This Friday, January 10, 2015, the British government announced that it wanted to better regulate the prices of resale tickets for cultural events. A consultation with the public and entertainment stakeholders will be launched. In the viewfinder, in particular, the famous “dynamic pricing”. Reread this article to better understand this work of the devil :
The British may tolerate frost or rain, but sometimes even he ends up becoming indignant. Across the Channel, people are rumbling about the insane price of tickets for Oasis concerts next year. And more precisely of the system which allowed such amounts: dynamic pricing. It is this system which, when the ticket office opened on Saturday, boosted certain tickets with testosterone, initially priced at 150 pounds (178 euros) and offered at more than 350 (415 euros).
How does it work? The higher the demand, the higher the price. Nothing new in appearance: no one will be surprised that caviar is expensive, given its rarity and the famous “law of supply and demand”. But – and this is the trickery – the price of sturgeon eggs is fixed before the start of the holidays. Whereas during the online sale of Oasis tickets, the price changed in real time. That’s dynamic pricing. Pretty demonic, right?
An imbalance to the disadvantage of the consumer
Philippe Crevel, economist and founder of the economic research and strategy company Lorello Ecodata, regrets the process: “As the price is not fixed in advance, consumers are missing crucial information, because the price is one of its guides essential purchases. » If some caricature dynamic pricing as the paroxysm of uninhibited capitalism, he sees it more as “a drift and a distortion. This system is not liberal, because it does not respect the balance of information between supply and demand, to the disadvantage of the consumer.
“Dynamic pricing addresses a recurring problem: what to do when there is more demand than supply? », underlines Sylvain Bersinger, chief economist at the Asterès firm. In this kind of situation – as is the case with Oasis, where hundreds of thousands of fans rushed for tickets – there are basically only two other options. The draw, an option notably implemented for ticketing for the Olympic Games. And “first come, first served”, which can be seen in concerts in France.
A system already existing in France
Where these two means present a certain fairness, “dynamic pricing will necessarily exclude the less fortunate. In the end, only the one who has the strongest willingness to pay remains: either the biggest fan of the group, or the richest,” recognizes Sylvain Bersinger.
If, for the moment, concerts in France are spared from the phenomenon, you have probably already been confronted with dynamic pricing, whether for booking plane flights or your train tickets. Who has never seen the price of a ticket skyrocket in a few hours?
Arguments for?
Sylvain Bersinger lends himself to the game of devil’s advocate: “Supporters say that in other alternatives, many tickets end up being resold at full price, sometimes even higher than what dynamic pricing would give. And with this, the money has the merit of going back to the group or the event, and not to unscrupulous sellers. » Events that use this infernal machine naturally garner more revenue. Up to 30% additional for football competitions, according to Malika Séguineau, general director of Ekhoscenes, the main union of performing arts producers, in Les Echos.
Another advantage is that dynamic pricing works both ways. With the SNCF, we will certainly be able to choke on the price of a Paris-Biarritz in August, but also rejoice that it is only 30 euros in October.
Customer acceptance, the limit of the system
However, the system is subject to numerous criticisms. In the United Kingdom, Oasis-gate has even become a state affair. No less than 450 consumer complaints were filed, and Lisa Nandy, the Minister of Culture, promised to work to establish a “fairer” system. The government will include the “subjects of transparency and use of dynamic pricing”.
By causing controversy – such fan strangulations had already been observed at the ticket offices of Taylor Swift or Bruce Springsteen – will dynamic pricing, which is becoming more and more popular, hit a glass ceiling? , that of consumer acceptance? “If you leave it entirely to the market, it will create frustration for the customer,” admits Sylvain Bersinger. “Sometimes you have to act, or limit the system a little.”
Philippe Crevel confirms: “It would be desirable to regulate this type of practice. Even for the SNCF, it is not normal to see a ticket become four times more expensive for exactly the same service. We cannot justify increases to this extent, and prices that are so variable – and unknown to the customer” Don’t Look Back in Angerthe future will perhaps be a little less hellish.
