If you want to see Bruce Springsteen play in the US, it may cost you. Some of the tickets for the Boss’s forthcoming tour are going for over $4,000 (£3,300) on Ticketmaster – prices that have triggered a backlash and angry headlines. Do you get hand-fed gold-coated caviar and have your feet massaged by a supermodel for that money? Not exactly. The reason the tickets cost so much is because of “dynamic pricing”. Ticketmaster has said most Springsteen tickets cost under $200, but 11% are part of a variable pricing strategy where the cost adjusts according to demand. Think Uber’s surge pricing – but for concert tickets.
While people are understandably outraged by Ticketmaster’s antics, dynamic pricing isn’t unusual. We’re all used to the fluctuating prices of hotel rooms and aeroplane tickets, for example. What is newer, however, is the extent to which dynamic pricing is being used. According to a 2018 Deloitte and Salesforce report, 40% of brands that use artificial intelligence to personalise customer experience have adjusted pricing and promotions in real time. A recent McKinsey report, meanwhile, notes that Amazon “reprices millions of items as frequently as every few minutes”.
Adjusting prices according to supply and demand is one thing, but companies are also getting increasingly sophisticated and personalising prices based on data they have about you. While companies tend to be secretive about personalised pricing strategies, it’s easy to see how your data may be used against you. An Uber employee once divulged, for example, that the company knew people were willing to pay higher prices if they had low phone batteries. The employee stressed Uber, a famously honest company, doesn’t use that information – but you can certainly see how data like this could be exploited. That said, personalised pricing can also be progressive. In Finland, for example, speeding tickets are based on your income. Perhaps Ticketmaster ought to think about applying that logic to its concert pricing – it would be a boss move.