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The Wrap #25 | Unintended consequences and unexpected alliances
A shot of thinking fuel, brought to you each month by Futurestate Design Co.
It’s been an interesting month here at WF. We’ve been almost bankrupted buying a burger in New York (thanks Liz), and left fully destitute after waiting too long to buy tickets for a Harry Styles concert (more on this shortly).
Confessions over, let’s get on with the show.
Ticketmaster’s dynamic reputation
What’s going on
The ticketing industry’s already fragile reputation took another hit earlier this month as Ticketmaster announced the use of dynamic ticket pricing for some of the UK’s biggest upcoming tours. This led to some, let’s call them ‘pricey’ Harry Styles tickets and some very upset fans.
The crushing blow of missing out on an evening with Harry aside, we find this particularly interesting as a behavioural challenge. Dynamic pricing as a strategy itself isn’t new to consumers: it's widely used in services from Virgin Atlantic to Uber. Seats selling fast for that flight? Increase the price. High demand for drivers? Pay more to buy a ride home. It’s a mechanism that has been around for a long time – creating value from scarcity and helping service providers ensure quality whilst managing demand. It’s also, of course, the fundamental business model of ticket touts.
What does this mean?
If you only consider your goal to be maximising income, dynamic pricing is a logical strategy. Ticketmaster, the artists, the venues and the myriad parties taking their percentage all make more if tickets are in demand and can sell for more. And, according to Ticketmaster, it helps to push touts out of touting.
However, while this is obviously a win for income, it can also be extremely short-termist and those effects can be hard to track. As with all equivalent concepts, you can’t simply pick and apply without considering the context the strategy will exist in, nor what its long-term impacts might be. Concepts like Taylor Swift's ‘slow-ticketing’ mechanism (basically, price high first, then drop if demand is slow) is a great example of how artists can build on the concept of dynamic pricing but it got a lot of fan backlash. If fans can’t experience their favourite acts live, they may end up not being fans at all.
Dynamic pricing is an example of a strategy that can be game-changing, but it’s also a great example of one that can have unintended consequences. When you try something new on something old, tread carefully and don’t forget to think long-term.
NYC’s bike lane bounty
What’s going on?
A bill that would allow New Yorkers to collect bounties for reporting bike-lane blockers is the latest attempt by a major US city to make roads safer for pedestrians and cyclists while encouraging residents to leave their cars at home and seek out alternative forms of transportation. The proposed bill is a carbon copy of NYC’s 2020 clean-air program that allows people to report commercial vehicles that are parked and idling for more than three minutes. Those who report infractions by submitting a video can collect 25 percent of the fine collected by the city. Easy $$$, right?
There’s no doubt the program has been a success. There were 12,267 reports in 2021, up 35% from 2019. Roughly 92% of those reports resulted in tickets, netting the city $2.3 million and $724,293 for the civilians who reported violations, according to the Department of Environmental Protection.
Why it’s important
Social enforcement schemes can be powerful, but can again have unexpected consequences. The NYC program has given rise to a particular breed of urban ‘bounty hunters’ – people who hunt down idling trucks and shoot videos to make money, raising concerns about the wider social impact of having New Yorkers report each other, and the obvious opportunities for abuse. It raises some big social questions: incentivising part of a community to hit other members in the pocket as a way of bringing about positive change might end up doing the opposite.
We think this is going to be a massive issue for digital platforms and communities in the coming years. As Elon does what Elon wants to Twitter and ever-more-vitamin-D-deprived-people inhabit the metaverse, it’s hard not to imagine this type of peer-to-peer policing being seen as the solution to upholding community standards. We can’t wait for Zuckerberg’s meta-truck to get its first fine.
Read Bloomberg's original report here
Google doubles down on being smart
What’s going on?
Google is revamping it’s Google Home app, launching new products and setting out a new vision for the smart home. Apple is doing the same. Coincidence? No, it’s all about Matter: the first industry-wide smart home connectivity standard. It aims to address many consumer pain points – interoperability being number one, swiftly followed by complicated setup, confusing integrations and poor reliability. Matter should mean that different devices and ecosystems will play nicely - regardless of which manufacturer made them.
So, if you want to use Siri to ask Alexa if she knows anyone who can get you a dynamically priced Harry Styles ticket, then turn down your lights and switch on the fan while you listen to his new album on a Google smart speaker, you’ll be set.
Why it’s important
This story is significant in two ways. The first is an undeniable masterclass in grabbing an opportunity, setting a vision and executing a strategy to achieve it. Many could have responded to Matter by simply retrofitting devices and in-app services with the ability to meet the new standards. Google, with their smart home purpose to be ‘at the centre of a helpful home’, instead decided to rethink their vision and restructure their offering to achieve it.
The second is what Matter will mean for connected technologies in the home. The opportunity for new and innovative services Matter creates in smart home ecosystems is not one we’ve seen before. What sets Matter apart from other ‘tech standards’ is the breadth of its membership (more than 550 tech companies), the willingness to adopt and merge disparate technologies, and the fact that it is an open source project. That it was started over a dinner by Apple, Google and Amazon employees doesn’t hurt either.
Sometimes, playing nicely with your competitors is the smart thing to do. Make the broad infrastructure simpler and more consumers will use it, making the market bigger for everyone. Compete where you can differentiate, not where everyone is the same. So go book that dinner, using the smart assistant of your choice, naturally.
See Google's 'Reimagining the future' announcement here