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What rock stars can teach us about pricing

This NPR article about Kid Rock provides an interesting look into his strategy to fend off scalpers and let his fans attend his concerts at low cost: since scalpers benefit from scarcity (which allows them to put a steep markup on tickets for resale), Kid Rock schedules more shows in the same city (eight in Detroit alone, for instance), so that more of the demand can be met on the primary market. The goal is for the shows to be close to sold out but not quite.

Kid Rock and his team also raised the prices on the best seats in the house (called the platinum seats), traditionally targeted by scalpers. To sit in these seats, you must also show ID and the credit card you used when buying the tickets. In addition, the first two rows are reserved for "die-hard fans" only, although the article doesn't explain how those are identified. The journalist also points out that less money spent on tickets means more money left to spend on drinks and merchandise, and the rocker gets a percentage of all those sales too.

Is it working? A Ticketmaster employee suggests that it is. You can learn about revenue management in the unlikeliest places.

More insights on revenue management in music here and here.

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