GS Paper - III
The UK-based band Oasis said it would add two more shows to its upcoming UK and Ireland stadium tour, citing “phenomenal demand”.
The incident has also turned the spotlight on ticketing company Ticketmaster’s controversial dynamic pricing model, drawing the attention of the United Kingdom’s Competition and Markets Authority (CMA) and the European Commission.
What is dynamic pricing?
- Dynamic pricing is based on the law of demand in economics. As the demand for an item increases given the supply stays steady, its price will also increase.
- Other factors like the presence of competitors and customer behaviour also influence prices.
- For instance, ride-sharing companies like Uber and Ola use “surge pricing” where increased demand for services (say during peak traffic hours) results in higher charges.
- Airlines also actively use dynamic pricing to charge different passengers different prices for the same seats, depending on when tickets were booked, the popularity of the flight route, and so on.
What is Ticketmaster?
- Ticketmaster is a major American ticket sales and distribution company. It manages 82 per cent of the major amphitheatres and 78 per cent of the highest-selling arenas in the US, according to data from the American Economic Liberties Project.
- Following its 2010 merger with Live Nation, then the biggest concert promotion company, the combined Live Nation Entertainment has virtually established a monopoly in the concert world.
- This status has allegedly allowed the company to exploit its market position. A 2018 investigation from The New York Times showed that LiveNation Entertainment pulled shows in 2013 from the Atlanta Gwinnett Centre to punish the venue for switching to a competitor.
