Opinion

Felix Salmon

Ticket pricing datapoints of the day

Felix Salmon
Nov 29, 2011 21:56 UTC

A few ticketing datapoints from recent news coverage:

  • The Leonardo show at the National Gallery in London is sold out through the end of its run, in February, with ticket prices at £16 ($25) apiece. Some sites are offering the tickets for resale at as much as £300, but the National Gallery says that if you have a resold ticket, you won’t get in.
  • Christie’s is selling tickets at $30 apiece (plus tax) to see the collection of Elizabeth Taylor before it goes up for sale on December 13.
  • Broadway shows are nearly all using variable pricing now, with tickets to see Hugh Jackman costing as much as $350 each, while tickets to The Book of Mormon are currently $477 apiece.
  • Thanks partly to such tactics, Spider-Man set a new box-office weekly record for the Foxwoods Theater last week, bringing in $2,070,196. (Back in December, Catherine Rampell said that under a “best-case scenario”, the musical could gross $1,646,991 in a week.)

Rampell’s not wrong on an average basis: Spider-Man is typically grossing something less than $1.5 million a week. But what really interests me about this chart is its volatility:

1128-cul-SPIDERweb.jpg

If you want to maximize total revenues, this is the kind of chart you want to see: one where the box-office gross can rise past $2 million a week in a heavy week, but the show can still play to full houses at a lower gross at slower times of year.

What we’re seeing in London is the failure of the old model, where ticket prices were set in advance and never change. Set them too low, and you wind up with Leonardo-style fiascos, and ticket scalping. Set them too high, and you leave money on the table. And of course the prices are set long before the rave reviews come in, so you can’t be too optimistic or aggressive in pricing them.

What we’re seeing at Christie’s is an example of a company choosing a pretty sensible way of managing the inevitable crowds. Give people timed tickets, and the auction house won’t get mobbed by thousands of people wanting to just turn up and see celebrity schwag. And if you’re selling tickets anyway, you might as well sell them at a high price.

And what we’re seeing on Broadway is the perfection of the variable-pricing model which has long been used in the airline industry. When you don’t need to print tickets in advance with a face value on them, you can change prices dynamically according to supply and demand, and there’s really no limit to how much, in theory, you can charge.

The losers here are the ticket brokers, and no one’s crying for them. People have always paid hundreds of dollars per ticket to go see Broadway shows — they just haven’t paid the theater and the producers. It’s much better this way. I wish that the National Gallery was a bit more commercial in its ticket-selling: I’d pay good money to see the show when I’m in London next year, but I don’t have the ability to do that now.

The optics, though, are dreadful: a state-owned institution can’t go charging $100 per ticket to see a show of nine paintings. Only the rich could then afford to see the show, and the National Gallery is for everybody, not just for the rich.

But there has to be some way to make this work. Maybe market-rate tickets could be sold alongside a £5 option which involved a lot of waiting in line, something like that. Not all tickets need to be market-rate. But there’s no reason some shouldn’t be.

COMMENT

The National Gallery has a different model than Spider Man. It’s not set up to maximize revenue. It’s set up to maximize availability (or something else). The so-called “free market” principles should not be applied to it.

If that were the case, the National Gallery of Art would be open only to the highest bidders. Kind of like the Capitol Building.

Posted by sagreer70 | Report as abusive

Monetizing Emma

Felix Salmon
Aug 20, 2010 22:25 UTC

What’s scarier than Pride and Prejudice and Zombies? That’s easy: Pride and Prejudice and Structured Finance! Which is essentially the theme of Monetizing Emma, a play which I finally got around to seeing at the New York Fringe festival last night. As playwright Felipe Ossa puts it:

Girls have always been involved in economic compromises. We wanted to pose the question: In the 21st century, would a mother be marrying her daughter off to a suitor, or to the marketplace?

The play displays a lot of sophistication about structured finance, as you might expect from a playwright who has also written for the International Financing Review. It’s also very funny and sharply written, which you might not. And, lots of Jane Austen!

I went to see it with someone who knows pretty much nothing about high finance, and she loved it, but the finance-geek in-jokes are great too. Go for the Paris Hilton jokes, stay for the close reading of a bond prospectus. It turns out to be dramatically much more riveting than you could possibly expect, and the sold-out audience of downtown New Yorkers last night loved it.

(Incidentally, the theme of the play is a financial instrument not dissimilar to the jock exchange that Michael Lewis promised us back in 2007. Whatever happened to that?)

COMMENT

Hal Hartley made a film a few years back, The Girl From Monday, in which people are routinely securitised. It wasn’t all that interested in the finance geekery though.

Posted by GingerYellow | Report as abusive
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