How to charge for the Big Day Out?

World's tallest buildings in 1884

47,000 tickets for the Big Day Out at Flemington race course sold out within minutes of going on sale at 9am on Friday. Tickets for the Sydney and Gold Coast events also sold out in record time. The organisers have arranged an additional event in Sydney (tickets on sale October 11).

The issue of how to deal with excess demand is a common one in cities, whether it’s concerts, road congestion or the (until recently unfamiliar) problem of public transport congestion.

As I went through the stressful process of buying tickets for the Big Day Out for my son (successfully as it turns out), I got wondering if ‘first-in, first served’ is really the ideal way to go about selling tickets for such a high-demand event. The organisers appear to think it isn’t.

They made a decision on Friday, apparently on the fly, to hold back 3,000 tickets for the Melbourne event. These will now be made available via a randomly drawn online ballot conducted once a week for ten weeks. Prices will be the same as they were for the original sale.

The organisers quite clearly could charge more than $164 per ticket (including booking fee), so why don’t they? It could be that they’re simply not very good at estimating people’s willingness to pay for a particular set of bands, or perhaps it’s such a black art that they’re not prepared to take too many risks. Or it might be that they’re in it for the long haul and don’t want to alienate concert-goers from returning in future years – they might want to protect the “brand”. Read the rest of this entry »