With Passbook App, MLB Takes Dynamic Pricing To Next Level

Major League Baseball announced Tuesday that 13 teams will accept mobile tickets this season via Apple’s Passbook app. Passbook is “designed to store membership cards, tickets, coupons and boarding passes — a bit like a digital wallet.”  Fans who purchase tickets via MLB’s AtBat app can send that ticket information directly to Passbook, which stores the ticket bar code for use at the ballpark gate.

Via GigaOM, here’s what it would look like on your iPhone.

RoyalsPassbook

The Giants, Mets, Red Sox and Royals participated in an MLB-Apple pilot program at the end of last season. During that two-week trial period, 12% of single-game tickets purchased through AtBat were stored in Passbook. Apple was criticized for Passbook’s lack of usability when the app was first released last September, so the 12% participation rate was encouraging. The app was updated to increase usability with the release of Apple’s new iOS 6.1 software.

MLB identified seven additional teams that will accept tickets via Passbook this season, including the Twins, Orioles, Brewers, A’s, Pirates, Tigers and Cubs. Two more teams are expected to join before the start of the season on March 31.

Of the eleven teams we know will accept mobile tickets via Passbook, eight use dynamic pricing on single-game tickets: Twins, Brewers, A’s, Pirates, Cubs, Giants, Mets and Royals. As I explained in this post from January:

Dynamic pricing uses algorithms to measure demand and price sensitivity to a particular game on a real-time basis. Many factors are considered, including the weather, a winning or hitting streak, the debut of a hot prospect and the price tickets are selling for on the secondary market, like StubHub. Pricing consultants crunch the numbers and then the teams to decide whether to raise or lower the ticket price for a particular game and by how much.

MLB didn’t tout the link between the Passbook app and dynamic pricing, but the two go hand-in-hand. With dynamic pricing, teams can respond quickly to changes in supply and demand. When ticket demand is low — a Tuesday night game in August between the Giants and the Rockies, for example —  the Giants can lower ticket prices on the day of the game and bring more fans to the ballpark. A fan in San Francisco checking out pre-game information on AtBat will see the lower ticket price and can decide instantly to purchase it, send it to Passbook, and head to the ballpark without stopping to print an electronic ticket.

There are several reasons why MLB may not have talked about the Passbook-dynamic pricing connection in its announcement. I emphasize the word “may” because these are just educated guesses on my part. First, not all the teams that will accept mobile tickets via Passbook use dynamic pricing. And not all dynamic-pricing teams have signed up for Passbook. MLB may not have wanted to want to muffle the Passbook-launch message.

But, more importantly, MLB may have chosen to avoid a clash with StubHub, its partner in secondary-market tickets. The ease of purchasing and using single-game tickets via AtBat and Passbook — without any need for an additional step of printing the electronic tickets — may result, over time, in more fans looking for day-of-game deals on AtBat. I could be wrong on this, but it’s a hunch.

For those of you with non-Apple smart phones, your mobile-tickets-on-the-phone may not be too far away. While iPhone and iPad users make up 70% of the AtBat market, the number is shrinking, according to MLB Advanced Media CEO Bob Bowman. Samsung announced yesterday the development of a new Wallet app, which will perform many of the same functions as Passbook. And who is one of Samsung’s partners on the new Wallet app? MLB Advanced Media.

I’ll be following the story as the season progresses. If you use Passbook with MLB ticket purchases, drop me a line at hangingsliders@gmail.com and let me know about your experience.





Wendy writes about sports and the business of sports. She's been published most recently by Vice Sports, Deadspin and NewYorker.com. You can find her work at wendythurm.pressfolios.com and follow her on Twitter @hangingsliders.

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Garrett
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Garrett
Matt Bertelli
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Matt Bertelli

That’s pretty interesting mainly because the teams can see your spending habits and try to offer you deals and incentives to get you to comeback or buy more stuff that you might be interested in.

TKDC
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TKDC

Interesting that the Nats are spending all this time trying to see how they can give discounts to people who obviously don’t care about how much they spend at the ballpark, considering it takes only minimal effort to get tickets to virtually any game for less than the season ticket price.

Collecting information also brings into play a growing and evolving legal framework on privacy and disclosure. Many people are creeped out by businesses tracking them, and an opt-out that if it follows past MLB philosophy likely has to be unchecked more than just once during the life of the relationship will certainly annoy many fans.

It seems to me that the much better idea would be to partner with financial institutions to offer deals to anyone that uses plastic to buy tickets or to buy food/merchandise at the game. You would have a wider audience, you would allow the real experts in this field to do the work, and you would likely avoid criticism as any ill feelings would much more likely be aimed at the cardholder’s financial institution.

And one more thing on my rant – dynamic pricing is great and all, but how about listing the actual price you pay for a ticket (like StubHub has started to do more and more), instead of having to guess how many fees and how much extra you’ll have to pay.

philosofool
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philosofool

I would think the reason that the Nats are doing this themselves rather than hiring a firm to do it for them is that there’s a lot of non-standard information that they want to use which a firm would need to integrate into their analytics to get the Nats the information that they want. Examples of such information include ballpark promotions, seat location, starting pitchers, opponent team, opponent team division, etc. I would imagine that an outside firm would be happy to set all this up for you, but it would be expensive and then you would continually have to pay them whenever you added a new variable or wanted some new information.

Alternatively, you can develop it in house, spin-off the work to BIS, and get paid for developing it.