The central challenge facing arts managers is to fill the ever-widening gap between rapidly increasing expenses and earned income, primarily from ticket sales. This gap continues to grow each year since the number of seats we have to sell does not increase but expenses do.
Unfortunately, the favored technique used to fill budget gaps has been increasing ticket prices. When we increase prices, typically at budget time, we hope that a small increase will not be noticeable and we need the added revenue to break even. However, we have been doing this for so long that tickets prices are now too high for many people to afford regularly. It is not unusual to see tickets for major opera companies cost $250 or more and the best theater tickets are now well over the $100 mark in many cities. For two tickets to an opera you can now buy a computer and watch Leontyne Price and Joan Sutherland on YouTube for free!
No wonder so many people have stopped going to performances. A recent study by the NEA showed that a huge number of people are getting their arts exposure on-line and fewer are coming to the theater. No wonder so many arts organizations are suffering. Without audiences we receive no ticket revenue and the audience members we lose cease to donate as well. The claim that the arts are irrelevant is getting difficult to dispute.
The arts are not irrelevant. I observe this every day during the Kennedy Center's free Millennium Stage performances that attract hundreds of audience members each night with minimal marketing. Our annual Open House in September features performances on each of our stages all day, for free. The most popular events? Ballet and the symphony, which conventional wisdom says are the most irrelevant of all.
If we want to keep, not to mention rebuild, our audiences, we need to rethink our ticket prices and to find other ways to balance our budgets.
We need to find productive ways to lower our costs. Cutting programming is not a good solution, but establishing creative joint ventures and reducing infrastructure are.
And we need to work actively and aggressively to increase fund raising revenue (by producing exciting work and marketing that work well) and use a portion of this revenue to lower ticket prices.
We do not need to lower the prices of all tickets, however. We find that the buyers of the higher price tickets are less price sensitive; they will buy at any cost. That is why the premium price tickets on Broadway continue to sell.
But the audience members who buy lower price seats tend to be very price sensitive; reducing the price of these tickets should have a big impact on audience size.
If we don't, we will find ourselves with fewer and fewer people in our audiences, and an ever-smaller donor base. The arts will, at best, become the exclusive province of the elite, and to the vast majority of people, live arts will become irrelevant.