Tag Archives: performing arts

A Crisis of Audience

We have an audience crisis on our hands. More grim news in the performing arts field this week comes from the New York City Opera, which is leaving Lincoln Center for someplace, somewhere, sometime. It wants a smaller hall which it hasn’t yet found, and it wants to eliminate fixed operating expenses. Why? On any given great performance evening, it can only count on what is reported to be an audience so small that it fills no more than 40% of the hall.

Sound familiar? My blog on the Philadelphia Orchestra noted that in their case, too, small audiences are at the root of the problem. In too many American cities and for too many great American live performing arts institutions, ticket sales are now making up the decided minority of overall revenue. And that’s the most serious problem in the field today. Without regular, repeat buyers – and I’ll take any kind of repeater, not just a subscriber, but anyone who cares enough to come back a couple of times a year – organizations can’t build loyalty. Without loyalty, there is no real personal identification, involvement, and investment. And without that personal identification, there is no annual gift. Without annual gifts, there are rarely major personal gifts, and even more rarely bequests and planned gifts that have long been the foundation for endowments and special programs.

So eventually, smaller and smaller audiences spell fewer and fewer donors. This is particularly critical as we move toward 2012’s Federal proposed cap on itemized deductions, including those for charitable contributions, at 28% of personal income. Not only will this have a highly negative impact on larger gifts from more affluent donors, it will place the burden on more smaller gifts from more people who will be essential to the survival of nonprofit arts organizations. That means we really have to hustle to get more repeat ticket buyers that will make a greater quantity of albeit smaller gifts.

A lot of what is keeping people away from ticket buying is cost; even a musician in the New York City Opera orchestra was noted as saying that he didn’t blame folks for not being able to afford tickets to the organization that has employed him. He’d probably just go out for a beer, he said, if he had any extra change. A beer out is about as much as many arts lovers can afford these days, and that’s flat-out tragic.

But others are fortunate enough to be able to pay the price of admission. And right now, we have to connect to them, woo them, and win them. We need an audience that can and will pay, will come back, and will stay. That means we have to find them, first; then win them.

Typically, development officers are the ones that put stock in donor research. Here at ArtsMarket, we believe in starting prospect research much earlier than in the development office: you’ve got to find likely markets that will be able to buy tickets, and begin with getting them in the door. That takes a lot of research and analysis, and prospecting that is pinpointed.

Yes, social media and mobile-marketing and advertising can do a good bit to get the last-minute buyers to your box office. Both are essential in connecting to younger buyers, and particularly to impulse buyers. But maybe institutions that budget too little for arts marketing – arts marketing has remained perennially underfunded – need to think again. We know of too many organizations that have just been kidding themselves into thinking that more and more (even all) of arts audiences can be won through low-cost social-media based marketing, alone.

This has to be the time when solid research-based prospecting and communications that can be accurately predicted and managed comes into play. We have to build a new pipeline of prospective audience loyalists. Those who take marketing seriously and do it comprehensively stand a chance of winning. And right now, we need a field-wide commitment to winning – to winning people back and into halls for great art. Before for others, like NYCO, it is too late.

The Grateful Dead and the Tapers: A Distribution Lesson for the Arts

I had the chance to tune into a great webinar yesterday led by Guy Kowasaki, the former chief evangelist at Apple and author of the new book Enchantment. The book is about how products and their marketers succeed in really enchanting audiences (buyers.) One of his examples was too good not to repeat. And it is a great follow-up to last week’s blog on how newly increased cable distribution will change the way we consume the arts.

Many of you may know how big the Grateful Dead community has been for all these decades. You know the ease of downloading recordings of their vintage concerts. What Kowasaki focused on was how the Dead fostered that community and all those recordings by creating and championing free seating for the tapers – the bootleggers and fans who got it all live. He noted that while everyone else works so hard to ban tapers and to control the distribution of concerts, the Dead’s free taper sections created – and continue to create – a lot of enchantment as the music and events live on and on.

I got a lot of feedback and emails on last week’s post about new distribution mechanisms in the arts, and a number of skeptics wrote me that we have to protect the live event and especially the artist’s ability to be heard and seen at the live event. (There seems to be some sentiment that too much distribution of classical arts via cable could somehow harm classical arts?) I love live events, witnessing art first hand. But maybe these guys had it right all along when they openly encouraged the free distribution of their work to make it live for everyone who couldn’t be there. What would happen to audiences if there was more of this, using today’s technology?

There’s a lesson there. Face to face interaction with content is what builds audiences far more than all the PR and marketing in the world. Face to face interaction – sure, including via digitized media – that is facilitated by people just like you and me, who think enough of the content to pass it along, is even more likely to build audiences. Too bad that 99.9% of the artists out there have contracts forbidding the very thing that, as Kowasaki puts it, is totally enchanting in the simplicity of methods to build and keep thousands of happy fans. Think of it – a taper section at the concert hall. A taper section at the theatre, the opera. YouTube content that never stops, that is fundamental to audience growth. Encourage distribution, facilitate it, champion it. And watch the line at the box office grow and grow, just as it did for the Dead.

Trend # 9: 2011, The Lesson of the Nook. How to e-Build Audiences for the Arts

2011 is going to be the tipping point in rebuilding and building new audiences for the performing arts – or not. And whether or not the rebuild happens will depend a lot on how well everyone in the arts learns the Lesson of the Nook.

Barnes and Noble just announced that its December 2010 sales were up 80% – EIGHTY PERCENT – over the December 2009 sales. And almost every bit of that, it says, is due to e-books. Reading (like going to performing arts events) has been going downhill for quite a while. The NEA even launched national events to get more of us to read. But what really changed everything was when we could wander through on-line stores of thousands of titles, and download books we no longer had to lug with us. It turned out that reading hadn’t disappeared as an interest, but technology needed to make it easy, fun, accessible, relaxing, and overall a better experience than we’d come to associate with the “real thing.” (For a voracious reader like me, who is a frequent traveler, lugging around a couple thousand pages of books and also knowing what that does to trees has not been fun.) E-reading is fun and easy. And did I mention it is a less than the cost of the same thing printed on paper?

Think of the applications to the performing arts. We all know that we attend live events less frequently, and the younger we are the less interested we seem to be. That goes for all the performing arts, but is most pronounced for classical music. Greg Sandow, who writes one of my favorite (albeit somewhat depressing) blogs on the fate of classical music, talks a lot about the true aging of the audience and loss of accessible product – such as what used to be extensive classical music programming on the radio. We know that even the best of classical music (and all performing arts) continue to have problems putting seats in seats. As Sandow noted in his blog yesterday, “Since the population of the US has increased, the classical audience, measured in absolute numbers, is only a little smaller than it was in 1982. But it’s a much smaller percentage of the population. Classical music is losing ground….If classical music is losing ground, appealing to fewer people, and to a much more limited demographic, then of course it has less presence in our culture. And that’s easy to see.”

Trend # 3 for 2011: Culture privatization

Los Angeles is in the midst of reviewing proposals for the privatization of its many neighborhood cultural centers. Chicago is reviewing proposals for the private operations of its major arts and cultural festivals, long managed by the City. News is rolling in from other cities and counties of similar interests and possibilities.

As governments around the country and around the world face record deficits and intense voter pressure to identify savings, 2011 may see the operations of publicly funded culture up for sale to the highest bidder. We may be looking ahead to a year where cultural facilities long operated by government agencies are privatized or partially so, where festivals may go back to their promoter roots, and even where the work of grant making agencies – at least in part – is privatized. So, is this projected trend a bad or a good thing?

I’m going to believe that it is an opportunity for the kind of new management and operations models, partnerships, and collaborations that the field has sought. Inefficiencies will likely be reduced, and competitive private sector nature may mean new revenue opportunities for the smart nonprofits and for profits out there with the best business plans and capacity.

Here’s what is probably a very limited list of what we may see up for privatization in the coming year:

– Festivals. A no brainer, with privatization already underway as cities curb payrolls.
— Neighborhood cultural centers. These, too, are already under examination for privatization. Truly strong centers may emerge, and there will be more specialization as individual entrepreneurs both for profit and non-profit take on the job.
— Major arts and cultural centers and museums. There will be a trend toward joint operating agreements that partially privatize more of these. It is anyone’s guess how this will play out in programming and access.
— Cultural districts. Many of the best of these already operate as BIDs, and more will follow this route.
— Local arts councils/cultural councils. As cities shed commissions and councils, the job will fall to the private sector. But look to different “parent” entities. The cultural council of the future may be a division of already existing strong public/private partnerships, such as economic development or redevelopment organizations that are proven in the business of cause and effect.
— Public art maintenance. With growing public art collections comes growing maintenance and conservation responsibilities and the need for specialists that may create successful businesses.
— Grants management financial and data services. Once panels have decided on grants, the business of grants administration could be privatized to specialists who blend accounting, data management, and review systems together.

There is more, of course. The efficiency of entities such as the Denver Scientific and Cultural Facilities District, in which a staff of only four administer one of the largest regional funding systems for culture in the US, prove that low-cost/high impact models DO exist.

So, let’s consider all the silver lining opportunities that may be ahead. 2011 can be the year when all the talk of new savings and lower overhead approaches will turn to reality.

The Recessionary Holdover: The End of the High Roller Ticket Buyer

Many of my wonderful colleagues will soon be heading off to the annual Association of Performing Arts Presenters (APAP) conference in New York, looking to purchase the touring acts, artists, and events they will offer for their 2010-11 seasons. Last year, just as the conference was underway, I received an urgent call from one such presenter. “$50,000 is the new $40,000!” said he. “I don’t know what everyone is thinking – they are buying and buying the most expensive acts like there is no worry at all in the economy, and they will have no choice but to sell these tickets at $80, $100, or more! But if I don’t buy at that level, my bosses in city hall will think we are no longer competitive. What do you see, Louise?”

Well, last year I did see everyone still buying at vastly inflated prices that left no margin for error in the number of tickets sold, and a lot of my friends and colleagues got burned when the box office sales didn’t come close to their optimistic projections. This year, my hope is that the field won’t make the same error.

Don’t just believe me. A powerful WSJ front page story last Thursday should be your must read (and be sure your boards and city commissioners read it too) before you shop this year. Titled “Spendthrift to Penny Pincher: A Vision of the New Consumer” the story notes the vast and lingering change in value systems among consumers away from “flashy shows of wealth” to much more conservative buying patterns, even as they feel the recession easing.

Here’s a very important line from the story: “Much as the 1930s shaped the spending habits of an entire generation, many companies now anticipate a shift in consumer behavior that persists even after jobs and growth get back closer to normal.”

My parents, avid arts goers both, were very much children of the 30s. So while we went to more live performing arts and museum exhibitions per year during my childhood and youth than most people attend in a lifetime, we always found the least expensive-but-good seats. We always found the free days or lower admissions for museums.

Lately, I’ve been seeing the same behavior from a lot of vastly wealthy people who may not have been children of the Great Depression but have lived through this recession and have clearly changed their buying behavior. On behalf of a client, we recently built a direct mail campaign targeted to high net worth ($2 million liquid assets or more) households who self identify as performing arts goers. This was a subscription campaign. And in response, what did these folks buy? Bargain-buster, mid-week, inexpensive single tickets. Nary a one bought those Saturday night flashy box seats. Not one.

The WSJ article notes that today’s buyers haven’t reverted to their old consumption patterns the way they did after 9-11. It cites BMW’s US sales for 2009 as down 22.5% as compared to 2008, and that in focus groups with customers Ritz-Carlton found that its customers now feel guitly about lavish spending. This is cautionary to anyone in the arts field who continues to believe that the most expensive tickets will always sell first and that attenders who really want to come will buy the higher priced seats. The Senior V.P. of Sales and Marketing for Ritz-Carleton, Bruce Himelstein, is quoted saying,”I think the consumer’s mind has been reset on how to spend.”

My deep hope is that with careful product selection (at the right price) and even potentially with repriced seating offering more better bargain seats, we’ll see more people acting like my parents once did – going more often, but carefully saving on every ticket and admission. Given what experts such as Himelstein have said, this may well be the arts ticket sales model for the next decade, not just the next few months. For everyone in the arts and entertainment field, this deserves careful attention.