Freemium model in sports: could it work?

[LastWhiteSoxFanStanding]

I hope teams begin to experiment with this. They could still make money on refreshments, parking etc. I'm guessing it won't happen because they are afraid they won't be able to charge for those tickets in the future. But if you are the Royals or Pirates or somebody else who doesn't draw, why not?

Could A Freemium Model Work For A Professional Sports Team? - CNBC

In digital media, Freemium is a business model that allows consumers to utilize a core product or service at no cost (aka Free!). The business then charges a premium for advanced privileges or incremental features.


With a substantial portion of professional sports teams revenues shifting from events to media, perhaps a freemium model (and other digital marketing tactics) could be effective.

Professional sports teams in major US sports have always experimented with innovative ticket promotions to get fans into the seats.

Recently, one popular promotion has been “all you can eat” tickets at certain venues.

Other traditional promotions include price discounts, promotional handouts and pre- or post-game stadium entertainment. But to date, no major sports franchise has implemented a sustainable business model where they give away a substantial portion of their tickets away for free to all of their home games.



Here are the reasons why I think it could work.

Fill Empty Seats



Only the top quarter of teams in each pro sports league actually sell out on a regular basis. That means that most teams often have empty seats to fill. Free admission would increase attendance. Once a fan is at a game there are multiple ways to generate revenue from souvenirs, parking, concessions and alcohol sales. This is the same principle as “all you can eat” in reverse. Fans can come to unlimited games (all you can root) and that would increase all other stadium revenues.


Increase Fan Base

Professional sports has increasingly become a media business as broadcasting rights fees and advertising revenue surpass event revenue. The most effective way to drive more media revenue is to increase the size of the audience. Free tickets will make a team more accessible to its community and should lead to new fan acquisition. New fans may first be drawn to the live experience but, as they become real fans, will then consume the teams broadcasting and media coverage.

Community and Public Relations



The first team to employ a free tickets policy would have a first mover advantage and would probably realize the biggest community and public relations benefit. But any team that decides to go free will have a great story to share. In an era of escalating ticket prices, the respect and admiration for the fan will be a unique angle and positive story that will ingratiate a franchise with the city it calls home. It’s up to the team to keep the product strong and interest high so that fans see real value in their free seats.

Sponsorship Platform


A franchise could offer the free seats up as a sponsorship opportunity for its brand partners. Free seats for each game could be sponsored by a corporate partner. It sure beats current corporate promotions such as the hat that doesn’t fit or a refrigerator magnet.

Of course, all of these benefits would have to offset the lost ticket revenue for this model to make sense. Perhaps a more feasible option would be for a team to give away a specific allotment of tickets or for a specific section within the stadium (the bleachers or upper deck). The tickets would be awarded to the most loyal fans or for new fans that have never previously attended a game.

A loyalty program can also be implemented to build connections with the fans that attend the most games. The more games they attend the bigger fan they will become. This leads to them spreading their passion for the team to friends and building a direct connection to their favorite team.

There are enough geniuses, statisticians and now Harvard MBA’s in sports to develop a financial model to see if this could work. I think it can and I believe we are close to seeing it happen soon. If it ever does occur, here’s to hoping I can snag some free Legends Tickets at Yankee Stadium!

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[albionmoonlight]

This will come off as classist, but I think that one big problem with this is that you will have a . . . rowdier group of fans at the game. I think that ticket prices set some base that self-selects for a more sedate experience. You may have an adverse selection problem here where the fans with money decide to stay home b/c the park becomes over-run by "those" fans.

On a related note, I wonder how much someone who takes advantage of the free ticket will be willing to pay for parking, soda, etc. I think that there might be some psychological sense of "well, I paid $30 for this ticket, so let me go ahead and get some beer and a hotdog, too." Instead of that, you might have a mindset very attracted to the free ticket who then tries to also save money by taking public transit to the stadium, sneaking in food, etc.

[NorvTurnerOverdrive]

corporatism has ruined sports. the need to increase revenue year over year drives up ticket prices and pushes fans out of the stands and into their living rooms. as a result team coverage goes from national or local tv to cable packages.

and they don't give a fuck if a few of the hardcores get priced out. they'll just find some new market in china or europe to exploit. better to have 1 million casual fans than 100k passionates. fuck it.

:looks at old ticket stubs. weeps:

[stevew]

I think the Pirates are missing out by not having like 1 section of shitty seats open for free for anyone who actually dresses like a Pirate.

[stevew]

Dola-
The other way to do something like this would be to sell 10-20 dollar vending vouchers which enable a certain amount of people per game free passage into the stadium.

[SackAttack]

Originally Posted by LastWhiteSoxFanStanding

There are enough geniuses, statisticians and now Harvard MBA’s in sports to develop a financial model to see if this could work. I think it can and I believe we are close to seeing it happen soon. If it ever does occur, here’s to hoping I can snag some free Legends Tickets at Yankee Stadium!

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I guarantee you, if "freemium" were to happen, it would be limited to specific parts of the stadium, generally the seats that are cheaper already. No way the $1000 seats go "freemium," because they lose that revenue with no realistic expectation of being able to recover it in concessions and parking. On a $15 ticket, sure. Not on a ticket costing several hundred-plus.

Even with costs they can control, such as parking, people would find ways around it. Some would spend, say, $400 to park with a free Legends ticket, but many, many more would park outside the stadium and walk in. Hell, I saw that phenomenon many times at Dodger Stadium, and it's $15 to park there now.

The other thing you'd likely see is an increase in the cost of concessions and a crackdown on people bringing food/bottled water into the stadium. If that becomes their primary revenue source, they'll get a lot less friendly about people finding ways to avoid those previously-secondary costs.

No, if this happens, you're ultimately talking about things like Top Deck seats at Dodger Stadium, or the Uecker seats at Miller Park, etc. A section of the stadium which goes "freemium," possibly tied to days of the week when attendance is lower anyway, and seats that don't cost an arm and a leg in the first place. They wouldn't give up their premium seating to that model.

[AENeuman]

Originally Posted by NorvTurnerOverdrive

corporatism has ruined sports. the need to increase revenue year over year drives up ticket prices and pushes fans out of the stands and into their living rooms. as a result team coverage goes from national or local tv to cable packages.

and they don't give a fuck if a few of the hardcores get priced out. they'll just find some new market in china or europe to exploit. better to have 1 million casual fans than 100k passionates. fuck it.

:looks at old ticket stubs. weeps:

hasn't baseball attendance increased every decade? i think the 60's were in the 20 mil range and today it's in the 70 million range. i think baseball has mostly been a living room sport.

[bob]

I've always wondered how the Braves make any money, give the availability of $1 seats and the ability to bring in your own food and drinks.

On top of that, every Sunday is buy one get one free. And tickets are generally cheap anyway. And still no one goes.

[Ksyrup]

Sports is following the larger issues in entertainment, particularly movies, in that staying home is a much cheaper and better experience than going to the live event. We have HD, instant replay, surround sound, etc. There's no need to go to the event - not only is it costly in money and time, but it's generally a pain in the ass. There's not weather to deal with, no traffic, no vomiting/profane fans, etc.

This is why the Dolphins have decided that their primary stadium-filler is not the product on the field, but the stars in the owners box and that they allow to roam the sidelines - getting people to come to games to see what's going on off the field. And similarly, it's why Jerry Jones built an amusement park for his team to play in. That's the future of live sports. Why should they give that away if people (corporations or individuals) are willing to pay? I guess it might make sense to adopt a minor league view of making money for bad teams - make it as cheap as possible to come in, so they spend money while they are there - but otherwise, what's the incentive that go away from supply and demand, when attendance has continued to go up decade after decade (while prices go up)?

[NorvTurnerOverdrive]

Originally Posted by AENeuman

hasn't baseball attendance increased every decade? i think the 60's were in the 20 mil range and today it's in the 70 million range. i think baseball has mostly been a living room sport.

considering the league and the us population has almost doubled since then i'm not surprised.

it all just stinks. teams hold cities hostage for public funding for state of the art arenas on public land then charge out the nose for tickets. then you tune in to the random game and it's a sea of empty plastic seats.

nothing would make me happier than to see some teams go under.

[CraigSca]

Originally Posted by NorvTurnerOverdrive

considering the league and the us population has almost doubled since then i'm not surprised.

it all just stinks. teams hold cities hostage for public funding for state of the art arenas on public land then charge out the nose for tickets. then you tune in to the random game and it's a sea of empty plastic seats.

nothing would make me happier than to see some teams go under.

While I'm not a big fan of teams holding towns hostage for new stadiums and upgrades your notion that the corporation has ruined team sports is incorrect. Really, sports as a money-maker has been there since day one, when the first person considered it entertainment.

Heck, I can remember the days when I lived in Florida and was able to see the Orioles about 1-2 games per year on TV. While the cost of going to a game is more than I can typically muster, I am more than happy that I can watch almost any game I want, when I want. In fact, I can watch all 162 Orioles games, if I want to. Thank you, Mid-Atlantic Sports Network, Inc.!

[NorvTurnerOverdrive]

you go ahead and hitch your wagon to that horse then.

Originally Posted by CraigSca

Thank you, Mid-Atlantic Sports Network, Inc.!

todays reasonable prices are tomorrow's, 'meh, not worth it.'

[Greyroofoo]

Originally Posted by Ksyrup

This is why the Dolphins have decided that their primary stadium-filler is not the product on the field...

I LOLed at this statement.

[CraigSca]

Originally Posted by NorvTurnerOverdrive

you go ahead and hitch your wagon to that horse then.



todays reasonable prices are tomorrow's, 'meh, not worth it.'

But I don't understand, what do you expect? I mean, do we call the owners greedy for trying to maximize profits? Do we call the players greedy for maximizing their contracts? You can't expect the entertainment industry to work in an altruistic vacuum.

Where's the outrage for Movie Star A making $10 million a movie? The cost of a movie is too much for me to take me and the family out, but it's obviously okay for some people to pay those prices. But really, should the movie industry voluntarily lower their prices if people are willing to pay them? It doesn't make sense - they and the "corporate baseball teams" have people to pay and mouths to feed.

This same conversation goes back to the same old: "corporations make too much money! they are evil!" Well, again, WHO determines how much money is too much?

[NorvTurnerOverdrive]

i know. i get it. it's the natural evolution of things in the capitalist system. it's never greed if someone's willing to pay for it. which is why the nba looks like a basketball game broke out at a country club spritzer.

i wonder what the aliens will think of our culture when they find the ruins of yankee stadium.
'it's some sort of commerce center.'
'but it's surrounding an athletic field.'
'...da fuck?'

[CraigSca]

The other nice thing about a capitalist and free society is that we have the right to complain about how much we pay for and pay our entertainers, which is really what sports is - entertainment.

[RendeR]

One simple reason this won't work:

Scalping.


Ticket "resalers" or "scalpers" or whatever you want to call them, will scarf up all the "freemium" tickets faster than the target audience can and then in turn sell them on their own.

Destroys the entire premise for the idea.

[kcchief19]

About 10 years ago or so when Seattle had roof problems they moved the series to KC and the Royals did something like this -- general admission for all seats with a super low ticket price -- I think like $5-10. Every game was a sellout and it was crazy.

It was such a success that the Royals tried it again the next couple of years for a promotion. With each promotion the response went further downhill that it wasn't worth continuing.

The lesson: At first it would work but eventually you'd return to equilibrium and you'd get the same crowds as when you charged prices, only now you don't have the ticket revenue. If you give away your product for free, customers will eventually consider your product as inferior.

[Pumpy Tudors]

psst wait until he finds out that the nfl has introduced the "forward pass"

[NorvTurnerOverdrive]

Originally Posted by CraigSca

The other nice thing about a capitalist and free society is

fry-see-what-you-did-there-scaled.jpg

Originally Posted by CraigSca

which is really what sports is - entertainment.

dude. it's 2010. everything is entertainment.

[TroyF]

This is what I love about Bogut's plan. Buy seats for fans, but make em the well behaved crazies. I know he did it for only 100 fans, but couldn't you do this in different sections?

I've never understood why teams who don't have a high sellout rate don't get the communities involved more. Give 1,000 seats to schools. Give another 1,000 to a local company. (who will take their families and spend a ton on concessions) There are other ways they can do this and still get cash.

[Philliesfan980]

Originally Posted by RendeR

One simple reason this won't work:

Scalping.


Ticket "resalers" or "scalpers" or whatever you want to call them, will scarf up all the "freemium" tickets faster than the target audience can and then in turn sell them on their own.

Destroys the entire premise for the idea.

Just an idea, but I wonder if you can sell these tickets in an area where the person would basically be forced to enter the stadium?

[Doug5984]

Originally Posted by RendeR

One simple reason this won't work:

Scalping.


Ticket "resalers" or "scalpers" or whatever you want to call them, will scarf up all the "freemium" tickets faster than the target audience can and then in turn sell them on their own.

Destroys the entire premise for the idea.

Could do a will-call system, have to pick them up in person at the gate an hour or 2 before the game. Limit 2 per person that shows up or something like that... Would really close the time-frame they'd have to sell and make a profit, then the profit they could make would be so minimal it wouldn't be worth it for them.

[CU Tiger]

Originally Posted by RendeR

One simple reason this won't work:

Scalping.


Ticket "resalers" or "scalpers" or whatever you want to call them, will scarf up all the "freemium" tickets faster than the target audience can and then in turn sell them on their own.

Destroys the entire premise for the idea.

really?
In today's inst-print days....how hard would it be to have a name on the tickets and require an ID to enter?

[Samdari]

Originally Posted by CU Tiger

really?
In today's inst-print days....how hard would it be to have a name on the tickets and require an ID to enter?

Giving away free tickets over the internet and allowing fans to print them would completely destroy the purpose of giving them away for free - get people into empty seats to spend other money. But, if you could order these on the internet, and they limited them to stadium capacity, you'd end up with about 10% of people who ordered them showing up. People who 'might' want to attend a game would order them, print them and decide later if they wanted to use the tickets.

For this to work, you'd essentially need to give out GA tickets to fans on their way through the turnstiles. If some of the free seats were reserved, you could still do free giveaways, but only at gate 'X'.