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What is dynamic pricing and how does it work? It made Oasis ticket prices soar

There Oasis reunion and the consequent tour announced by the historic band formed by brothers Noel and Liam Gallagher has sparked excitement among fans around the world, causing ticket prices to skyrocket. Advance tickets for the 17 UK dates planned for 2025 they literally sold out. What really shocked the followers of the historic band, who unexpectedly reunited on August 27th, however, was the price of the tickets. Many have reported how this has increased rapidly, even during the purchase procedure on Ticketmaster (currently the only platform authorized to sell tickets), going from 135 to 350 poundsThe story has understandably raised quite a bit of controversy, rekindling the debate on the phenomenon of dynamic pricinga sales technique that, through the use of ad hoc algorithms, recalibrates sales prices based on a series of factors, first and foremost demand. Let’s take a closer look at what it is, how this practice works, and why the European Commission is investigating.

What is dynamic pricing?

The dynamic pricingor dynamic pricingis nothing new. In fact, it is a sales technique already widely used in sectors such as airlines and hotels. This strategy involves the use of algorithms to change prices in real time (dynamically, in fact) based on current demand and other factors. If the demand for a good or service increases, the price increases; if demand decreases, the price also tends to decrease accordingly. This system is known to adapt to numerous variables: not only the volume of requests, but also details such as the time of the search, the device used to access the site and even the location from which you are browsing can influence the final price.

As time has progressed, this technology has begun to involve new sectors, including live events such as concerts and theater shows. This type of pricing allows companies to optimize revenues, adapting in real time to fluctuations in demand. Although legal in many countries, it is a practice that is often controversial because it can penalize consumers, especially in situations of high demand, as in the case of the unexpected Oasis tour.

When can dynamic pricing be considered illegal? When prices are changed during the consumer’s purchasing phase.

How the Dynamic Pricing System Works

The How dynamic pricing works is based on complex algorithms that analyze variables such as supply, demand and user behavior in real time. When an event, such as an Oasis concert, attracts huge amounts of attention, fixed-price tickets tend to sell out quickly. From that point on, the price of the remaining tickets can increase significantly. In some cases, prices can quadruple compared to the initial ones, as happened during the pre-sale of the British band’s concerts.

In addition to direct demand, the algorithm can take into account factors such as the location of access, the device used and the user’s browsing history. Using third-party cookies and other tracking technologies, the system can predict whether a user is willing to pay more or less, based on their previous purchasing experiences. In practice, two users accessing the same site at the same time could see different prices for the same event. This makes dynamic pricing an extremely flexible technique, but potentially discriminatory if not managed transparently.

Why it is so controversial and the repercussions on live music

One particularly criticized aspect concerns theprice increase even after a ticket has been added to the cartbefore the final payment. This dynamic has raised concerns among consumers and has led some authorities, such as the Competition and Markets Authority of the United Kingdom, to investigate the legitimacy and transparency of this system.

Also Lara WoltersDutch MEP, told the British newspaper The Guardian of wanting new laws for protect European consumers from price inflation caused by practices such as dynamic pricingand he did so in these terms:

The only winners in this situation are the big ticketing platforms, at the expense of the fans who find themselves excluded from concerts. Companies know much more about their customers than the other way around. This is not a system that seeks to maximise joy by filling the stadium with an artist’s biggest fans, but to maximise profit from music as from any other product. As a music fan, I find this soulless and want to put an end to it, so I am pleased to see that the UK government is considering this issue and I expect the new European Commission to follow suit, so we can finally introduce new rules against unfair ticket sales.

On the other hand, those who support dynamic pricing, such as Ticketmasterstates that Dynamic pricing practice serves to counter secondary ticketingthat is, the resale at inflated prices by online scalpers. The reasoning that the platform uses, in essence, could be summarized in these terms: “It is better that the extra profit goes directly to the organizers and artists, rather than feeding unregulated parallel markets.”.