More On The Great Ticket Debate

It seems like the issue of ticket prices is quickly making the rounds among the usual blog suspects. I’m glad to see so many people jumping on board with the discussion, although I know some managers are sick to death of it; it’s something which deserves this level of scrutiny…

This recent round started off with Peter Dobrin’s article from the beginning of September, I picked up on that here a few days ago and that was followed up by a post from bloggers Alex Ross and Marc Geelhoed as well as my AJ blog neighbors Greg Sandow and Andrew Taylor (among others who are contributing to the discussion every day). Andrew’s article really caught my attention, like so many from Andrew do, because I started thinking about the situation from a different perspective after letting Andrew’s piece rattle around in my head for awhile.

Andrew concluded with this point regarding price and value,

And if we’re not careful, we’ll forget that price is just a symptom of a larger problem that’s much more productive to talk about: the perceived value of what we have to offer.

In a chicken-or-egg sort of way I agree with that point. I think it is good to talk about perceived value but in order to have that conversation you have to define the parameters of how “perceived” and “value” will be discussed.

One of the issues I think the majority in this business are missing the boat on is the issue of “demand”. I hear the argument from some in the business who claim that there’s no demand for classical music and the business is overproducing the product. They support those claims with attendance statistics, etc. which, for the most part, I don’t challenge.

I believe that the average participation rate among the general population in live orchestral music events is abysmal (the Knight Foundation study from a few years ago put that percentage around 4%). However, that percentage is not the result of orchestral music’s inherent value so much as other factors.

One of the contributing factors to the decline in attendance has been the alarming increase of ticket prices. Many orchestras have willfully segregated a large segment of the population who would be willing to patronize live concerts if it weren’t for the high ticket prices. That’s gone on long enough the business is seeing that same segment of ticket buyers nearly disappear (about 15% of the whole for orchestras who have an average attendance rate around 65%).

The result is more people than ever see orchestra concerts as events designed for a segment of the upper economic class. What do you typically observe when any other business or service experiences a fall in demand (you can lump for profit, nonprofit, and government into that category)? They either fade away into oblivion or find a way to create new consumers.

Orchestras are no different, they need to go out and create a larger and more diverse customer base. In order to do that they’ll need to reexamine just about everything they do with the exception of the actual product; the music. The moment you start screwing around with your core competency you’re doomed (or you don’t realize that you’re becoming a completely different business altogether, more on that in a future article).

The nasty aspect to all of this is earned income, but that’s a big enough issue it deserves a dedicated discussion. Instead, it’s more worthwhile to follow Andrew’s original suggestion and begin with discussions like this surrounding how to create increase value (perceived or not) in the product; or in non manager-speak, how do you get more people involved in live orchestra concerts. Once orchestras begin to find answers to that problem, then they can begin to shape the other supporting issues such as the earned income gap, the cost of marketing, and endowment campaigns.

The article about ticket prices from earlier in the week garnered some fascinating comments  from readers.  If you haven’t seen them yet, take a moment to go through them.

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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3 thoughts on “More On The Great Ticket Debate

  1. Earned revenue is a repercussion of someone deciding to buy a ticket. Money cannot spend itself. Count the people, build a relationship with people and the money will come. Once your current and prospective customers think you’re only interested in them as monetary units, they will go somewhere else where they feel welcome.

  2. I’ll confess I’ve been one of the usual suspects, ranting on about the now mythical $25 ticket … but when I advocate for Opera PPV, Bravo type or Food TV type shows, no one seems to be interested.

    At best, they tell me it (opera and/or some major visual/auditory outlet) is (1) too expensive (2) too much trouble (the FCC?) and (3) some generalizations about unions.

    What no one seems to be able to do in a factual way is describe to me, in % of money spent on a production or in actual dollars what the real costs are to an opera company, for either an “old” or a new opera.

    I can’t seem to get dollars or sense out of anyone?

    Do these cost breakdowns exist anywhere? That might help us get to the root of some of these cost problems …

  3. Andrea B. – the problem with media and orchestras is that there are two payment formulas attached to most recordings for audio and/or video production. These are all codified in a mammoth and hideously (I would say Hegelian) complex document called the AFofM Audio/Visual agreement, among others. There is a special rate of pay for session work, for live recordings, etc. Then there are residual rights or royalties, which are paid whenever a new ‘use’ of the material occurs, such as a rebroadcast or issuance as an internet audio stream, mp3, dvd, or cd. To make a concert-length CD, assuming that there would be two or three 4-hour calls for the recording, would cost over $100,000 just to get the snippets of audio on to the hard disks, then there are the editing costs, production costs, publicity costs, etc. Generally there is some agreed-upon advance on royalties, which gives a larger up-front sum, which is then added on to after sales reach a trigger point. Live concert recordings/broadcasts are substantially cheaper, but if a network has the tape in the can, they want to do something with it, and not pay a lot more money to do it, and at this point you can’t get additional uses of existing material without compensating the musicians. Hope this helps a little bit, and doesn’t muddy the waters further!

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