In 2024, 'Dynamic pricing' was a top contender for word of the year due to its impact on consumers.

• In 2024, Oxford University Press' shortlist for word of the year included "dynamic pricing."
• The recent surge in demand for popular concert tickets, like Taylor Swift's Eras Tour, has brought dynamic pricing back into the spotlight.
• The U.K. is investigating Ticketmaster for its use of dynamic pricing in the sale of next year's reunion concerts from Britpop band Oasis.

While Oxford University Press named 'brain rot' word of the year, 'dynamic pricing' was also a top contender.

The publishing house stated on its site that dynamic pricing, first introduced by economists in the late 1920s, involves adjusting the price of a product or service based on market fluctuations, specifically by charging a higher price during periods of high demand.

In 2024, there was increased attention and debate regarding the practice of dynamic pricing, particularly when it pertained to obtaining highly sought-after event tickets.

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Dynamic pricing was used in some high-profile cases to set prices for concert tickets, resulting in fans paying high prices to see their favorite artists. In some cases, fans waited for hours in a virtual queue before realizing how much they would be charged, leading to concerns about the transparency of dynamic pricing practices and the value for money.

How and when artists use dynamic pricing

The U.K. is investigating Ticketmaster for its use of dynamic pricing in the sale of next year's reunion concerts from Britpop band Oasis.

The North American leg of Oasis's tour will no longer include the practice of charging more than double the face value of tickets without warning, as many fans complained about it on social media.

According to HITS Daily Double, Jay Marciano, CEO of AEG Presents, stated in October that Taylor Swift refused to dynamically price her Eras Tour tickets because she didn't want to hurt her fans.

In an interview this fall, Robert Smith, the lead vocalist and guitarist for the Cure, stated that dynamic pricing is "driven by greed," and he called the practice a "scam."

The use of dynamic pricing in the music industry is at the discretion of the artist or management, according to Andrew Mall, an associate professor of music at Northeastern University, and it is often determined under the radar.

"Dynamic pricing has become a top priority for concert goers due to the increasing number of high-profile tours," he stated.

'A capitalist inevitability'

"Concert tickets are typically priced at a fixed rate, unlike Uber or Lyft fares which can be more expensive during certain times of the night."

Slowly, however, a change was taking hold.

In the 21st century, revenue from recorded music has decreased, while revenue from live music events has increased. By the mid-2000s, concerts became a larger source of income for performers than record sales or publishing royalties, according to economist Alan Krueger. The live music industry experienced a 25% revenue increase in 2023, as reported by Statista.

In 2011, Ticketmaster launched an early version of dynamic ticket pricing, which is now the norm for live music ticketing sales. Recently, "ticket sales went wild" due to post-pandemic pent-up demand and a surge in mega-star stadium tours, according to Bennett.

"It's understandable why it's tempting," he remarked. "The live music industry is consistently leaving money on the table that fans would pay. Dynamic pricing is a capitalist inevitability due to the forces at play, but I don't want my daughter to have to pay $1,000 to see Taylor Swift."

Ticket-selling platforms often charge higher prices for tickets based on demand, regardless of consumer preference.

"As Matt Schulz, LendingTree's chief credit analyst, stated, "It's not very popular, as you might expect. Businesses and musicians are trying to see what the market will bear, which makes things really difficult for the consumer.""

Chalk it up to 'funflation'

Recent reports indicate that younger adults, specifically Generation Z and millennials, are willing to go into debt to attend live events, despite complaints about the rising prices.

A recent study from Bread Financial revealed that nearly two out of five Gen Z and millennial travelers have spent up to $5,000 on tickets alone for destination live events.

"It is crucial to recognize your boundaries," Schulz stated. "While you may be passionate about your favorite musician, there should be a limit to the amount of debt you are willing to accrue for them."

Why dynamic pricing won't go away

According to Greg McBride, chief financial analyst at Bankrate.com, consumers are increasingly adopting a "YOLO" attitude towards spending on discretionary experiences, despite their initial dislike for dynamic pricing.

Despite tight household budgets, consumers may have a breaking point where they refuse to sacrifice certain experiences.

Ticket sellers are well aware of this mentality, too.

Live Nation stated in a 2023 quarterly earnings call that concerts are a top priority for discretionary spending and one of the last experiences fans will cut back on, according to research.

As consumers prioritize seeing their favorite artists or groups, dynamic pricing will likely remain, at least temporarily.

For a long time, the live music sector has embraced this mindset.