Stupor last October 7, when tickets for the next Depeche Mode tour went on sale: several seats in the best sections of the Bell Center could reach up to $2,000. The website of Evenko, promoter of the British group’s Montreal stopover, even offers “certified resale tickets” on the floor at nearly $2,600.
But inflation does not completely explain this surge in prices: the main reason is the use of what is called “dynamic pricing” by the entertainment industry’s dominant box office, Ticketmaster.
In Montreal, like everywhere else Depeche Mode will stop during its Memento Mori Tour next spring, the exorbitant ticket prices make their admirers cringe. However, they pale in comparison to those requested for certain places at the next concerts of Bruce Springsteen: around 5000 $US. The case provoked an outcry from Boss fans last August, including the image of ” working-class hero tarnished somewhat after he consented to the practice, even when Ticketmaster replied that he put barely 1% of tickets on the market using dynamic pricing.
Dynamic pricing is “a method that takes into account factors that change over time, which makes it possible to modulate the price [d’un billet ou d’un autre bien] depending on the context” in which the transaction takes place, sums up Danilo Correa-Dantas, associate professor in the Department of Marketing at HEC Montréal and specialist in cultural industries.
In other words, it is a way of making a price fluctuate in real time, using algorithms designed for this purpose, according to demand and distinguishing “dynamic” prices from “differentiated” prices – a ticket in the first row will be worth more than the one in the last tier.
“The kings of dynamic pricing are the airlines”, which have been using it for years, illustrates the professor. “Depending on the demand for a specific flight, we can increase the price of certain seats or decrease the number of seats available at a cheaper price. »
But its use remains fairly recent in the entertainment industry. In the United States, it is defended in particular by the Ticketmaster box office, which belongs to Live Nation Entertainment. This global concert giant entered into a “strategic partnership” with Evenko in 2019.
To the interview requests of the To have tothe representatives of the Montreal promoter responded by email that “the dynamic pricing is a common practice that is not unique to the entertainment industry (but also to several other business sectors) and has been going on for several years in North America, so the prices follow the principle of “offer and demand”. »
“As for the Depeche Mode show, it has been sold out since it went on sale, we can conclude that the prices were not an obstacle to buying tickets”, we also note.
Good use of algorithms
“In the world of opera in North America, dynamic pricing is extremely widespread,” says Catherine Gentilcore, director of marketing and communications at the Opéra de Montréal, resident company at Place des Arts, which works with Ticketmaster to its ticket office.
“As early as 2018, we started to take an interest in dynamic pricing and then approached different service providers because we were not satisfied with Ticketmaster’s algorithm. In our opinion, it did not take into account all the necessary parameters, because dynamic pricing, if done well, does not only cause the price of tickets to go up, but can also bring prices down”, thus allowing to better fill the halls during less popular performances.
One of the arguments put forward by Ticketmaster to justify this dynamic pricing is the problem of resale: depending on demand, the price of a ticket can double or triple, or even more, on the secondary market. Dynamic pricing would therefore allow the artist, his producer and his promoter to reap a portion of the profits that the resellers would make.
“The argument is not totally false,” says Danilo Correa-Dantas. “If I’m a reseller, I try to catch the big fish: it’s much easier to sell a ticket at a very high price than to sell, say, 300 to 50 $ each. In this sense, we are attacking the top of the market”, the one who already has the means to buy places at a high price.
“But does [l’usage de la tarification dynamique par Ticketmaster] is democratic, in the sense of facilitating access to cultural products? asks Mr. Correa-Dantas. “I would say no, since it causes a certain ‘elitization’ of the cultural product. »
“We have formed an oligopoly”
The high prices can also be explained by the rarity of the product — Depeche Mode’s last visit to Montreal dates back to 2017 — and the profile of the target audience. “Depeche Mode fans are older today, they are people who have higher incomes, so I can afford as a merchant to display higher prices”, adds the professor.
Until the market decides the price is too high. Since 2011, the price of concert tickets has increased by almost 60%, the Toronto magazine recalled last month. Canadian Businesswhich attributes the responsibility for a large part of this increase to Ticketmaster’s stranglehold on the Canadian music industry.
“I see Ticketmaster’s dominant position in the industry with some discomfort”, also comments Professor Correa-Dantas. “We have formed an oligopoly, since we cannot do without Ticketmaster or Live Nation to obtain tickets for certain types of concerts, and that harms competition. It is not to the benefit of the consumer. »