Rolling Stones Concert Promoter on ‘Flex Pricing’ Ticketing Strategy: ‘I Want the Brokers Pissed Off’
(from Billboard.biz, May 07 2013) According to John Meglen, Co-President of AEG Live Subsidiary Concerts West and Promoter of the Stones’ 50 & Counting tour, the price adjustments on the Stones shows nationwide reflect a “flex pricing” strategy to keep tickets out of the hands of brokers. Meglen said that the reports of deep discounting and sluggish sales are inaccurate, and the shows are coming off well. “It’s unfortunate in our business that everybody wants to be cynics. The fact is, the tour is doing great and we have no problems whatsoever,” Meglen says.
Right now the tour is on pace to gross close to $100 million for 18 shows. Meglen explains that certain tickets in the lower bowl are “flex priced,” going up at the top P1 price of $600 at on-sale and moving to the second tier of $450 when and if sales stall.
The strategy is designed to gauge what the market will bear for lower bowl seats and to keep those tickets off the secondary market by upping the risk and cutting into the profit margins for brokers. This specific practice is not new, particularly with the Stones, but this time the added dimension of the flex pricing elements for tickets in the back half of the lower bowl.
John Meglen explains, “[Our] philosophy was, if we would’ve charged $200 a ticket for every seat in the house, everybody would have said, ‘OK, that’s fair.’ We’re selling 240- 260- degrees, about 15,000 tix (per), and that would have been about a $3 million gross [per show], but when you showed up that night, the actual gross would have been well over $5 million because of what the brokers got. So if I had 15,000 tickets out there at $200, if the brokers could take 6,000 of my seats that I charge $200 for and charge $750, that’s $3 million [per show]. Why should they get that money?”
In another strategic move, only 1,000 paperless tickets per show were available on RollingStones.com and the band’s social sites priced at $85, with those seats largely located in the upper bowl but “peppered” with prime seats in the GA “tongue and lips” pit up front.