Grim warning on new pricing trend

The use of dynamic pricing for major concerts — including Green Day earlier this week — could have a “ripple effect” on local Australian gigs and venues, experts have warned.

The controversial ticketing method has taken Australia by storm this year, with the sale of Green Day tickets just the latest instance of punters being slapped with soaring prices as high as $500 for seated tickets, leaving fans fuming.

Australians got their first taste of the ticketing model in January when tickets to the Men’s Australian Open final shot to $5000, with the Grand Prix sparking similar surge pricing.

Economist and Royal Melbourne Institute of Technology (RMIT) senior lecturer Dr Meg Elkins explained the ticketing method is “surge pricing that increases as demand increases”.

“It often means we’re seeing prices increase, and this is where consumers get unhappy – they don’t see that fixed price falling, they’re only seeing it increasing,” Dr Elkins said.

However University of Technology Sydney marketing lecturer Dr Nigel Bairstow warned the use of the ticketing model for major events could go further than simply affecting the wallets of patrons, with potential trouble for Australian live music venues and local artists.

“When you’re paying up to $500 for a ticket it can really create a ripple effect on local venues,” Dr Bairstow said.

“What you’ll find is it'll just force the closure of a lot of these venues — the venues will have to cut back on live music.

“There's a lot of pressure because were in a recessionary environment, and people are really trying to tighten their budgets.

“It really does impact dramatically local artists, it just really reduces people’s disposable income to spend on local artists.”

Dr Bairstow branded dynamic pricing as “ridiculous”, claiming it is “taking advantage of people”.

“It’s really has got out of hand, and I think that dynamic pricing is just taking advantage of people … it really does it lines the pockets of the international artists or the ageing rockers who are trying to top up their superannuation accounts,” he said.

“But it probably doesn’t help local artists.”

Dr Meg Elkins also said dynamic pricing could lead to music lovers burning through their “entertainment budget” much faster.

“Maybe our entertainment budget is $200 for three or four months, and if we’ve got uncertainty with that budget and how much to spend on an event, this may develop some kind of price anxiety: you don’t know exactly what you’re in for,” Dr Elkins said.

“You also know the power of music and going to live music, and how that cultural participation makes you really happy. If you’ve only got one gig you’re going to go to per year … to pay $500, that’s so much money.”

Dr Elkins also noted many artists are living off “barely sustainable wages” - meaning a further blow to ticket sales for Aussie events in the wake of dynamic pricing for major concerts could put even more strain on artists.

“Artists are increasingly finding it difficult to have a sustainable livelihood off music — it means that all the riches go to the very few,” she said.

“Also festivals are being taken away, so that used to be a huge opportunity for musicians to promote themselves and to have touring gigs that line up, so the ability to make money for musicians is becoming smaller and smaller.”

The ticketing model is being sold to artists by ticketing giants as “it’s either the scalpers get money, or we get the money”, according to Dr Elkins, who called for punters to receive more of a warning if dynamic pricing is going to be in use for events.

“I think the difficulty that consumers have is when they think they’re signing up for one price and when they get to purchasing the tickets the prices change,” Dr Elkins said.

“I think there needs to be some warning or some sign that prices might be surging.”

Dr Nigel also said Australia needs to “strike a balance” between seeing local artists and big international artists so the Australian industry doesn’t become a “subsidiary of the US or UK.

“I think it’s important we keep supporting home grown talent.”

NewsWire has contacted Ticketmaster for comment.

A spokesperson for the Australian Competition and Consumer Commission earlier said some sectors use dynamic pricing in some form, including ridesharing, airfares and accommodation.

“Businesses can generally set, raise, and lower the prices they charge for the products and services they supply,” the spokesperson said.

“Businesses decide the prices of their goods and services based on a variety of factors, including supply and demand issues. If a business uses dynamic pricing when advertising, marketing, and selling goods or services, they need to ensure that they do not mislead consumers, and consumers are aware throughout the transaction process about the costs.”

The spokesperson said there is “potential for consumers to be misled by dynamic pricing”.

“Whether or not a business’ use of dynamic pricing may be misleading will depend on the circumstances involved in each case, including what representations a business may have made to consumers about their pricing in promoting the event and when selling tickets to the event,” the spokesperson said.