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Tickets with Flex
Joe Lemire
February 23, 2009
TO A San Francisco Giants fan, the prospect of watching reigning Cy Young winner Tim Lincecum pitch on a sunny summer Saturday against the rival Dodgers is far more appealing than seeing Barry Zito face the Pirates on a drizzly April weeknight. So why should the price of tickets to those games cost the same? Well, this year they won't.
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February 23, 2009

Tickets With Flex

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TO A San Francisco Giants fan, the prospect of watching reigning Cy Young winner Tim Lincecum pitch on a sunny summer Saturday against the rival Dodgers is far more appealing than seeing Barry Zito face the Pirates on a drizzly April weeknight. So why should the price of tickets to those games cost the same? Well, this year they won't.

Variable pricing is not new; teams routinely charge more for marquee matchups. But the Giants are taking the idea even further by becoming the first franchise to institute what they are calling "dynamic ticket pricing." For every game at AT&T Park, the cost of 2,000 of the hardest-to-sell tickets—in the upper deck beyond the outfield—will fluctuate daily depending on the perceived demand for the seats. The algorithm that sets the price was developed by qcue, a company founded by two University of Texas students; it takes 20 variables—including the day, opponent, scheduled starters and weather forecast—into consideration. The starting value ranges from $7 to $30, and the price will move by increments of 50 cents (but limited to a range of $5 to $50). Selling an extra 2,000 tickets for $5 to 81 games would mean $810,000 in additional revenue, or twice what Lincecum made in '08. "There's too much that happens leading up to the game that affects customer demand," says qcue CEO Barry Kahn.

The Giants, who expect to see a spike in interest when Lincecum pitches, understand fluctuating demand better than most teams. Two years ago Barry Bonds's pursuit of Hank Aaron's home run record led to scalped tickets being sold for roughly five times the face value. The record breaker was hit on a Tuesday night against the woeful Nationals. "It was our softest opponent, the softest day of the week, and tickets were only $10. We could have been charging $50," says Russ Stanley, the Giants' vice president of ticket services. "That's what made the light bulb finally go on."

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