured out how the guy keeps his job.
I would have to think that column was oriented to the type of reader that hasn’t followed any Cardinals news since the season ended.
Day# without a TLR rant.
I am boycotting buying tickets until Pujols is signed. Of course not having a job helps, but that is not the point.
That was supposed to be Day #2.
This message, with its intent to correct, was obviously caused by the psychological pressure of your heroic stand against ………….well you know……..that guy……..that idiot……oops
On pricing……………………Wainwright against Zambrano…………. early demand isn’t going to drive those prices up in the good seats……………..they will start sky high……..and stay sky high until the gates open maybe……….you will never know whether it was demand or not………. better to keep your season tickets that won’t be effected…….right?
I wonder if my technical analysis software can be adapted to buy tickets low and sell high. If so, I’ll have to figure out how to sell short and buy on margin.
Reminds me of the “loosest slots” signs in casino country……………….. They will never need to loose face now when they want to hike tickets, or let the rabble in to drink the 8$ beers or the 7dollar polish dog……………. If AP gouges, they just get out the screwdriver, and tighten down that “algorithm” a little………….
Whether any here recognizes it or not………Jeff Gordon carries the water for the front office. I know that to be true…………………….. todays column has a specific purpose………..it is the predecessor to the, “Offer” release………..which is suppose to be the “qualifier” ..that redeems the AP’s harassed front office……………….that means by the weekend likely……………………
Hmm, bb. Taking that one step further, a temptation for Qcue employees to engage in insider trading?
Very interesting Brian.
Let us pretend there is an imaginary fictional big star named Jose Alcantara, any resemblance to any real person is coincidence, and he wants to pocket some moolah. He announces his back is sore and he will sit out the next home series. Prices go down and he buys a boatload of tickets. Then he says he woke up good as new and will play after all. Prices go up and he sells.
Just an example of how this whole thing might be manipulated, in addition to the manipulation by the club.
Or the clubhouse boy finds out before TLR announces it the pitching match ups for the next few series………..hmmm……….maybe trade some insider info for a cut of the profits?
This thing just ate a “nice” post of mine…………………..
Fixed, WC. I suspect the word “casino” might be a spam filter special.
Ironically, just an hour or two ago, I received an email offer to pick up a quick Benjamin to slip a link for what I am guessing is an off-shore betting site into a blog post here.
http://www.foxsportsmidwest.com/01/24/11/Lohse-hopes-to-contribute-to-playoff-run/landing.html?blockID=396733&feedID=3708
This link has a bunch of nice HD footage of the warm up…………….. what a bunch of homers…
Article on dynamic pricing
http://elmaquino5.wordpress.com/2011/01/25/interview-with-qcue-on-dynamic-pricing/
Thanks for sharing, CC. This is the hardest-hitting Q&A, but seems to me to miss the point. Of course, current prices are always known. Or did I miss something?
EM: Some of Qcue’s detractors say that a problem with dynamic pricing is that they cannot go to a game whenever they feel like because they don’t know exactly what tickets will cost that day. Is this a valid point or a misinformed opinion?
LT: It’s actually just as easy as it was before to find out the prices. Prices are updated in real-time so whether it’s the box office at the gates or online, fans can easily view the current prices.
But for personal planning, it could be advantageous for a person to think in their head, “I think I’ll take the family to the game tonight” and know that he is looking at $120 for 4 tickets rather than going online later in the day (after already making plans) and find out that they are $180.
I wonder how this affects ticket scalpers. I guess they will have to have their smartphones with them to constantly check the ticket window prices.
What I’d really like to know though (mostly out of curiosity) is what kind of variability have other clubs seen. Do prices fluctuate upwards up to 20%, 50%? To what extent do they fluctuate downwards? 20% off? 80% off? Of course with the Cards having less empty seats, it may be a different dynamic.
This seems similar to the pricing at Wrigley where there is like different levels of pricing based on the opponent that is playing that series in Chicago.
RC, the Cardinals already had that. This is an ever changing model.
Right, I understand, but it seems that it is based on the same premise. That for the games against the better teams, when the better pitcher is throwing, that the tickets prices would go up, because those tickets would be desired moreso than the game where there was some joe blow throwing for the Astro’s?
Yes, I would be curious about variability levels, too, but I can’t imagine clubs would want that information to get out. Someone externally would have to track it closely. I’m not signing up for that…