The 'net Premium

Philip Greenspun notes that it is always more expensive to buy [theatre and concert] tickets over the Internet than in-person and usually more expensive on the Web than on the phone.

If a supplier sells their product via distribution partners and via the web, it is (almost inevitably) going to be cheaper for a customer to buy from one of the distribution partners.

The classic case is plane tickets. You can buy them from the airline over the phone or ‘net, or you can go to a travel agent. If an airline were to charge the same price to travel agents as they do to the general public, then travel agents will have a hard time making money out of the tickets. Eventually travel agents will refuse to sell the tickets.

Airlines need the business that travel agents bring in, so they sell tickets to travel agents at well below the the web price. Because they buy tickets on the cheap, travel agents have some margin to use to compete with each other. The overall effect is that it’s cheaper to buy tickets from a travel agent than from an airline.

I wonder if this is part of the reason why Philip is paying a ”‘net premium”.