Music Festival Ticket Price Sensitivity.

How to price tickets for music festivals is challenging for many organisers because demand and sales revenue are inherently linked to it. Organisers must find the right balance between generating ticket sales revenue and covering operating costs. What ticket price sensitivity factors should organisers consider when setting their ticket prices for forthcoming events.

Price sensitivity is a key fundamental of the most basic ‘economics’ theory and applies to any market not just music festival ticketing. Often referred to as Price Elasticity of Demand (PED), it is the measure of how much ticket sales volumes will fall or rise in reaction to a price change. The music festival sector is a dynamic market where ticket buyers constantly change what they are looking for. With the current cost of living crisis in many countries festival-goers are probably looking for increased value for money rather than prestige high value experiences.

Increased Price Sensitivity.
Anecdotal research suggests that in the In the UK and United States that there is a sharp music festival attendance decline when a weekend ticket exceeds 25% of a median weekly wage. This relates specifically to the 18-25 demographic who will always have lower disposable income than older age groups. This may be problematic for many large-scale festivals whose core audiences are in the 18-25 age group. The niche genre music festivals generally experience less ticket price sensitivity because they are probably offering something unique that is not available elsewhere. Large mixed genre music festivals are plentiful providing greater choice for festival-goers who are more sensitive to price fluctuations.

The Science of Pricing.
Economists use a variety of complex formulas to determine price sensitivity in a given market which they will refer to as price elasticity. Festivals that experience an ‘Inelastic Tail’ generally have low sensitivity to price changes because they belong to festival-goers ‘bucket list’ of events to experience and ticket buyers will pay any price to attend. (Glastonbury and Tomorrowland for example). The bulk of music festivals will fall into the ‘Elastic Tail’ category because of the competitive landscape that gives festival-goers a wide choice of similar events. For these festivals a small increase in price can cause a significant drop in ticket sales because festival-goers can choose an event with a similar line-up at a cheaper price. Many organisers invest time and resources to understand how their ticket prices (and seasonality) impact on sales and often requires significant testing over a number of years.

Tips to Drive Ticket Sales Without Changing Price.
Organisers conduct pricing research continuously to understand how price impacts ticket sales volumes, but they can also use psychological tools to influence how prices are perceived by potential ticket buyers. Simple tactics like using 199 rather than 200 can make a difference because the brain processes the left digit number 1 first, making it feel significantly cheaper. Another tactic is to use anchoring where a high VIP price is positioned next to a cheaper General Admission price which makes it appear like a bargain by comparison. Using the FOMO (Fear of Missing Out) principle organisers can use a number of tactics to influence tickets sales with the most common being the ‘Early Bird Discount’.

Tips to Reduce Ticket Price Sensitivity.
In recent years, the music festival sector has seen a significant increase in payment plans with a variety of options available for festival-goers. Small deposits to secure tickets with split payments over 6- or 12-month period can help spread the cost of ticket purchase. Offering a payment plan to potential ticket buyers can increase overall sales significantly because festival-goers focus on the monthly cost rather than the total outlay. Organisers are also getting more creative with bundling packages where a number of additional services (camping, parking and transport) are included in a single price which works out cheaper than buying each one separately. Festival-goers are increasingly aware and concerned about organisers using surge pricing (price gouging) with dynamic pricing systems that increase prices as demand increases. It is preferable for organisers to stick with transparent fixed price tiers as it increases loyalty and future repeat purchases.

For festival organisers planning their next event using a software management platform like Festival Pro gives them all the functionality they need manage every aspect of their event logistics. The guys who are responsible for this software have been in the front line of event management for many years and the features are built from that experience and are performance artists themselves. The Festival Pro platform is easy to use and has comprehensive features with specific modules for managing artists, contractors, venues/stages, vendors, volunteers, sponsors, guestlists, ticketing, site planning, cashless payments and contactless ordering.

Image by Tumisu via Pixabay

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