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.