The painful reality of 'dynamic pricing'

Opinion editor's note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.

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When we think about Ticketmaster and its "dynamic pricing" model, an old joke comes to mind: A guy walks into a haberdasher's and says he wants to buy the hat in the window. The proprietor says, "That will be $12, sir."

The man protests that a store across the street sells the same hat for $10. Our haberdasher politely suggests that the customer take his business across the street. The customer replies, "I would, but they're sold out."

Well, says the haberdasher, "When I'm sold out, I'll sell it for $10 too."

Like the haberdasher, Ticketmaster keeps an eye on demand and charges the prices it thinks the market will pay. Bruce Springsteen's fans are numerous enough, and dedicated enough, that Ticketmaster thinks it can charge $1,000 or $2,000 — in some cities, even $5,000 for prime seats — for tickets to one of the shows on his 2023 tour. To fans who have seen Springsteen and the E Street Band relatively recently for an admission fee in the low three figures, this pricing structure comes as a shock.

Ticketmaster explains its practice in terms that make it sound almost principled. Dynamic pricing, it says on its website, is a way to ensure that the artists and event organizers are paid in accordance with their true market value. It gives customers a "fair and safe" means of acquiring choice seats. It's akin to the practices of hotels or airlines, which charge varying rates according to the demand on any particular day.

In figures released last weekend, Ticketmaster asserted that most of the tickets it has sold for the Springsteen shows have gone for much less than $1,000. The average price has been $262, and only 11% have been sold according to the higher "platinum" pricing scheme, according to the company. An Xcel Energy Center seating chart on Tuesday revealed a few seats available for the March 5 show in St. Paul at less than $200, but a greater number at higher prices, as much as $2,230 apiece.

Even at that, the Ticketmaster website carries a warning up front: "Ticket prices may fluctuate, based on demand, at any time. Resale ticket prices may exceed face value."

It's hard to fault an artist for seeking to receive whatever the market is willing to pay for his work. Mozart died in poverty, Van Gogh did the same. Recognition of one's value at the height of one's career is a high achievement, and the just rewards of that achievement are, among other things, money. Lots and lots of money.

But there are rewards besides money, too. Anyone who's been to a Springsteen concert knows that there is a communication, even a sort of communion, between the Boss and his people. "We're gonna build us a house tonight," he promised a London audience in 2009. "We're gonna take the fear that's out there and we're gonna build a house of love. We're gonna take the doubt and we're gonna build us a house of faith tonight. We're gonna take the despair and we're gonna build us a house of hope."