REVENUE PER SEAT VS. AVERAGE TICKET PRICE

Do you use Average Ticket Price to measure success on your shows?  If yes, please stop, it is a façade.

I (probably like you) have always used average ticket price as a measuring tool.  It is what we learned and it makes sense.  That is until Jim McCarthy, CEO of Goldstar Events did some simple math on a whiteboard and the light bulb went off.  We (concerts, sports, theatre, family, etc.) should be looking at Revenue Per Seat, not Average Ticket Price.

Lets say you and I were playing a show at your local arena and tickets were $500.  We sold 4-tickets to our family members but the rest of the 15,000 capacity room goes unsold.  What’s our average ticket price?

Average ticket price is calculated by taking your show gross and dividing by the number of seats you sold…so your average ticket price in the above scenario is $500 even though the promoter will be eating Cup of Noodles for a while.  Average Ticket Price = gross / number of seats sold.

Revenue Per Seat = gross / total number of seats.  This formula gives you much more accurate data as you are counting unsold tickets as selling for $0.  Average ticket price doesn’t really tell you anything…especially standing on its own.

In music and live entertainment, we talk about moving to a dynamic pricing model similar to the travel industry.  Well, airlines measure Revenue Per Seat while hotels and cruises, Revenue Per Room.  The average doesn’t tell them how full their properties are, just how much they are getting per sale.  It is a number that doesn’t really mean anything.

As the Blues Brothers once said, “we are on a mission from god”.  Our mission is to use revenue per seat versus average ticket price.  Please remember, although we are used to looking at the gross and average ticket, it doesn’t tell you what you need to know.  It doesn’t tell you anything.

Please share this mission with everyone!

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One Response to “REVENUE PER SEAT VS. AVERAGE TICKET PRICE”

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