Disrupt The Youth Demo Again: Bring Them Back From Digital

Empty houses? Get used to it.

Are you a college student or a young professional?

If so, when was the last time you attended a classical music concert, an opera, a ballet, or a symphony? Not recently I bet.

How about a museum, gallery, or theatre production? Maybe a different answer here.

Did you attend on your own accord? Or instead, were you influenced or forced (either by necessity or social pressure) by a parent, professor, or co-worker?

At some point in time while you were dressing in your Sunday church attire, did a smug grin come across your face when either you or someone else uttered “Oooh, how cultured!?” in a cringeworthy highfalutin tone?

That smirk, while fun and lighthearted to you, is a problem of nightmarish proportions for arts administrators across the country. To them it means that certainly now, and likely in the future, it is not a typical activity or purchase decision from your wallet. The fact of the matter is, all arts organizations — fine, traditional, mainstreamed, and avant-garde — not only want, but fiscally need the youth demographic. Whether through special outreach programs, additional programming, or subsidized ticket pricing, organizations see less naturally colored hair everyday. They’re slowly drowning in a sea of gray and blue hair. While many may be getting by at the present moment, all are concerned about their futures, fearing no one will replace your grandparents; few young people in attendance today do so on their own volition. Instead, they’ve looked to alternative outlets more accessible, trading in the mezzanine for a Macbook.

Prominent former New York Times business and culture columnist Judith Dobrzynski disagrees in a recent article from ArtsJournal. “Many people,” she believes, “don’t have the time for art or the inclination for it until they reach a certain age, which — anecdotally — seems to be somewhere in the 40s, give or take, after most people’s children have developed some independence.” Dobrzynski goes on to cite a recent Euro RSCG study which suggests that 63% of consumers around the world believe society’s obsession with youth has gotten out of hand. An article from MarketingCharts appears to support her conclusion, indicating 6/10 Millennials themselves believe too much marketing value is placed on them and their purchasing habits.

A bet you there are a good few marketers, like myself, who disagree with this thinking, citing brand and product loyalty studies. Many will cite exposure and experience with a product while young to be vital in purchasing decisions as people grow into their consumerism. In the age of today’s Millenials with more productions than ever before and technological alerts of offerings outside of a once-restricted sphere-of-knowing, tapping consumers while young is even more important. Building an affinity early is key, especially given this apparent advantage. Unfortunately, arts have consistently struggled capturing youth in the new long-tail landscape. The landscape has changed.

The Chicago Symphony is an arts org leading the pack — through outreach and development they foster student engagement and in turn have massive youth attendance.

With the shift of arts and entertainment from experiential to digital, this becomes an even more pivotal and time-sensitive concern. With less and less young people provided with primary exposure of live arts every year, the target has already begun to shrink. Today, the emphasis is instead on a digital equivalent, largely due to cost, convenience to attain, and ease of continued, repeated use. While the digital arts and entertainment revolution has changed the experience from stage to screen, it has also largely impacted the economics behind it. In today’s economy, businesses based on technology continue to become more affordable every year with increased innovation, while those associated with labor only become more expensive (due to inflation and inability to increase efficient production), known as Baumol Cost Disease.

In fact, there is reason to think the situation could soon get worse. As the cost of admission climbs ever higher, the advent of supply-and-demand-based “dynamic pricing’’ ensures that tickets to hot shows [insert: the only shows these “casual viewers” are interested in seeing] are as expensive as the market will bear. On Broadway, there’s the additional scourge of “premium seats,’’ which for “Death of a Salesman’’ and “The Book of Mormon’’ have commanded nearly $500 apiece. Theater, an inherently expensive art form to make at the professional level, is in danger of becoming a boutique business. – Don Aucoin, Boston Globe

With a generation of Millenials suffering from student loans and postgraduate expenses, those without exposure or a cultivated interest in arts will not be motivated to spend the little leftover from each paycheck on expensive arts. When those tickets can be afforded ten to fifteen years in the future, a lack of interest and motivation will steer many away to spend elsewhere, likely on the more economical digital entertainment. To those who say there is too much focus spent on shifting demographics, I say look to fine and traditional arts over the next decade. Those sad negative outlooks you see year after year will spread across across the industry unless a major pivot is made.

Transitioning College Graduates to Full Price Tickets

For students, a handful of cheap tickets are a thing of the past. Or are they?

It’s been a busy past few days for me here in Boston. With a production of Spring Awakening opening tonight, several large projects, and my “final finals,” the last three weeks of my time at Boston University are quickly coming to a close.  That’s not even counting the ever important job-hunt — which, by the way, I’m still accepting applications for, so send along an offer for the perfect position.

A shorter and slightly different post from me today, inspired by a conversation I had last night. Forgoing my typical structure, I want you to stop and think about a problem that have been feeding ourselves over the past fifteen years. While heavily discounted ticket prices make the arts affordable and accessible to the student and college-aged demographic, how do we transition this public into a traditional ticket-buying model and why haven’t we done it yet?

With my collegiate life coming to a close, it’s dawned on me that rather soon, my process, means, and methods for purchasing tickets will dramatically change. About a month ago, I wrote a post talking about the importance of full price tickets to a production’s bottom line. While moderate discounts on certain performances may help to fill a house, the additional income accrued from these seats does little to impact the bottom line — failing productions often often in the red by more than $10-15k a week.  By and large, full price ticket sales are the lifeblood to sustain the industry as we know it.  At present moment, the discounted ticket opportunities for college students are deep and widespread.  Catering to student audiences began in 1996 when Jonathan Larson’s RENT opened at the Nederlander Theatre.  Quick to becoming the hottest ticket in New York, irony set in; those who the story was about, the city-dwelling bohemians, could not get tickets or afford to see the show.  The show’s producers, along with angel funding from the New York Theatre Workshop (NYTW), instituted a policy that twenty (20) front row tickets would be sold for $20, day-of-show.

Think the losers are headed to the B.O. to buy tickets? Nope, they're headed to the next lotto across the street.

Paving the way for the future, this policy has exploded to be the rule rather than the exception.  Up until three or four years ago, the market penetrated with three types: general rush, student rush, and lottery. Geared toward students, some of which even require an ID, students pine over the twenty or twenty five tickets reserved for each show. As to be expected, these tickets are competitive; for popular shows like Wicked and Book of Mormon, hundreds may show up to put their names in.  When many lose, it’s not off to the box office to buy regularly priced seats or even a walk to the Times Square TKTS booth. Instead, they dash down 9th Ave off to the next drawing fifteen minutes later, continuing on until twenty dollar front row seats are in hand.  There are even dozens of websites and blogs dedicated to information, strategies, and tips to score these seats on Playbill.com, BroadwayWorld, and dedicated sites like BroadwayForBrokePeople.com  This audience has grown up a) always being able to get day-of-show tickets to the hottest shows, and b) never having to pay full price.  Slowly, producers have begun to realize this, but rather than addressing the issue head on, many are scrambling, trying to buy time and figure out a solution. The problem is, the longer they wait, the harder this obstacle will be to overcome.

Fake licenses used to be worth their weight in gold -- now there may be another ID even more valuable.

When moving to college, bright-eyed and bushy-tailed the first thought for many students is finding a fake ID or driver’s license.  Now, for those arts-inclined, maybe the fake college ID business could prove even more lucrative. What other card do you know of that gives a 80-85% discount?  With more accelerated programs and less students completing their studies in the traditional four years, many universities have forgone including expiration or graduation dates on IDs. Certainly box office managers recognize students hold on to IDs after graduation, continuing to press their luck walking up to the glass.  Aged a bit since freshman year?  The cost to get a new ID printed with an updated photo often only runs $20-25 — a deal that pays for itself fivefold with the first use. Many students consider this tactic as an easy way to get three, maybe even four additional years of these student prices reserved for high school and college students.

Arts administrators fear losing this demographic have found additional means to cater to them. But is this a good thing? This coddling only perpetuates the problem, allowing these recent graduates (now with income) to become even more accustomed to paying below face and sustainable value. Two years ago we saw these “student” programs transition to “young adults,” increasing the upper age bracket range to 25. While I would have like to see a push toward the more traditional, appropriate discount opportunities (specific codes, redirection to half-price TKTS booth, etc), I’m not incredible concerned by this change.  Few recent graduates, especially those with an arts focus can afford to shell out $121.25 for a single seat. What does make me sweat is the recent, more alarming jump.  Over the past few years programs like Roundabout Theatre Company’s HIPTIX and Huntington Theatre Company’s 35 Below, have increased the upper age another ten years, providing these heavily discounted tickets to those pushing forty. Wow.

Is a period of tough love the only away to flip this entitled audience base with unrealistic expectations? Should there be a hard, finite stopping point on these student discounts or should a more graduated approach be used, easing people into a more realistic middle ground? It’s a tricky situation — a passionate and engaged audience who cannot (and will not) pay retail price. What is a Broadway producer or regional theatre company to do?

Should All Shows Have The Same Ticket Price?

In new York, even minimalism comes with a hefty price tag.

It’s no secret New York theatre is expensive.  Often in this blog you’ll see my write “$121.25′s” as a way to denote a single audience member.  Right now this is the standard base price for almost all Equity theatre running in a Broadway house.  The price for an orchestra or front mezzanine seat can only go up from there: add ten dollars if you’re looking for an aisle, fifteen if you’re coming on a weekend and so on. Let’s not even talk about so called “premium seats.”

I get it. Theatre isn’t a cheap endeavor.  Producing and managing even at the amateur level has shown this to be true. Those numbers increase one-hundred-fold when moving to the regional or Equity realm as I’ve seen when working with LORT companies in Boston and in the West End last fall. Every week, there is an endless list of expenses producers must shell out before even thinking about paying back the initial investment to angels, not to mention even think about profitability: rights and royalties, actor salaries, crew and musician salaries, theatre rent, electricity, prop costs, union fees, benefits, etc.  Based on size and scope of production, these weekly running costs can range anywhere from $250,000 up to a cool million. This number, or “nut,” of a production is the cost to keep the show afloat every week — the dollar and cents amount is to keep the actors onstage and the lights aglow. My question, is should base ticket prices for these Equity productions be proportional to the amount spent by producers? Should cost of ticket be dependent on the cost actually needed to keep a production open?

title of show had nothing.

The scaling of ticket prices has been an age old debate, coming up every few years, often times when a small show is placed right beside a larger one with both tickets showing the same face value. Flash back to 2008 with the Broadway transfer of [title of show]. Infamously taglined with its own lyric “who says four chairs and a keyboard can’t make a Broadway musical,” the show was as barebones as could be. The cast were the writers and creators and none of the four had a past credit under his or her belt. The set was four IKEA swivel chairs, an almost empty stage, and a white wall. The pit orchestra was non-existant — the music came from a keyboard onstage played solely by the music director. The weekly nut of the show, rumored to be the lowest in Broadway history (with inflation accounted for) was $150,000.

Wicked had everything.

A few doors down, we saw the smash hit Wicked playing at the Gershwin with a nut, cautiously estimated, at four to five times higher. Both shows were advertising a ticket structure based around the then-standard $101.25. Even with heavy discounting, [title of show] failed abysmally. It was the little off-Broadway show that couldn’t. Aside from the show’s subject matter being a deterrent, the second most common remark was that people “couldn’t see where their money was going.”  The cast was small with no names commanding a high salary, the set was non-existant, and a lush orchestra pit was nowhere to be found. The intial investment was never published, but it was certainly basement level. With heavy discounting, the show’s attendance improved, but it ultimately closed several weeks later losing its full investment. People were simply not willing to spend over a hundred dollars a ticket for a bunch of no-names sitting in an empty room.

Whether it’s right or not, the casual theatergoer wants to see his or her money onstage. They want a B-list tv star, a huge ensemble cast, a lavish set, and a huge symphony orchestra sunk beneath the stage. And to be honest, at that base price, why shouldn’t they? If a producer is spending less to raise a production, what is the rationale in charging the high ticket price? Regardless of price, producers often only take in $50-70 a seat, save for the megahits — just look at average ticket prices in the weekly grosses. Why not instead lower ticket prices to an acceptable, more suitable level based on the production and people are willing to pay for it. Theatre follows the rules of supply and demand. For many shows (a third of them at any given time), there is little to no demand for a $100+ ticket — those seats are only purchased when discounts become readily available.

Maybe it’s because there are only a few producers controlling a large majority of productions, but why should they band together to monopolize the price of “theatre.” Why, instead, can it not be based on a singular production? I’d love to see a producer mix it up a little: take a smaller show and open it at  a lower affordable price. This will get people in the door — fuller houses during previews – and ratchet up word-of-mouth surrounding it. If the show’s any good, this will increase demand, which would then warrant the increase in prices.

But really, why are deep discounts the only method to fill houses -- where's the aggressive pricing structure? I think producers are often too proud.

How would the public react to such an approach? Would people inherently think a cheaper show to be “not as good”? Should set ticket prices be a thing of the past and should the art realm move forward like the airline industry with a more fluid structure based on what is needed for each show and what you’re looking to see? Not only would this limit the effects of gouge scalping but also deliver the most cost efficient tickets to audiences depending on what they are looking to see and when. In my book, someone should never pay the same for Peter and the Starcatcher as they do for Spiderman – what you see presented in front of you is not financially equal, so why should the ticket prices be?

Full Price Tickets: The Key to Success

Right now I’m sitting in the San Francisco Airport outside Gate 54A coping with a three hour fog delay before heading back to the East Coast. With the twenty minutes of free wireless access I’ve received from watching a three minute Charmin paper towels ad, I wanted to pass along a great post from a favorite blog of mine, The Producer’s Perspective, by Ken Davenport. Ken is a New York-based producer who’s had great success in the Broadway and 0ff-Broadway markets. He’s also been one of the leaders in leveraging new, social, and 2.0 media into the arts administration and marketing model. I applaud him for that.

Ken has done a lot of research, crunching the numbers on whether the discount culture for the “perishable performance” is actually hurting the industry more than helping it.  For almost any show playing in a Broadway or off-Broadway house, discount codes can be found through a quick Google search. Some sites, like BroadwayBox, even aggregate these codes from different mailing lists, newsletters, email blasts, and direct mail flyers (try it for yourself right now). With the price of live theatre so high ($500+ for a family of four), not doing this bit of legwork is foolish. With a few clicks you can often cut prices in half and save hundreds of dollars. While these discount codes generally mean fuller houses, are they mutually beneficial to the audience and the producer? While list price for tickets can range from $120-180 (with premium seats sky high at over $400 each), the average price paid by an audience member is often only $60-80 after all discounts have been accounted for — check this week’s published grosses to see.

Day-of-show discounted sales at TKTS provide tickets at slashed prices to most shows running.

The fact of the matter is that now, full price tickets, not full houses, lead to a production’s success (recoupment). It is only through paying this MSRP (of sorts), that a production will be able to turn a profit. Unfortunately, today’s information age makes this more difficult than ever. People desire, nay expect, discounts on everything, and now with these aggregated services, finding these valuable codes is easier than ever. It’s become the first step in the process. Patrons who have paid full price in the past are shifting as well. But then, why shouldn’t they?

What’s Davenport’s suggestion? Increase the value of a full-price ticket. Producers should play their chips and use all the bargaining tools they have to drum up this business. Among his initial recommendations, he suggests creating an exchange policy to swap performance dates if something comes up. It costs nothing, but provides great service and added-value benefit to the customer. He suggests giving consumers something they can’t buy to sweeten the pot. Right now, Ken gives away a backstage tour after every performance of Godspell. It’s low-key and fifteen minutes of someone’s time, but it’s a once-in-a-lifetime experience for a fan. People pay hundreds for this at auctions and raffles and he’s giving one away every day. How about bundling in a t-shirt or a mug? These items have large markups at souvenir stands and cost nickels to produce — the customer will feel like they’re getting a deal. When they wear the shirt or bring the mug to work, you’ve got word-of-mouth marketing, a personal endorsement. Read the rest of Ken’s post on how to encourage more full-price ticket sales here. The obvious goal of any business model is to have customers paying full-price, but right now arts administrators have the fear of discount deals running away from them. To succeed, we keep the balance of paid and discounted in check, or face the fact that soon people will expect, nay demand, ticket prices well below our break even cutoff.

Now to those of you who’ve used discount codes, put yourself in the administrator’s shoes. What do you think? What other sort of services or benefits would make you willing to pony up a bit more?

“Pay What You Can” Equation

What if your business model was based simply on what people were willing to pay for your service?

What if your arts organization, where profit margins are usually slim, left financial choices up to the consumer — admission charge or price per seat was whatever cash someone had on hand?

“Pay-what-you-can performances” and “suggested donations” are nothing new.  Used both in the for-profit and non-profit business models, entrance price is not set, but rather is left up to the consumer to pay what they feel the performance or entrance is worth.  Employed by museums, dance companies, and theatre organizations, pay-what-you-can performances are often used as a promotional tactic to stir buzz, drum up ticket sales, or draw in the elusive “youth demographic.”

From a college student’s perspective, nothing beats the the pay-what-you-can method.  On a few specified, mid-week performances, theatres allow students to pay whatever they’re willing to (or can afford) to catch a show during the first few weeks of its run.  While Boston’s arts scene is more affordable than New York, it’s still not “budget friendly.”  The Museum of Fine Arts, located on Huntington Avenue, charges $22 for regular admission, but only offers a $2 discount to college students, less than a 10% discount.  Many theatre companies also only offer these types of student discounts day-of-show in a standing room section or via a limited, competitive student rush system.

Pricing strategy  is one of the most vastly variable equations in arts admin.  In the for-profit arena, it’s analyzed to n-th degree, crunching numbers with complex formulas and spreadsheets.  However, in the non-profit sector, things couldn’t be more different.  These pricing strategies come up last minute as a response to ticket sales in the moment.  Often times they come through suggestion from interns, or even from audience member feedback.

Studying in London this past fall, I was able to see the suggested donations approach implemented wide scale in the city’s museums.  Now, I understand Arts Council England‘s subsidy of these organizations, but work with me here for a minute.  Most museums in London had no posted entry fee, but were instead free for all to enjoy.  Take the National Gallery in Trafalgar Square, for example, one of the most impressive fine art museums I’ve had the experience of wandering through — totally gratis. This made it easy to pop in for a for an hour or two whenever I was in the area.  I was never overwhelmed or exhausted by the art, but was able to comprehend and compact it in smaller sittings, something I would not be able to do in the States without a costly patron membership.  By every entrance or exit they’d have a large glass container accepting suggested donations in any currency (approx. $5 USD). Often filled, I would always toss any loose change I had (dangerous with British pounds!) any time I wandered in.

Subsidy or not, this suggested donation approach is easier for museums to employ than theatres.  With a finite number of seats, theatres need to mathematically make a certain dollar figure for each to turn a profit, or break even. Museums see this problem less often, as generally their facilities seldom reach the point when they are at capacity and forced to turn patrons away. Also, with the cost of acquiring art pieces and costly curation, museum admissions make up an infantismal piece of their revenues, often times ranging from 1-3%. Claire Rudd, of Glasstire, believes museums hesitate to increase prices to alter this ratio as the focus is on philanthropic giving which makes up a larger percentage of their contributions.  A spike in admission costs could alienate this audience and negatively downturn these numbers, significantly outweighing the benefit.

Even with this pay-what-you-can approach, arts administrators still need to provide a baseline to their customers on what is an appropriate and acceptable donation. Whether this is done through mind games or clever copy in pamphlets and signage, it’s important to convey this number to their customers.  While museum admittance may not effect a their bottom line and break-even point, the source of income cannot be entirely thrown away. As theatres have a specific and finite number of seats in the house, often times they’ll enforce minimum for a pay-what-you-can-performance (regionals: $14 with a $1 restoration levy). This, essentially, creates a $15 pricepoint that all pay; a blanket discounted rate for every seat in the theatre.  Does it help make payments and generate buzz during a production’s critical period? Maybe. Is it sustainable? No.

But would theatres continue to push this strategy if it wasn’t in their long term interest? Beside providing a full house for actors to feed off (a convoluted side argument I won’t bring in at this point), does a heavily discounted house provide anything to theatres? One could argue coat checks, concession sales, and increased impressions on paid programme adverts, but I believe in most cases the cost of additional house staff would counterbalance that. The only positive I could see comes from a Development Dept and grant perspective; a non-profit with a lower average ticket price can apply for more and larger grants, the opposite step in becoming more self-sufficient, even for a non-profit. It only sets up a false reality for consumers on the actual and sustaining cost of fine arts.

In 2007, British rock band Radiohead tried a similar model for release of their record In Rainbows, releasing it a) separate from their record label (EMI) and b) without a price. The album was available only via digital download on Radiohead’s website and after that everything was up to the consumer:

Drop In Rainbows’ 15 songs into the online checkout basket and a question mark pops up where the price would normally be. Click it, and the prompt “It’s Up To You” appears. Click again and it refreshes with the words “It’s Really Up To You” — and really, it is. It’s the first major album whose price is determined by what individual consumers want to pay for it. And it’s perfectly acceptable to pay nothing at all.  (via Time)

I think, unless the performance is total garbage and you feel the company has a nerve charging anything for such incompetent dreck, a fair “pay-what-you-can” payment is half the usual ticket price. Once the theater-goer has paid that, he or she should consider a tax-deductible contribution to make up the difference, or even exceed it. This might allow the company to keep its ticket prices out of the stratosphere, so live theater doesn’t join ballet, opera and polo as pastimes only the wealthy can afford. – EthicsAlarms