The Twins announce their Opening Day 25-man roster, which can change with any injuries, etc.
Carl Pavano, Francisco Liriano, Nick Blackburn, Scott Baker, Brian Duensing, Joe Nathan, Matt Capps, Jose Mijares, Dusty Hughes, Kevin Slowey, Glen Perkins, Jeff Manship, Jason Kubel, Jim Thome, Joe Mauer, Justin Morneau, Tsuyoshi Nishioka, Alexi Casilla, Danny Valencia, Michael Cuddyer, Denard Span, Delmon Young, Jason Repko, Drew Butera, Matt Tolbert
The Twins will complete their spring with two exhibition games against the Atlanta Braves at Turner Field 6:05pm tonight on the MLBN and 11:05am Wednesday on FS-N.
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The real reason that got me going tonight and wanting to post was the information release I saw about "Demand Based Pricing " or essentially dynamic pricing. Please note that this is going to be a controversial topic and it is going to be opinionated. Hence, I guess a blog :)
DBP put simply, is the Twins way of capturing additional revenue they would lose otherwise to the potential secondary market. The Twins will have Digonex's Sports and Entertainment Analytical Ticketing System (SEATS™) run algorithms to determine what the value of a particular seat should be based on "demand."
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The Twins are starting DBP in two of their sections Home Plate Box and Home Plate View.
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As long as demand is high, the Twins can fluctuate the "face value" of a ticket and charge you more based on this demand. Likewise, when demand is low, you can find a better price, however, as long as the Twins are winning and demand is high, expect to pay more than what you are already paying. No need to find a scalper with availability, the Twins will be able to sell you an available ticket at essentially secondary market pricing.
As a business model, this is wonderful. The Twins are going to capture more revenue, however, what happened to the model of bringing the family out to the ballpark?
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For instance, let's say you are wanting to go to the NYY game on August 20. The Twins already know that demand for this series is going to be high. Let's say you want to buy a pair of incredible seats for that special occassion and you want to splurge on the seats. Also, you want to surprise grandma with a pair of tickets, but do not want to break the bank either.
So, it is now March and tickets are about to go on sale, woohoo!! You are looking to buy (2) Home Plate Box (HPB) seats with a normal face value of $65/ticket and (2) Home Plate View (HPV) seats with a normal face value of $28/ticket. However, since SEATS has run an algorithm and shows that demand is high, the Twins can raise the fee of both sets of seats to what they feel is "demand" pricing.
Now, those HPB for that special occasion with an original face value of $65 are now $90/ticket and HPV for grandma are now $40/ticket. As the tickets are in your "shopping cart" you start to have 100's of thoughts going through your mind. Do you buy now while demand is high, or wait until demand is low?? What if there are no tickets left when you finally decide to go ahead? What happens if you go to search again, will the Twins system shut you out???? OH, THE MEMORIES!!! But they're in your shopping cart, they're at your finger tips, just put in your damn credit card information and stop thinking!!!!
Okay, you finally decide to purchase both sets of tickets and your total for the DBP is $260 + $20 in service fees for $280.00 total. You are feeling good about securing those tickets to that "high demand" game and you are looking forward to "surprise" the spouse and grandma.
However, a moment later, you realize you spent $280 for tickets priced in your pocket calendar from the Twins Pro Shop showing a price of $186 +$20 service fee for $206. Without thinking fully at the time of purchase, you spent an extra $74. You may be feeling a little sick about this at the time, but you are somehow grateful that you secured these tickets and did not have to find a "scalper" later, right?
Heck, great move! Warm weather is upon us and the tickets for the game is sold out by the Twins. Scalpers are charging $110 for the HPB tickets and $55 for the HPV tickets you purchased 5 months ago. By buying early, you saved $50!! Now you can use that $50 "savings" (minus any interest you could have made on that $280 you spent 5 months ago, well I guess that would be $.56 in today's market) and use that toward some $8 beers at the game, and maybe a Field Dog or two. Please remember, instead of paying the scalpers $124 over original face, you are paying the Twins $74 over original face.
However, here is the "real story," as it never seems to work out the way you want it to. As game day is approaching, August 20 is forecast as mid-60's with high overcast and a strong potential for rain. The Twins still have some inventory, as demand has dwindled, as the Yankees are no longer the dominating force in the East and the Orioles have taken control. With demand low and no one wanting to go to that once March projected high demand game, the Twins are forced to drop ticket prices to get butts in the seat for that game.
The tickets in the HPB to where you paid $90/ticket has dropped to $35/ticket and the HPV seats that you paid $40/ticket has dropped to an all-time low of $22. What an incredible deal, right? I mean, you paid $280 in March and now I can basically walk up to the Twins Box Office and get comparable seats for a $114 + $0 Service fees because I am going in-person and avoid those charges!
So, let me get this right, you paid $280 back in March because the Twins algorithm convinced you that was what the tickets would be worth? Well, the game is 3 days away and I am only paying $114 (40.7%) of what you paid for the same game, 5 months ago. Boy, I am glad I waited and will see an okay game in bad weather, but I will make sure I flaunt this great deal to every Twins fan at the game, while I get peanuts chucked at me.
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As a Season Ticket Holder (STH) to 2 sets of seats, this is bad for us. I do not purchase tickets to get rich and sell on the secondary market, however, I would be lying to you if I said I have not done this before.
However, I first try to sell to friends at face value (less than you would pay the Twins and there $10+ service fees). I have tickets to ensure that I get to see a few games each year that are more attractive and ensure that I have a similar location to where I am comfortable and know people around me.
However, on those dates to where I know I will be unable to go due other obligations and if those dates happen to be a cold day in April/September, I am left with 2 tickets that I paid $90 for, while the Twins can DBP there tickets for $30/ticket.
I am then, as a committed STH, out tickets that I can barely give-away, as the Twins can sell these same tickets at 33% off of what I paid back in October. I would be better off donating to charity and getting a tax write-off.
Let me be clear, the scenario of the "big savings" on an inclement weather game sounds great, however, who really wants to go out and watch a Twins game in the cold-wet-rain? I mean, heck, people "scored" a great "deal," but I would much rather be sipping Coca-colas in the comfort of my own home knowing I really "saved" my time and money.
I am just awaiting the Minnesota Twins spin machine to start in the media with none other than Dave St. Peter.
Feel free to share your opinion in the comments section, as this topic is something I am really opinionated about and would love to discuss!
It's late and I just realized another abbreviation meaning of HPV :)
ReplyDeleteTK,
ReplyDeleteI've pondered the business model and wondered what would happen if they expanded this model to the whole stadium. I have similar ponderings with respect to racino and expansion of gaming beyond reservations.
Obviously, everybody is of limited means. Are people spending their sports 'budget' and then stopping? If they make it more expensive, do they simply spend their limit and quit?
Right now, it appears that the Twins are only going to be pricing dynamically in 2 pricing groups to test the waters.
ReplyDeleteAnother club, the San Francisco Giants did similarly last year and now have gone stadium wide.
I have a feeling the Twins will be going this route next year and the spin will be placed heavily on that it is for the fans, while fans notice their bank accounts are being diminished.
Since I mention the Giants, we can go ahead and look at this in action.
If we looked at a low demand mid-week game against the Giants weak divisional opponent, Arizona, you will see that a “View Left Field” is at a reasonably priced $8.00
http://purchase.tickets.com/buy/MLBEventInfo?agency=MLB&pid=6906617&tfl=San_Francisco_Giants-Schedule-2011_Giants_Schedule-na-x0
Compare that to a weekend series against cross bay inter-league rival Oakland, you will see that price now jumps 500% to cost $40.50.
http://purchase.tickets.com/buy/MLBEventInfo?agency=MLB&pid=6906599&tfl=San_Francisco_Giants-Schedule-2011_Giants_Schedule-na-x0
Here is an overview that you can compare ticket prices to between all games:
http://sanfrancisco.giants.mlb.com/ticketing/dynamic_pricing.jsp?c_id=sf&m=5
It is tough to figure out their Season Ticket Holder (STH) pricing model, but it appears that there is no set “Face Value.” The Giants are coming of a World Series Championship and are feeling good about their chances to keep butts in the seats, but how long can the momentum occur.
It would be interesting to see what the STH are paying for each game and what “value” they are getting from their investment?
As far as budget, that is a huge part of this. The Twins are trying to capture your bottom line and spinning this as that they are trying to limit scalping. However, in fact, they are becoming the largest scalper.
It amazes me how people are paying these outrageous secondary market prices. I purchased tickets from a few scalpers last year and never did I pay more than 15% below face value. However, those traveling from greater distances do not have that luxury to purchase on game day and have to make an early commitment. Those are the fans that are really losing in this instance.
If people would not purchase tickets from the secondary market, prices would be forced to drop, or scalpers would have an abundance of tickets that are not worth only the paper they are printed on.
As an STH, I have a limited budget that I set almost a year in advance and I save up until our payments are due as early as when the Twins are knocked out of the playoffs. Never a good feeling right after the season, especially given their recent history…
If not a season ticket holder, a person who was able to secure a game during a public sale, or a person who has been lucky to find decent secondary market pricing, I would be okay saving my money and watching the game at home or at a sports bar. (The whole TV situation is another thing, which I will not get into right now, as Twins fans will now have to have cable to 150+ Twins games this year).
We are in the midst of seeing a shift to where we are going to see ticket prices continually to increase to a breaking point and it will push more and more people away from the game with tighter budgets. I wonder how much the Twins Community Fund ticket donations are going to cost the youth this year?
All of this is moot, as people are going to pay the prices, whether high or low, and the Twins will be able to pat their bottom line. However, fans are going to be hurt by increased costs, whether by the Twins or scalpers, and the Twins will make out good in this, as they are only “helping” the fans by controlling prices and lowering fans bank accounts.
I am not sure I entirely understand the problem with this. As a season ticket holder, you initially pay $90 per seat per game and run the risk of gaining money or taking a hit for any games you try to resell on the secondary market, DBP or not. When you buy single game tickets (as the story reads) is when the greatest affect is felt. But in that case you are expecting to go to games and if something comes up last minute preventing you from making the game, you still run the risk of losing money. The Twins are just trying to capitalize on the big dollar days and get more butts in the seats on the low ticket days, thus bringing more revenue. It's a business after all and I don't blame them.
ReplyDeleteWe complain when individual ticket sales cost too much. We complain when the secondary market is outrageous. With DBP the Twins don't have to guess at what prices should be, it lets the fans decide. Look at New Yankee Stadium. They were plagued by empty seats because they asked too much for them. Had they had a DBP system, there may have been** more butts in those seats behind home plate during its first season.
**Side note: Thats a STRONG "may have been".
I have a hard time believing that prices will snowball out of control. DBP doesn't determine the price, the fans do. Each person places a value on a ticket for a seat in the house and if that price is too high then they don't buy. If they don't buy then the system is forced to adjust down. All DBP does is adjust to that willingness to spend. Fans are (mostly) smart enough to know what's too high of a cost. But if the prices do get out of hand, we don't have anyone to blame but ourselves.
Sure, when you buy single game tickets via DBP or if you are forced to be a secondary market buyer this leads to a potential for more money spent (and lost as demand plummets). But those are risks we take when we create demand. With a fancy new ballpark and a successful team, we can't honestly expect that $3 college ID nights and $5 general admission would last.
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ReplyDeleteAs a Season Ticket Holder, it is my hope to attend as many games as possible, avoiding service fees and knowing when I sit each game.
ReplyDeleteWhen demand is high, this is a great advantage to me, as I do not have to worry about whether or not I will be able to get into the game.
However, when the demand is high, I am not going to be asking family and friends to pay higher prices than what the original value is to games I am unable to attend.
Likewise, when demand is low and the Twins are charging $25 less for comparable seats I have, it is going to be a lot tougher for me to sell to family and friends, as they will go with the cheaper option and go with the Twins.
Having season tickets is a risk, but it is not a business decision I make, it is a personal one.
If demand becomes low, which it inevitably will, I will be forced to almost be forced to not renew tickets, because I will be able to save money by awaiting to buy the same seats at a savings. I will just have to wait and see what the Twins do with their loyal STH.
I never stated that it was not a smart business decision; it is an incredibly profitable one.
I just miss the old days when you could go to the ballpark and enjoy the game and not worry about your bottom line.