Seth Godin had an interesting take on pricing and market disruption. He noted that books, records, and other products often have uniform pricing that doesn’t really reflect the demand. You might have found a Harry Potter book was a little more expensive than another novel with the same page count on another shelf, but generally the pricing was in an expected range with similar books. That is still pretty much the case now.
The same holds for ticket prices at the movies. There may be some popular movies where the theater won’t allow passes and the IMAX screening may be more expensive than the conventional screening of the same movie, but the ticket price is pretty much the same for every movie you want to see.
Godin says that when a company disrupts the stability of a market, the backlash generally isn’t based on economics but at the introduction of instability.
When concert tickets went dynamic, the backlash wasn’t about economics. It was moral outrage. Artists who adopted surge pricing weren’t just changing strategy; they were declaring themselves to be a different kind of person. The fans noticed.
Amazon didn’t share publishing’s allergy to profit. Ticketmaster didn’t share the old promoter’s loyalty to fans. They weren’t optimizing within the culture—they were violating it.
[…]
… But if you want to understand why things cost what they cost, don’t ask what’s efficient. Ask what kind of person would be embarrassed to charge more. Or embarrassed not to.
There is definitely a lot that arts and cultural organizations need to do differently to shift to post-digital business model. It also bears considering that there may be a benefit in positioning aspects of the experience you offer in contrast to those things causing outrage.
Clearly, there are some people who value an experience enough to hold their nose and swallow their outrage long enough to achieve the desired end or companies wouldn’t continue to operate in this manner. There is also the issue of a situation persisting long enough it becomes a norm everyone accepts.
But the norm can allow quite a bit of space in which to operate. When you are able to promote an experience as an opportunity to relax and unwind, or a time to stimulate your kids’ imagination and creativity–and legitimately deliver on that promise–you are offering something of value. Often it is the loyalty to fans and customers other companies discarded.
