Recently, I had a conversation with my television provider about my sports subscription payments. As is always the case, this rises through time, and one often ends up paying far more than one would like for access to 'premium' sports content.
My call was motivated by the fact that the company is advertising a discount offer at the moment to new customers, or existing customers that do not have the sports subscription package. My question to the person I was speaking to was “Why is my 'loyalty' punished?”.
Of course, the question was not answered but negotiations started, and my payment was reduced, though not as far as the discounted offer to others.
I understand the logic. The company, rather than seeing me as loyal, views my demand as relatively inelastic. I’ve been willing to pay for this service for many years, so they assume it is somewhat essential to me. The discounted price is offered to those that view the product as more of a luxury, in the hope that the reduced cost might entice some to sign-up. The model seems to work.
While my demand for this sports product is from the armchair, others demand the product from inside the stadium. Football clubs – to their enduring credit – appear to do the exact opposite to television providers. Loyalty is not punished but rather rewarded.
The season ticket – the ultimate commitment that any supporter can make year-to-year to support their team – is sold at a discounted price on average. This is especially true outside of the very elite clubs (it would probably be possible to buy individual seats at the lowest price range for less than a season ticket in some top clubs). The reason for this dates back decades, and was an attempt by owners to become cash-rich before the season kicked off, in order to fund the team in the months that followed.
This logic runs counter to the subscription sports provider. The season ticket holder must be, by definition, the most inelastic consumer of the football team’s product. Would they not be wiling to pay more? Probably. Yet clubs do the opposite and reward their commitment and loyalty. Yet another example of the public good status of the football club.