Quick thinking was the word of the year, and dynamic pricing was also a candidate.

Oxford University Press may have chosen “brain rot” as its word of the year, but “dynamic pricing” was also a top choice.

Dynamic pricing, a term originally coined by economists in the late 1920s, is defined as “the practice of changing the price of a product or service to reflect changing market conditions, especially by charging a higher price when demand increases. “to do.” House said on its website.

Many people associate it with fluctuating airline ticket prices or the way the ride-hailing service Uber adjusts fares during busy periods. However, there has been increased awareness and controversy regarding the 2024 practices, particularly when it comes to purchasing tickets for the popular event.

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“In several high-profile cases, dynamic pricing has been used to price concert tickets, resulting in fans (often reluctantly) paying significantly higher prices to see their favorite artists. In some cases, fans waited in virtual queues for hours before they realized how much they were being asked to pay, the transparency of dynamic pricing practices, and the value for money. “This leads to questions about,” the University of Oxford said.

Ticketmaster is under investigation in the UK for its recent use of dynamic pricing to sell Britpop band Oasis’ reunion concert next year.

Many Oasis fans complained on social media that they were forced to pay more than double the face value of tickets without warning. The band announced that they would be canceling practice for their North American tour.

Taylor Swift reportedly refused to dynamically set ticket prices for her Elas tour because “I didn’t want to do that to my fans” as she promotes the event Jay Marciano, chairman and CEO of AEG Presents, told HITS Daily Double in October.

Robert Smith, lead vocalist and guitarist for The Cure, also said in an interview this fall that dynamic pricing is “driven by greed” and called the practice a “fraud.”

Andrew Mohr, an associate professor of music at Northeastern University, said when and how to use dynamic pricing is at the discretion of the artist or executive, and is often made behind the scenes.

But with so many high-profile tours happening these days, “dynamic pricing has certainly moved to the forefront of concert-goer attention,” he said.

“If you’re looking for an Uber or a Lyft, we all know that it costs more at certain times of the night, and the market adapts to that,” said Joe Bennett, a forensic musicologist at Berklee College of Music. It seems like there is.” “But concert tickets were usually full price.”

But slowly, changes began to emerge.

Throughout the 21st century, revenue from recorded music has declined while revenue from live music events has increased. In a paper on economic issues and trends in the rock and roll industry, economist Alan Kruger writes that by the mid-2000s, concerts had become a “larger source of income for performers than record sales or publishing royalties.” ” states. According to data from Statista, revenue in the live music industry increased by 25% in 2023 alone.

In 2011, Ticketmaster first introduced an early version of dynamic ticket pricing. This is now the standard for live music ticket sales. In recent years, pent-up demand after the pandemic and a surge in megastar stadium tours have “crashed ticket sales,” Bennett said.

“I can see why it’s appealing,” he said. “The live music industry always leaves money on the table that fans would pay. Dynamic pricing is like an inevitability of capitalism given the forces at work, but I I don’t want to live in a world where it costs $1,000 to meet Taylor Swift. ”

Still, whether consumers like it or not, it has become common for ticketing platforms to charge more per ticket depending on the demand for a given event.

“As you can imagine, it’s not very popular,” said Matt Schultz, chief credit analyst at LendingTree. “Companies and musicians are trying to figure out what the market is going to be, and that’s making things very difficult for consumers.”

Despite complaints, consumers have proven highly tolerant of live event price increases, also known as “fanflation.” Recent reports indicate that young people, especially Gen Z and Millennials, are even going into debt to pursue these experiences.

A recent study from Bread Financial found that nearly two in five Gen Z and Millennial travelers spend up to $5,000 just on tickets to live events at their destination.

“It’s important to know your limits,” Schultz says. “Even if you love your favorite musicians, there is a limit to the amount of debt you are willing to take on for them.”

“Consumers don’t like the idea of ​​dynamic pricing, but in the last few years since the pandemic, we’ve seen a new ‘YOLO’ (you only live once) mentality, which is increasingly about taking risks in times of crisis. “It’s encouraging a more discretionary approach to spending on discretionary experiences,” said Greg McBride, chief financial analyst at Bankrate.com.

Despite tight household budgets, “there are just some experiences where consumers have drawn the line and said, “That’s not something I’m going to give up,” he said.

Ticket sellers are also well aware of this psychology.

“Our research consistently shows that concerts are a top discretionary spending priority and one of the last experiences fans hold back,” Live Nation said in its 2023 quarterly earnings call. said.

But consumers are willing to pay more to see their favorite artists and groups, meaning dynamic pricing is here to stay, at least for now.

“The live music sector has been leaning toward this attitude for a long time,” said Northeastern University’s Mohr.

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