In recent years, the phrase, ‘to do a Radiohead’ has no longer come to represent a retreat into wilful obscurantism following a peak period of success. Ever since the Abingdon School alumni released their album In Rainbows as a pay what you like download in 2007, the concept of allowing the buyer to decide on price has become an occasional feature of the market for goods and services.
Gary Andrews’ anguished plea for common sense on football pricing produced two posts for us in recent months and a number of examples of ‘pay what you want’ were highlighted – Morecambe allowed free entry for their match with Dagenham and Redbridge, promptly seeing an increase in their average gate from 1,961 to 4,029, while the weather prevented Brentford’s experiment with a minimum charge of £1 for the Yuletide clash with Stevenage.
With behavioural economics all the rage, there has been a cautious welcome from market analysts to these initiatives and the advantages can be many.
First, a feeling of trust can be engendered between buyer and seller – I may well choose to pay the full recommended price of £12 for football journal The Blizzard even if I could actually pay as little as £6 – lavishly produced and yet run on a shoestring budget, there is a feeling that paying the optimum will keep a good cause going – similarly, not a few Portsmouth fans would doubtless happily pay over the odds to ensure the continued survival of their favourites.
Second, calculating a fair price can be an awkward business – fellow blogger Lloyd would see a fiver to get into Old Trafford as more than he would be prepared to pay, while for many, the chance to savour the atmosphere at the ‘Theatre of Dreams’ would be worth several hundred pounds. Letting the buyers state how much the experience is worth to them can save a club an onerous administrative task.
Third, the concept of buyer’s remorse goes out the window – if you’ve paid £2 to see a 1-0 home defeat by Walsall in driving rain, you’ll feel better about it than if you’d forked out £20 – complaints directed to club secretaries will diminish and any doubt that a product is worth its price is eliminated – apart from the hog roast stand outside the Madejski Stadium where the retailers should by rights be paying the customers for making them put up with such troublingly substandard fayre.
The mechanisms are ingenious and extend well beyond music and football – Brentford’s experiment deployed a charity component with 50% of the difference in proceeds going to Sport Relief. Indeed, the Bees advertised their scheme as ‘pay as you can’ rather than ‘pay what you want’, the implication being that you really still should pay a good amount of money because it’s a moral imperative – had the west Londoners’ partners been Comic Relief, punters may well have been deterred from paying more, such is the unwatchable nature of that organization’s output.
However, thus far incursions of ‘pay what you want’ into football’s landscape have been limited – why is this?
The book Smart Pricing by Jagmohan Raju and A. John Zhang identified several areas where the policy worked best and few of these apply to football – ‘pay what you want’ can prosper where there are 1) fair minded customers, 2) strong relationships between buyers and sellers, 3) a product sold credibly at a wide range of prices, 4) a product with a low marginal cost and 5) a very competitive marketplace
Fans are ‘fair minded customers’ only in as far that they are blindly loyal/gullible. A hard core of 6,000 or so can be relied upon to watch Oxford United whether the price is £10 or £25 – waverers are only a little more likely to head along to the Kassam at the lower rate – and I speak as a resident of the city. It’s therefore not worth the U’s reducing prices.
As for strong relationships between buyers and sellers, Blackburn Rovers fans may have no time for Venkys or Shebby Singh, but they remain wedded to the blue and white halves so in that respect, the policy may have legs – equally, football tickets are certainly sold at a wide range of prices although the justification for this becomes harder in this era of almost universally perfect sightlines (I’ll ignore the need for binoculars from the away section at St. James’ Park).
As for the last two conditions, football is far from available at a low marginal cost while the marketplace is the opposite of competitive – you won’t catch Aston Villa fans decamping en masse for the Hawthorns because it’s cheaper to get in. Indeed, the downsides are many and perhaps illustrate the failure of ‘pay what you want’, relatively new concept as it is, to really catch on in football.
Above all, efforts so far gave been sporadic and tokenistic – exhibiting the same kind of one shot publicity with which Budweiser have besmirched The FA Cup. ‘Pay what you want’ can seem like a desperate roll of the dice in order to attract new custom – the kid who enjoyed that game at Morecambe might have his attention deflected from Championship Blackpool and come back for the next game at a regular price, but is there much evidence that this actually happens?
Equally, Radiohead could naturally afford to indulge themselves – few League 2 accountants could contemplate the likely hit on revenue – there’s also little doubt that the first to lose their jobs when the balance sheet gets icky will be those backroom staff who can least afford it.
To continue the ‘haves and have nots’ theme, the whole thing can be seen as an example of price discrimination – there’s a danger that the 60,000 seats at the Emirates could be occupied entirely by those who could afford upwards of a hundred quid, with long standing season ticket holders suddenly unwelcome. That said, the reality will probably be the opposite, with most choosing to pay less than what they do no – leading to falling revenues.
In other industries, schemes have been met with confusion, most notably a policy at US baker Panera Bread’s St. Louis store, while a number of exponents of ‘pay what you want’ have actually folded including a Ohio coffee shop and a restaurant in the New York borough of Queens.
So if the concept is well meaning, there is still much work to be done.
Brentford’s charitable endeavour directly lifted this recommendation from research led by a San Diego based assistant professor in marketing, Ayelet Gneezy and provides an element of ingenuity. Similarly, schemes that track individual buyers’ tendency to pay fairly may reward them with special offers or lower regular prices at a later date.
Buying online facilitates this and perhaps the whole concept needs to move beyond ‘pay what you want’ into an all-embracing concept of ‘fair pay’- with individual purchasers’ loyalties tracked and afforded credit – at the moment, too much emphasis is placed on whether a fan is a season ticket holder or not while Norwich fans who made it to Anfield on Saturday surely deserve a serious reduction on their next home ticket, whether they attend Carrow Road regularly or not.
So Brentford’s effort is a laudable one but root and branch reform to football pricing over a consistent time period remains the priority.