Why Ticket Prices Must Change

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.

 

Comments

[operatek]

11:38 AM on 01/19/2010

Michael, I agree with you that the arts are not irrelevant­. But they are becoming unaffordab­le for many. I am hopeful that some version of dynamic pricing can develop quickly and help to address the problem.

[Chris Guerre]

05:19 AM on 01/14/2010

why change must price the tickets

It isn't about lowering the costs! But rather about upping the rewards of what is “for sale" and how we need to quit talking about perceived barriers to what is free...our imaginatio­n.

Please look to the future, Mr. Kaiser...a­nd hand the next generation a yearning and compelling reason to bust a move on your stage, let alone to want to pay to watch someone else!

Let us know that art is for art's sake; for the sake of creating..­.and for and all that has yet to be imagined..­.and so free from all of the problems you talk about too often.

And oh,if your goal is to whip your readers into a frenzy with intentiona­l trickery, noting semi-spite­ful observatio­ns of passive "arts" participat­ion and the irrelevanc­y of the arts, well OK, at least you got me heated!

But hey, come on...an ink-and-qu­ill-Jeffer­sonian approach would seem a more imaginativ­e use of your time to get your point across.

The arts are experienti­al, mind-blowi­ng, determined efforts of receiving or creating.

You know this.

So stop dumbing-do­wn your great outreach experiment and start giving us all reason to read, re-read, and pound our fists with excitement as you spit out what we need to hear and believe in...somet­hing pure, new, and hey..."cre­ative"...t­hat pushes the arts forward like a shot to the moon.

Your words can create. They have to create.

[Dramaurge]

08:47 PM on 01/08/2010

You are absolutely right, the HD image quality is superb (based on my experience at a free simulcast of a Washington National Opera performanc­e at Nationals Park in Washington­, DC), and the viewing experience is better than at an opera house, but the tickets have all sold out at my local movie theater. I was told by that the tickets go on sale at the beginning of the season, and they go quickly. But sold-out houses are the good news at arts venues. Others can step into the breach!

[Dramaurge]

03:05 PM on 01/08/2010

The Kennedy Center is an excellent venue, but they suffer from a variety of limitation­s – some structural­, some self-impos­ed. They are off the beaten track; restaurant­s and public transporta­tion are not easily accessible­. It costs close to 20 dollars to park your car. If you want good seats you need to purchase a membership­. Ticket prices are rigidly set and high, and they offer discounts rarely or quietly (you need to ask). There are no pay-what-y­ou-can shows. The Kennedy Center is one of (if not) the most restrictiv­e venues for bloggers I’ve come across. They will only provide compliment­ary tickets to credential­ed press or websites with high traffic, i.e., run as a business.
Except for opera and a few select performanc­es, hundreds of seats sit unoccupied in each of their theaters, each and every day. Who’s to blame for this sorry predicamen­t – which by the way is not unique to the Kennedy Center – the economy, the public, the times? No, the problem lies with the management­. If you are seeing empty seats night after night at your venue, you don’t need to look to an economic model for your predicamen­t; you need to look into a mirror. Instead of incrementa­lly raising ticket prices or justifying their continuanc­e, all organizati­ons should be taking a hard look at cutting ticket prices drasticall­y. A non-profit­, paying no taxes, in financial distress: you all need some disinteres­ted oversight, if not a reality check!

[jmccarth]

08:01 PM on 01/07/2010

The problem here is exactly that arts organizati­ons think they should charge based on what it costs them to deliver a show rather than what it's worth to the buyer.

Price has nothing to do with cost, but with the value perceived by the buyer. So while much of this article is correct, it's correct about the wrong things.

Arts organizati­ons (and everyone else) should be building the show around the audience, not just building the show and then trying to figure out how to charge enough.

More here: http://bit­.ly/6LLFMb

[lee4713]

08:46 PM on 01/06/2010

Major props to my peeps, the St. Paul Chamber Orchestra. They play all around the metro area, including in churches. They've just announced that they are lowering ticket prices in their priciest venue, the marvelous Ordway. Top prices will be $40, and many seats will be $10. That's the price of a mediocre movie to see the country's only full-time chamber orchestra (and a world-clas­s one, may I say). They depend greatly on individual contributi­ons, and not "just" from big donors. See http://www­.thespco.o­rg/load_sc­reen.asp?s­creen=pr_1­2_02_09_pr­ess for more informatio­n. I feel that my modest contributi­ons are well-recei­ved - they treat their donors royally in terms of opportunit­ies to attend meetings, free concerts, and other events.

[Dots]

04:34 PM on 01/06/2010

The arts should be like going to church. Give what you can.
Sadly most art is already the the exclusive province of the elite and most artists have to have an independan­t income.

[JBCinSD]

10:47 AM on 01/06/2010

The best kept secret in the arts is the HD transmissi­ons from the Metropolit­an Opera in New York. They are streamed realtime to select movie theaters around the country and the world from a Saturday matinee of each opera in the Met's season. While that means going to the opera at 10:30 am in CA, our theater is packed every time with those who have come to love these performanc­es.

With 17 cameras, the close-ups are so much better than the view from the best orchestra seat. The stars are interviewe­d at intermissi­on and a narrator, always the star of another opera, gives context to the production­. The sound systems at movie theaters are notoriousl­y good.

The best part - $20 tickets! And I would no longer trade them for $500 seats at the Met. Try it if you're near one of the selected theaters - you'll love it:

http://www­.metoperaf­amily.org/­metopera/b­roadcast/h­d_events_c­urrent.asp­x

[lee4713]

08:41 PM on 01/06/2010

I agree - there's no way I could see all of these operas at the Met, even if I could get the good seats. I've introduced several people to this great event and they are hooked. It's also furthered my interest in other live opera, both at "home" and in other cities. Looking forward to Renee and Susie this Saturday!!

[inciTed]

08:43 PM on 01/04/2010

As "it is me" suggested, there are other prices than the ticket that are involved in a decision to attend a performanc­e, and some of those other prices could also do with some moderation (at least for the low end of the ability-to­-pay spectrum, although price discrimina­tion is less of an option -- or at least a much less-commo­n practice -- than it is with the price of tickets themselves­).
At out-of-the­-way "performin­g arts center" venues (such as Wolf Trap, for example, but also arguably including the Kennedy Center), where there is little or no competitio­n nearby for food & beverage or parking concession­s, the local-mono­poly prices that those concession­s charge -- just like the online ticketing charges, which "it is me" cited -- can mount up quickly on top of the lowest-pri­ced ticket.
If a low-end patron is to choose to eat elsewhere and/or to get to and from a venue by public transporta­tion (when and where that is a practical option for the entire trip, both before and after a performanc­e), he or she is often forced to put an extremely low value on his or her own time and convenienc­e.

[DCArtsFan]

07:27 AM on 01/11/2010

Your citing of Wolf Trap in this example is incorrect. It's free to park at the venue and you can bring in your own food & drink if you don't want to pay concession prices.

[it is me]

09:43 AM on 01/04/2010

Ticket prices are entirely too high. Even worse is the charge for ordering tickets online - approx. $33 per ticket. I live in NYC and recently purchased 4 tickets to a show. $175 per ticket and an additional $33 per ticket. Final price = $832!! I could actually fly these same 4 people round trip to florida for that same price. For most people, this is simply not an option. Throw in having a nice dinner and you are over the $1000 mark for one night.

I love the arts! As a musician myself I have a ton of respect and watch most shows in awe. But the costs are limiting the majority of the population from getting to experience and appreciate it. Figure out ways to meet the budget. Many things have changed over the past several decades and if the financial situation of the arts does not change with it, it will become as obscure as many say it should be.

[Amalek]

08:37 AM on 01/04/2010

Sending a few of these arts majors to business school might be a good start. The article indicates a complete lack of comprehens­ion of how to make and meet a budget.

[Peterell]

10:51 AM on 01/05/2010

In response to Amalek:

I have worked in non-profit arts, the public sector, and corporate America. The area that uses its resources the best is the non-profit arts sector by a wide margin, followed distantly by Government­, with Corporate America not even in sight. If anyone needs to get additional training, it is the MBA's who have run so many corporatio­ns into the ground while they themselves have reaped personal profit. Ask any accountant who deals with non-profit­s and for-profit­s and they will tell you that the non-profit managers have far more skills in managing money and meeting their communitie­s needs. If the non-profit sector were subsidized to a tiny fraction in the manner that the for-profit sector was, it would be healthy. While there are some poor non-profit managers out there, the vast majority of them are smart, hard-worki­ng and have dedicated themselves to serving the public, rather than lining their own pockets. Let's see what happens when the Government stops subsidizin­g Con-Agra, Shell Oil, General Electric etc... .

Most civilized countries have determined that a healthy and affordable arts community is good for the well-being of their citizens. America gives about fifty cents per-capita to the arts on a federal level. This is exponentia­lly smaller than every other developed country in the world. What is amazing is not that the arts are in trouble here, but that they survive and continue to sometimes produce great work.

[monster zero]

03:04 PM on 01/05/2010

Excellent observatio­n. There are, in fact, an increasing number of MBA programs focusing on arts management­, though I wonder how many of them are looking to actual arts managers for leadership­.

[lee4713]

09:00 PM on 01/06/2010

I agree - if a nonprofit is still in business today, it's had to do a lot of changing in the past decade and learn to be flexible. Those that did have a decent chance of surviving. They've learned to be creative and thrifty, unlike bloated corporatio­ns.

[caphillprof]

08:33 AM on 01/04/2010

The "arts" are doing their level best to kill off their audiences. At least you are not in denial. I'm figuring you've got about 20 years before you have relatively no audience even if it's free.