What ticks the tickets?

Abstract

Knowing how to sell the right product, to the right customer to the right price can be the difference between profit or loss for music festivals. Festivals main source of income comes from ticket sales and being able to efficiently conduct booking management is crucial to sustain a stable income throughout the financial year. Little empirical research has been done on pricing strategies and demand determinants for the festival industry. I have collected data on performing bands and ticket sales for the Bukta festival for the period 2016-2019. The aim of this master thesis is to model an ordinary least square (OLS) regression to find the determinants for the demand of festival passes for the Bukta festival. With the use of research from similar industries, theory around revenue management, price discrimination and product differentiation I modelled a quasi-demand equation. The finds estimate a price elasticity of -3,2% for festival passes to the Bukta festival, suggesting that a lower price can beneficially increase sales. Weeks containing paydays are estimated to increase the sales of festival passes by approximately 29%. By focusing marketing in weeks containing paydays, when the consumers’ willingness to pay is the highest, the Bukta festival might see an increase in demand for festival passes I used bands monthly Spotify listeners to quantify a measure of popularity for bands. The model estimates northern Norwegian bands popularity to increase sales, while a more popular Nordic band decreases sales. By booking more Nordic bands, sales are estimated to increase by 22%. When viewed in context with the popularity measurement, this indicates that there could be something wrong with the data. 2016 was the year that performed the best in terms of ticket sales.