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With Passbook App, MLB Takes Dynamic Pricing To Next Level

Posted By Wendy Thurm On March 1, 2013 @ 9:00 am In Daily Graphings | 17 Comments

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.


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