Pivotal to Ticketmaster’s strategy is their use of dynamic pricing. That phrase has been thrown around a lot by unhappy redditors and critics of Ticketmaster alike, but what is dynamic pricing exactly?

Dynamic pricing is a form of price discrimination. Rather than charging customers a fixed price for a product, price discrimination seeks to better match supply and demand by charging different customer segments different prices based on their willingness to pay for a product. There are several degrees of price discrimination, and dynamic pricing is a unique category which sees prices adjusted based on various market conditions. Dynamic pricing is used for a variety of industries including airplane tickets, transportation services like Uber and Lyft, and, of course, concert tickets.

According to Pricefx, there are several types of dynamic pricing strategies, including time-based pricing, demand-based pricing, surge pricing, personalized pricing, and segmented pricing. Ticketmaster’s approach to dynamic pricing is primarily demand-based, which adjusts prices “according to market’s supply and demand dynamics.” For Ticketmaster, this translates into a “model in which prices go up and down in real time based on the level of interest and the number of seats available.” The data that Ticketmaster considers when setting their ticket prices isn’t public knowledge, but dynamic pricing in the live events market generally considers historical sales data, available seats in the venue, proximity to the stage, pricing on the secondary ticket market, seasonal events, and whether an event is during an off or on-peak time slot.

Dynamic pricing can be frustrating and appear predatory, as many Coldplay fans discovered last week. However, there are also arguments to be made in support of dynamic pricing. Ticketmaster has defended their pricing model by stating that it “‘enable[s] artists and other people involved in staging live events to price tickets closer to their true market value.” And, as Adam Hayes from Investopedia points out, dynamic pricing and its elements such as peak pricing are crucial tools to control the forces of supply and demand:

“If periods of peak demand are not well managed, demand can far outstrip supply. In the case of utilities, this may cause brownouts. In the case of roads, it may cause traffic congestion. Brownouts and congestion are costly for all users. Using peak pricing is a way of directly charging customers for these negative effects. The alternative is for municipalities to build up more infrastructure in order to accommodate peak demand. However, this option is often costly and is less efficient as it leaves a large amount of wasted capacity during non-peak demand.”

Without dynamic pricing, artists and venue managers would lose out on a great deal of value that dynamic pricing allows them to capture. And, while venues could in theory be built to accommodate peak periods of demand, it is far more efficient and far less wasteful to instead upcharge customers to bring demand down. 

Nonetheless, Ticketmaster, their dynamic pricing strategy, and their business model as a whole came under fire in late 2022 during Taylor Swift’s The Eras Tour, as described by Eden Arielle Gordon of PopSugar. Extraordinarily high demand for tickets led to a technical breakdown akin to the recent Coldplay debacle: fans who had registered for the presale experienced “hours-long wait times that resulted in technical glitches, as well as presale phases that were rescheduled or canceled.” Ticketmaster eventually ran out of tickets and had to cancel the general ticket sale entirely. Many fans who managed to snag a pre-sale ticket had to pay price tags in the thousands due to Ticketmaster’s dynamic pricing, and resale tickets sold for as high as $22,000.

Swifties and U.S. federal lawmakers alike took serious issue with Ticketmaster in the wake of this scandal. Many, including Rep. Alexandria Ocasio-Cortez and Sen. Richard Blumenthal, called out Ticketmaster and Live Nation for their monopolistic power. AOC in particular made a call to action to break the two companies apart. Meanwhile, Jennifer Korn from CNN reported in March of 2023 that Taylor Swift fans were suing Ticketmaster for their accused “‘unlawful conduct,’” with the intent for each fan to receive “a penalty of $2500 for each violation” against antitrust laws that Ticketmaster committed. Bill Donahue from Billboard reports that, as of December 2023, this lawsuit remained ongoing, though a similar lawsuit from Swiftie Michelle Sterioff had been voluntarily dropped by Sterioff shortly after Sterioff and Ticketmaster had been in talks of reaching a settlement.

On top of multiple antitrust investigations sparked by the Eras tour fiasco, the U.S. Department of Justice recently took legal action against Live Nation and Ticketmaster, as shared in a May 2024 Press Release. The DOJ filed a civil antitrust lawsuit against Live Nation and Ticketmaster “for monopolization and other unlawful conduct that thwarts competition in markets across the live entertainment industry,” including “exercis[ing] its power over performers, venues, and independent promoters in ways that harm competition,” and “impos[ing] barriers to competition that limit the entry and expansion of its rivals.” Overall, the DOJ’s goal according to this lawsuit is to “restore competition to the live concert industry, provide better choices at lower prices for fans, and open venue doors for working musicians and other performance artists.”

Several artists have also taken what little action they can to combat Ticketmaster on their own terms. In the midst of the Eras scandal, Taylor Swift was very vocal about her disappointment with the ticket company, and she worked with Ticketmaster to help “a select number of fans” receive another attempt at buying tickets. In a similar vein, Coldplay is planning to sell a limited number of Infinity Tickets for their North American shows this November. These Infinity Tickets are priced at just $20 CAD each and sold to a select few fans at every Coldplay concert “to make the tour accessible to fans for an affordable price,” as reported by the Toronto Sun.

Yet these individual actions from artists may seem like a Band-Aid for an industry that is bleeding out from monopolistic practices and extortionate prices. Others may argue that Ticketmaster is completely within their right to limit competition and utilize dynamic pricing to maximize their profits. Ultimately, the DOJ’s lawsuit against Ticketmaster will show how far regulators are willing to go to listen to consumer outcry and enforce competitive practices.