Being located in the “Heart of Dixie,” and like many Alabamians being a rabid college football fan, the following story caught my eye today, for two obvious reasons:

Price of SEC football seats soars (Birmingham News)

The cliffs notes version is this: college football tickets are getting more expensive.  The article doesn’t mention any fan outrage, partially because there is not enough to speak of. Ticket prices are the way that teams are funded, and better teams, larger stadiums, better coaches cost more (Alabama fans definitely know this). In fact, the only team mentioned whose attendance has suffered since ticket prices started climbing a decade ago is Tennessee.

What we’re seeing in this scenario is a simplified version of dynamic pricing. If fans are willing to pay more for a ticket, the ticket price can (and should) adjust to meet a level that approaches the limit of willingness to pay. Does this exclude some folks from being able to see games? Yes. Is that wrong? No. This is a tough pill for some fans to swallow, but it is the free market at work.

If we think of the goal of any live entertainment event to generate as much revenue as possible, then we can further deduce that increasing attendance is critical to meeting that goal, even if it means that some tickets are priced higher than others (50 yard line, for example) while others are offered at a level below common face value (the “nosebleed” seats). Based on attendance levels, the price should adjust to fill as many seats as possible. If, for example, attendance did start to suffer, colleges would lower prices again to draw fans back to the gate.

Currently, the secondary market performs this pricing equalization clumsily and in a fractured fashion. But the days of the secondary market as a discreet market are numbered. In the future, software like the models we’re piloting now will do this job on behalf of the venues, keeping all of the revenue currently lost to the secondary market in the hands of promoters, artists, and venue owners. Let me say that a different way – easier pricing and a full house almost every time. You’ll hear much more about dynamic pricing in the future on this blog and in our press releases, so stay tuned for this exciting technology.