College Football Dynamic Pricing Model

[HandoEX]

My boss is a huge Blue fan, and was "lucky" enough to be offered general admission tickets for the Buckeyes game when they went on sale through the universtity two days ago. Through the ticket office, they were $295 per ticket! I wonder how long before this concept spreads across college sports? I imagine it will generate tons of money for the school and the scalpers will be the ones losing out.

http://www.mgoblue.com/tickets/dynamic-pricing.html

Michigan The Michigan Athletic Department is the latest sports property to implement dynamic pricing for single-game ticket sales. Currently, more than half of the 30 Major League Baseball teams utilize dynamic pricing, in addition to NBA and NHL franchises and today, the University of Michigan becomes one of the early adopters of dynamic pricing in the NCAA.

By using advanced computer programming, dynamic pricing makes adjustments based on factors such as team performance, visiting team's performance, weather forecast and remaining ticket inventory in specific seating locations.

Dynamically priced single-game tickets will never move below season ticket prices ($65) and generally increase over time as inventory decreases. Fans that purchase tickets early are more likely to get the best pricing.

"Dynamic pricing is a practice that has become standard across the sports and entertainment industry after gaining acceptance through airlines and hotels," said Hunter Lochmann, chief marketing officer for Michigan Athletics. "Pricing dynamically will allow us to adjust single-game ticket prices upward or downward based on real-time market conditions with the biggest factor being fan demand."

Revenue from dynamic pricing, like all ticket revenue, will go to support U-M's 31 teams and 900-plus student-athletes, including the South Campus Athletics Plan.

[Tatanka]

My boss is a huge Blue fan, and was "lucky" enough to be offered general admission tickets for the Buckeyes game when they went on sale through the universtity two days ago. Through the ticket office, they were $295 per ticket! I wonder how long before this concept spreads across college sports? I imagine it will generate tons of money for the school and the scalpers will be the ones losing out.

http://www.mgoblue.com/tickets/dynamic-pricing.html

We just lost the neulion system. Shit, can you even imagine that piece of crap trying to implement a truly dynamic model?

[HerdBot]

If supply and demand says people will pay 300 bones hell yeah

[HandoEX]

We just lost the neulion system. Shit, can you even imagine that piece of crap trying to implement a truly dynamic model?

I don't think a third party would control the pricing, the univesity would probably be in complete control of the model once the algorithms and computer system are developed. The school most likely has someone inputting data into the system based on past demand for tickets, future predictions (win-loss predictions, opponents, etc) and current developments like acts of God or weather.

[Tatanka]

I don't think a third party would control the pricing, the univesity would probably be in complete control of the model once the algorithms and computer system are developed. The school most likely has someone inputting data into the system based on past demand for tickets, future predictions (win-loss predictions, opponents, etc) and current developments like acts of God or weather.

Right. if someone was manually updating the prices, I can see it happening even with this POS neulion system. If it's algorithm based and automatic based on some sort of formula, I don't think the 80387 math co-processor that pairs up with neulion's current server (definitely a 386-33, running Windows 3.11) can keep up.

[IndyBison]

Right. if someone was manually updating the prices, I can see it happening even with this POS neulion system. If it's algorithm based and automatic based on some sort of formula, I don't think the 80387 math co-processor that pairs up with neulion's current server (definitely a 386-33, running Windows 3.11) can keep up.

I guarantee the neulion's servers are more current than that. They are probably only made to support their normal load. It's like the revenue they make from this one 3-hour event would cover the cost of increasing capacity. And it wouldn't sell any more tickets. It would just sell them faster. They gain nothing financially by selling them in 30 minutes compared to 3 hours. If they had that kind of volume on a regular basis then it would make sense to increase the infrastructure.

One thing NDSU could possibly do is put all the single-game tickets on Ticketmaster. I'm guessing that would be much more expensive for the athletic department so ticket prices would also go up.

[Tatanka]

I guarantee the neulion's servers are more current than that.

No wai...

[BlueBisonRock]

I guarantee the neulion's servers are more current than that. They are probably only made to support their normal load. It's like the revenue they make from this one 3-hour event would cover the cost of increasing capacity. And it wouldn't sell any more tickets. It would just sell them faster. They gain nothing financially by selling them in 30 minutes compared to 3 hours. If they had that kind of volume on a regular basis then it would make sense to increase the infrastructure.

One thing NDSU could possibly do is put all the single-game tickets on Ticketmaster. I'm guessing that would be much more expensive for the athletic department so ticket prices would also go up.

Its quite likely that they are using virtual servers. This would allow them to add a capacity bump for a short period of time. Personally, I would put the performance (ave and peak) on an SLA with a stick / carrot clause for days like this one. Bet it would perform then.

[IndyBison]

Its quite likely that they are using virtual servers. This would allow them to add a capacity bump for a short period of time. Personally, I would put the performance (ave and peak) on an SLA with a stick / carrot clause for days like this one. Bet it would perform then.

I agree but those additional virtual servers or SLA bump would be an expense with 0 ROI. Unless NDSU would lose money by people not buying tickets because of frustration over the ticket system they have no reason to increase that expense.

[BlueBisonRock]

I agree but those additional virtual servers or SLA bump would be an expense with 0 ROI. Unless NDSU would lose money by people not buying tickets because of frustration over the ticket system they have no reason to increase that expense.

Client Satisfaction. All the seats may be sold but other contributions remain to be earned. I ran into a similar scenario when I ran a services business. Resources are constantly being reallocated with the dynamics of a server farm. My contract with the server folks stated both an average response and responsiveness at peak. Lets just say they only missed the SLA once.