Primary Vs Secondary Ticket Pricing Case Study

Primary v. Secondary Ticket Sales

Introduction. Resale markets for sports tickets have gone through extraordinary changes in the past 20 years. Large online resale tickets marketplaces have dramatically reduced search costs and condensed everything you need to one platform. Consumers are now only a click away from browsing through a wide range of ticket inventories to countless events. It has gotten to the point where some teams have even started integrating these primary and secondary ticket markets to offer fans a singular location where they can browse through these large inventories of tickets, sold by other fans, brokers, and the teams themselves. The primary ticket market is where the tickets are being sold for the first time and at face

To understand the ticket market, you must first have an understanding in ticket pricing. There was a time in the not too distant past where all ticket prices were pretty much the same. Those days are now gone. Teams and venues are now looking for price differentiation and price elasticity to better target fans. The two main approaches team s have taken are Variable Pricing and Dynamic Pricing. Variable Pricing occurs when ticket prices are set in advance based on several conditions such as opponent, round of play, time of day, day of the week etc. This only occurs before the tickets are put on sale. After variable priced tickets are made public to consumers, there are no changes. On the contrary, in dynamic pricing, teams set an initial price, but it is not fixed in time. From the moment the tickets are put on sale to the time the event or game starts, the price may change. The fluctuation of the price will be a response to a variation in demand. There are many factors that play a role in dynamic pricing such as weather conditions, injuries, availability and many other. Dynamic pricing is also heavily used on the second market by brokers who change prices based on these factors. There are even some platforms that use formulas to use dynamic pricing to change prices in real time based on availability and amount of time away from the start of the game. Dynamic pricing is heavily used in the hotel and airline industries as well. It seems pretty obvious to

However, some leagues such as the NFL have used other platforms for their primary ticket sales. Ticketmaster has been the leagues primary ticketing partner since 2008 by using NFL Ticket Exchange by Ticketmaster. The typical buyers of primary tickets are fans, who purchase season tickets or individual game tickets and attend these events. There are also brokers who purchase primary tickets with the intent of selling these tickets on the secondary market for generally higher than the face value. As defined by the National Association of Ticket Brokers Online ticket brokering is the resale of tickets through a web-based ticket brokering service. Prices on these ticket brokering websites are determined by demand, availability, and the ticket reseller. Some fans will also purchase tickets on the primary market to re-sell on the secondary market for a profit or sell season tickets for games they are not able to attend. In past years primary tickets have been printed tickets with a face value printed on them and are physically exchanged. However, with the recent advance of technology there has been a rise in electronic tickets. Ticketmaster just recently signed a five year deal with the NFL to have the first fully digital ticketing system in sports. Primary tickets are non-refundable, but they are transferable. There are also regulations that put restrictions on the sale of paper