Posted: 2024-09-05 18:59:50

Live Nation chief executive Michael Rapino was unequivocal at the company's earnings call earlier this year.

"It's dynamic pricing, right? It's just pricing smarter," he said.

"It may be as simple as just figuring out how to reprice. A Tuesday night in Phoenix is worth different than a Saturday night in LA."

Mr Rapino was selling the concept of dynamic pricing — a relatively new pricing model that would allow Live Nation's company Ticketmaster to charge more for tickets when demand surged.

A mock up of the live nation and ticketmaster logos on a phone

About 450 complaints were made to the UK advertising authority about the ticket sale. (Reuters: Dado Ruvic)

It had already been rolled out across the US, and Rapino had his eyes firmly set abroad.

"[It's] being a lot smarter the way you can price your inventory — price the front better so the back sells out," he said.

"Outside of the US, we're in the first inning — so we're just rolling this out around the world.

"We've had it in Europe, but still in infancy stages, and we're going to expand to South America and Australia."

A website on a computer screen which reads "You're in the queue" and also says "There are 551 people ahead of you"

The website for purchasing AFL finals tickets includes a queuing function. (ABC News: James Carmody)

Dynamic pricing in action

Thousands of kilometres away and months later, John from Burnley in the United Kingdom was experiencing the pricing model firsthand.

He told the BBC he was in the queue for Oasis tickets for six hours before he and his family were finally able to buy tickets.

Looking to buy standard tickets — which were originally billed at 135 British pounds ($260) — he said he was outraged when the price jumped by more than 200 British pounds.

"You can't spend your whole day online trying to buy tickets expecting to pay one price, and you get to the front of the queue and it more than doubles," he said.

"It's outrageous."

More surges flagged for Down Under

Dynamic pricing is also already happening on a smaller scale in Australia, with events like the Australian Open and Formula 1 Grand Prix already using the ticketing model.

It's also regularly used by airlines and ride-share businesses, which have previously attracted criticism for surge pricing during the Lindt siege on Sydney.

Artists including Taylor Swift, Ed Sheeran and the Cure have chosen not to use dynamic pricing in recent years, while Bruce Springsteen and the E Street Band were criticised for using the model in 2022.

Live Nation said it was up to artists and events whether they would employ the model when selling tickets.

A spokeswoman for Ticketmaster said:

"Ticketmaster does not set the price of tickets. Artists and teams set prices that make the most sense for them, and Ticketmaster executes the pricing strategy — whether market or fixed price."

A large crowd of people moves past a train station. Australian Open flags are visible in the sky

Tickets for the Australian Open earlier this year soared into the thousands when dynamic pricing was applied. (AAP: Lukas Coch)

The company also defended the practice as a way to prevent ticket scalping.

"It's important to clarify that on Ticketmaster there is not an algorithm that changes prices — artist teams work with promoters to determine ticket prices before they go on sale," she said.

"As production costs rise and scalpers continue new tactics to cheat the rules, pricing some seats closer to market value ensures artists and their crew can continue putting on shows."

The Australian Competition and Consumer Commission (ACCC) did not confirm whether it had been notified about Live Nation's plans to expand the pricing model in Australia.

But the consumer watchdog did say it was aware of its use in other local industries.

A woman wearing a glittered leotard sings into a micropone with one hand raised

Taylor Swift opted to not employ dynamic pricing when selling tickets for her Eras Tour. (Reuters: Christine Olsson/TT News Agency)

"Forms of dynamic pricing exist in some markets," a spokeswoman said.

"For example, airfare and accommodation pricing.

"Some businesses increase their prices during periods of high demand.

"This practice is not illegal, but businesses must be clear about the price consumers will pay.

"Whether or not a business's 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."

University of Melbourne professor Philip Clarke said while he understood consumer anxiety around the expansion of dynamic pricing, it was entirely legal in Australia.

"Essentially it's just varying a price throughout the day or week in response to fluctuating demand, and there's nothing illegal about a business doing that, so long as it doesn't misrepresent what its price is," he said.

"In most cases, if the consumer makes an offer to buy at a certain price and the seller can accept, or they can increase the price.

"For example, if you wanted to buy my car and I advertised it for $100 and now I want $200 for it, there's nothing unlawful about that."

Professor Clarke said the expansion of the practice in Australia would concern him if it enabled price gouging.

"There's certainly going to be cause for concern if it facilitates price gouging, and it's not obvious that it will," Professor Clarke said.

"If suppliers merely vary their price depending upon the demand they're receiving, it's a reasonable response to normal competitive and consumer pressures."

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