The mystery of the M’s new pricing scheme
Something’s been bugging me about the M’s ticket pricing scheme, and I’ve been thinking about it ever since it was announced without solving it. The M’s business side is great at making money off its fan base, so ‘m sure that there’s some reasoning here that I’m just not seeing. I hope that one of our readers with more of an economics background might have some insight.
Why does the M’s new ticket scheme attempt to get more money out of the most price-sensitive customers?
I understand variable pricing for games, in which they hike the cost of certain games to take advantage of demand for particular products people are willing to pay more for, like Opening Day or Yankee games. Makes perfect sense from a business standpoint. If you know there’s a huge additional demand for those games from people who want to only attend those games (a Yankee fan isn’t going to attend the M’s-Rangers game to cheer on his team even if the tickets are far less expensive). And since there are only a limited number of tickets, the M’s don’t have to figure out how to get those fans to self-identify and pay more while selling as many as possible (by offering a Seattle discount that’s unlikely to let the Yankees fans with money get in for cheap: half off for students of local colleges, for instance, or with purchase of another set of game tickets). Demand-based fleecing, I totally understand.
And I understand why season ticket holders, who pay for the full year, get a discount. If you make the season cheaper, they’re more likely to buy tickets they wouldn’t have if they bought individually, you reduce sticker shock a little and allow them to think of it as a savings, you bank the revenue early, and when you get fans to drag themselves to the park because they already bought tickets, those fans drop even more money on high-margin parking, food, and drink.
What doesn’t make sense to me is the advance-purchase discount. The Mariners draw from a spectrum of customers, which runs:
– rabid Mariner fans who greatly prefer seeing a game in person to any other form of entertainment
– Mariner fans who strongly prefer to see a game compared to other forms of entertainment
– Casual fans who like to see a few games a season
– Fans who go because the team’s winning, or it’s a beautiful day to be at Safeco Field, or there’s a Moose-related giveaway, or whatever
The further you go down the spectrum, the more likely a fan is to seek a different activity based on price. That’s obvious, right? The more interested you are, the more you’ll pay for that activity.
That’s what baffles me. The people who are interested in day-of-game tickets, who now pay a penalty compared to the people who book months in advance, are far less likely to be willing to pay a premium. Someone who isn’t a strong Mariner fan will look at the new ticket prices, compare them to bowling or seeing a movie or whatever their other options are for that weekend, or that night. That premium may be what pushes them towards a casino or wherever. The M’s are deliberately making themselves more expensive to the fans most likely to go for other choices, while the people who are more likely willing to pay a premium – after all, if you’re looking at the schedule this early and trying to find good matchups and dates, you’re at least informed and interested – escape the increase.
The only reason I’ve come up with is that they believe that fans will be willing to pay more later, during the season, than they are today. In which case, it’s a bet that the team will be competitive and that will create interest and demand in walk-up sales (and short-term advance purchases).
That seems unlikely, though — it’s a pretty huge gamble for the business, and they’ve traditionally acted pretty conservatively in their desire to maximize profits.
Can anyone offer any thoughts into what might be going on here?
Please, don’t tell me the M’s are dumb, or otherwise make ridiculous comments. There’s a substantive discussion here, and I’d like to have it.