Thursday, April 7, 2011

Airline Pricing, Extreme Couponing, And Ticket Prices (That Bear)

Ken Davenport has a conversation about ticket prices:

"NAMELESS PERSON," I said, "Can I ask you something?"

"Sure, Ken."

"Have you seen a movie in the last month?"

"Well, yes, I have."

"Have you seen more than one movie in the last month?"

"I've seen two."

"Ahhh, I see. But you can't afford the theater, right? You just spent at least $25 on movie tickets. You know about TDF, right? You know about 20at20, right, where you can see shows for $20?"

He didn't answer.

I could have pressed on . . . "Did you have popcorn when you were at the movies? Oh, and do you drink Starbucks? Watch Netflix?"

But the point wasn't to embarass him . . . the point was to demonstrate how the problem isn't price. The problem is value.

Or complexity.

Ken Davenport has at times cited airline pricing as a model ("You've heard me say before how closely related the theater industry is to the airline industry, right?" from that last post).

I've lived in this city five years now, and I still have yet to have seen a show on Broadway. Like Ken's nameless person, I am fully aware of some of those things (I have never heard of 20at20, admittedly, but I know about TDF and the TKTS booth and student rushes). But I'm just too tired to fight to get a discount.

Honestly, although I would never pay full price to see a show, I would probably pay $20 to see Bengal Tiger in the Baghdad Zoo. But I don't have the effort of mind to go figure out how I can do it most cheaply.

Since Ken likes Airlines, let me tell him the one thing that makes Airlines the worst is this incredible feeling that you have no idea what you're going to pay, and a sneaking, burning suspicion that you could have paid less.

I recently was looking at round trip flights to Prague, and the first time around I used Expedia to look for a round trip. $1200ish. Then I realized that if you put in "Flights" into Google with a date range, it lets you look the same flights up on five or six competitors. Suddenly the cheapest flight was $700.

Then I futzed around, and I saw a flight for $400. A round trip flight to Prague. $400.

Why was it so low? Because I had accidentally made the date range "Tonight." Meaning that airline tickets become about 66% off the day of the flight. At least, Turkish Airline tickets to Prague that connect for twelve hours in Istanbul...

These sites try to take the illusion and guesswork out of airline pricing tickets. But there's still confusion, not knowing how much you're going to pay. I also don't know if Turkish Airlines charges $9 for bathrooms, or $25 for every extra pound of fat on my body.

To return to theater pricing, we are comparing our pricing model to movies. Everyone knows exactly what a movie costs. You can roll up off the street, pay $12, spend two hours, and then roll out. No planning required. If it's sold out, there's probably another one directly after it.

Not so with theater! Shakespeare in the Park is free, but you have to basically commit a major part of a day to getting the ticket. It's like the people who buy out a music concert within minutes of it opening. They eat up the enthusiasm of the casual fan.

Now, to Ken's credit, he actually designed somewhat of a solution to this: an app called At The Booth. It does for Broadway what Expedia does for airlines. But like Expedia, it's not a perfect solution, and it may not be enough to overcome the psychological block of the audience.

(And trust me: the psychological block is incredible. I live off the Bedford stop of the L. I have a harder time convincing people who live in Manhattan to take ONE STOP across the river than I think I would have if I asked them to rob people...)

Instead, being able to guarantee low prices to everyone means that people won't be discouraged not to apply simply because they aren't "in" enough to know they can get it for cheaper.

Theater is entertainment, not extreme couponing.