Why Free Is The Answer For Rugby

carisbrook Why Free Is The Answer For Rugby

Professionalism, television and the loss of “love for the game” have all been blamed for the declining crowds at Rugby grounds around the country. The irony of the professional era is that while SKY pays $664million a year to players, unions and administrators, it’s also killing gate takings.

Otago’s solution for their non-existent crowd has been the construction of Forsyth Barr Stadium which is estimated to cost ratepayers $261million. For a population of 120,000 it’s a massive investment. One that may never actually break-even.

Before committing to such a huge project you’d think they would have tried absolutely everything to get people to games in the existing stadium, but you’d be wrong.

While they have tried various promotions, nothing they’ve done has come close to a new business model. At the moment the number of officials & security people at games appear to outnumber the fans, so with such dismal attendance why not try a  new ticketing model.

Free Tickets

The answer is free because …

  • It erodes the difference (the cost) between going to the stadium and watching the game at home. This helps fill the stadium.
  • More bums on seats means that the money not made at the gate would be recovered through food and beverage sales.
  • More eyeballs equals more advertising dollars. With a stadium full of people more money could be made from advertising on signage throughout the stadium.
  • Some premium sets could be charged for as people don’t want to rush for the best seat in the house (similar to Ryanair’s Premium boarding).
  • A full stadium creates a great atmosphere. More people makes for more fun. More fun and more kids seeing their hero’s in the flesh may just reverse the loss of love for the game.
  • You don’t have to charge for everything to make money, you can make money from the add-ons.  More loving fans, means more merchandise sold.

So what have they got to loose – it’s not like they’re making any money from tickets at the moment anyway. But the question at the heart of this model is…would you go to a free game?

This post is based on an idea shared by @ophil, and is backed up by Chris Anderson‘s new book “Free, the future of a radical price” (download the free audiobook here).

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  • brookwarner
    great stuff! totally being saying the same kinda thing to my peers and my networks. Unfortunately they still cling to the old model as if it was oxygen itself....
  • ophil
    Thanks for the attribution Sam, as discussed been banging on about free for a long time now. Ironically it wasn't originally about free business models, more about considering why let other (uncontrollable) elements determine your success by relying on them behaving in a particular way.

    In strategy terms price acts as a barrier to entry. For example you can't use electricity without an appliance, so the electricity suppliers 'rely' on appliance producers selling the connection to the network... if they do a poor job the electricity company performance is constrained.

    This exact example lead to Rob Aitken and I suggesting in lectures that electricity companies should / could give away free heaters to students during O'week. Both power consumption (the way power companies actually make money) increases and its likely that this would seed a relationship with customers when entering the market for the first time and becoming a life time user. Throw in a little customer inertia with regards to changing supply companies and it seems like a recipe for growing a substantial (stable / loyal) customer base.

    A comment on the 'full stadium creates great atmosphere' bullet point - this is the key argument. My logic started from this assumption professional sport now makes the majority of its revenues from broadcast rights... while traditionally they have sold the 'game' what makes it better to watch is the atmosphere at the game. Consider watching a test match (on tv) when there was no crowd there; the skill set (the functional product) remains the same but the observed experience suffers. Better television, more money for broadcast rights... I am guessing that the differential between ticket sales and increased broadcast rights is not actually that much at the NPC or Super (whatever number they up to now) rugby.

    This is also a way to understand how sports events are co-created with the crowd. Listen to any 'big match' interview and the players always comment about the difference in intensity caused by large crowds.

    A final thing about human nature too, is that some people don't want the free experience - they want it enhanced (sometimes the only enhancement is the knowledge that they paid and everyone else didn't). This demand for enhancement creates opportunity to charge customers who want to be charged who are then also unlikely to complain.

    The revenue model has already changed BUT the producers of rugby want to continue to clip the ticket multiple times... spectators and broadcasters hard to stop eating at the trough when you have done it all your life (even if less and less scraps in it each day)

    free doesn't mean no one pays - just maybe not you

    Cheers again for the hat tip...

    Ophil
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