My wife sent me a copy of an article appearing in the 05/30/06 online edition of CNN.com about ticket prices at amusement parks. It seems that one of the largest parks, Cedar Point, is bucking the industry trend and actually lowering ticket prices by $5.00 for adults. Additionally, they are cutting the price on one of their highest profit margin concession items by lowering the price of cotton candy from $3.00 a stick to only twenty-five cents…
This comes at a time when other major amusement parks are continuing a sharp increase in admission, as much as 18% this season. Another point the article touches on is the aspect of consumer experience. One amusement park executive that manages a park which implemented free soft drinks was quoted as saying the move to discount prices for cotton candy will impress parents. He went on to make a simple, yet fundamental point that applies as much to orchestras as it does to amusement parks, "Our business is driven by positive experiences."
Of course, what makes the dip in price such a topic for worthwhile scrutiny is that amusement parks are beginning to experience the same sort of dip in attendance that orchestras have been experiencing for the past decade. Traditionally, the amusement park industry has seen steady growth in attendance numbers and up until recent times, skyrocketing admission prices hasn’t been much of a deterrent.
Of course, the price of orchestra concerts has been a long running topic here but it seems that even the American Symphony Orchestra League has finally determined that perhaps it’s an issue worth examining. At the League’s conference (going on right now) they have a session planned for today entitled "The Price Is Right. Or Is It?"
At first glance, I was pleased to see the topic on the agenda, but after the session description’s first sentence I realized that the League likely doesn’t get it. The description reads as follows:
"As the cost of doing business escalates, should ticket prices keep pace? How to offer a range of price points so that live symphonic music remains available to anyone who is interested? Is cost a factor when music lovers select concerts? The League shares the latest research on pricing, attendance, and revenue as well as new approaches to ticket pricing."
I’m going to go out on a limb here and predict that much of the discussion will focus on whether or not the experience is worth the cost and how orchestras can chop up their seating into several dozen price points (best known as scaling the house) to get the most revenue possible.
Then they’ll talk about how the highest price tickets always sell because there’s always buyers for those anyway as these people usually perceive the purchase as a form of donation anyway. After that they’ll talk about trying to find ways to keep the lowest cost ticket prices where they are or maybe even lowering them but the middle priced tickets will continue to go up in price, keeping the average prices well above where they should be.
They’ll likely cover how orchestras can make it seem like they’re offering more lower cost tickets by focusing media attention on the bottom price tickets and rush ticket programs while also glossing over facts of purchasing restrictions and limited availability. In the end, I bet it will be a fairly benign conversation which ignores the fact that across the board, orchestra ticket prices are one of the leading factors keeping people away from the concert hall.
Instead of talking about "new approaches to ticket pricing" they should be talking about the fact that eventually, the increase in cost to present orchestra concerts will outstrip any ability to earn more than 30% of revenue from earned income. As such, orchestras should be initiating capital campaigns –right now– designed to subsidize ticket revenue with income revenue.
How do I know ticket prices are one of the leading causes for a decline in attendance? You’ll have to wait a bit until the middle of June where I have an article planned which examines that issue in detail.
Regardless, it will be interesting to hear what actually transpires at the League’s session. Given the fact that the session isn’t until this afternoon (Pacific Time) that gives plenty of leeway between when this article goes live and the beginning of the session.*
In the meantime, go back to the article at CNN.com and notice that ticket sales are being determined by spur of the moment planning as people no longer prepare their activities far in advance. As such, the article reports that many parks are focusing on flexible pricing structures and making the attendance experience much easier and as hassle free as possible.
What used to be a PITA for the customer is now the PITA for park staffers as they work at streamlining the entire process of attending the park (right down to lodging and shuttle service). It will be fun to watch this summer’s amusement park season for to see if the changes in pricing and customer experience focused efforts have a noticeable impact on revenue and attendance.
*And for all of the folks out there who are wondering (beyond the several dozen that have already written in asking me about it); no, I am not at the League conference this year. Next year the conference is in Nashville so maybe I’ll make it there.