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April 2, 2007

Re-Examining the Issue of Ticket Prices to Orchestra Concerts

An interesting development seems to me to be bubbling up in the world of symphony orchestras over the past five years or so. It may even have begun earlier - movements of this nature start quietly in one place, and then spread and suddenly come onto one's radar. The development is a re-examination of the issue of ticket prices to symphony concerts, a change in attitude about price elasticity...

When I hear the cliché that "there is too much product out there," it really annoys me. It is given by those who believe they are responding to a decline in ticket sales to concerts. First, we don't know that there is a decline. Although we don't have complete enough statistics over a long period of time, in my gut I feel that there was a decline in the late 1990s through perhaps 2003 or 2004, after many many years of increases in attendance. And, anecdotally at least, I am seeing a reversal into a positive direction now. Even if it were true that there has been a decline in ticket sales, it does not necessarily demonstrate that "there is too much product out there." The full sentence would have to be "there is too much product out there at the price being asked for it." I have no doubt that if a major orchestra offered every ticket in the hall for $5 or $10, there would be lines around the block. (Yes, I am well aware that those prices are an economic impossibility).

Ticket prices have escalated over the past thirty or forty years at rates well beyond inflation. The cost of doing business in the orchestra world has forced the increases, and through much of the 1990s it seemed to work (although it may have kept some people away). Recently, I have seen a growing attention being paid to pricing, specifically to reducing ticket costs, not raising them. Different orchestras have tried different approaches. None as dramatic as the recent Baltimore Symphony Orchestra announcement of a $1 million grant from PNC Foundation specifically aimed at pricing every single subscription ticket to their main series of concerts in Meyerhoff Hall no higher than $25. While we may all be wondering what they'll do next year (it wouldn't surprise me if they were wondering that too), this is a bold, daring move.

Here are just a few other examples of new pricing strategies, a list not meant to be exhaustive - but rather meant to point out a trend.

• The Dallas Symphony Orchestra offers a subscription based on the model of a gym membership. Patrons purchase a card to enroll for $25, and then pay a fee of $55 every month of the season, which allows them to attend nearly any concert on the season calendar without reservations.

• The Duluth Superior Symphony Orchestra was one of the first to offer new subscribers a subscription at half-price for one year, much in the spirit of introductory magazine subscription offers. Not only did they sell a lot of them, but more impressively, those subscribers renewed at almost the normal rate of renewal for first-year subscribers. At least ten other orchestras have tried that same approach, most with similar success.

The Saint Paul Chamber Orchestra lowered all ticket prices for the Neighborhood Concert series, creating only two prices - $10 and $25 (they were as high as $47 prior to this decision). They experienced a 100% increase in attendance in the first two years, and increased ticket sales and contributions in support of the initiative have resulted in a 20% increase in revenue.

• During a recent 72-hour sale, the Fort Wayne Philharmonic sold all tickets for remaining concerts in their season for $20, and the sale was promoted at two local malls, where ensembles from the Orchestra performed. Ticket sales also took place online and via the box office. They had hoped to sell 600 tickets, and instead sold 1,534!

These are only some of the indications that more and more orchestras are examining ticket pricing and using reductions to attract new people into the concert hall. There are many more. I point all of this out because I see it as a change in direction in the field - a growing number of orchestras examining pricing strategies and finding imaginative ways to lower ticket prices to increase attendance. We're probably early in this trend to draw meaningful conclusions from it, but it is definitely a trend worth watching.

**Visit the League's Innovations Forum for more information on these ticket pricing strategies and other new, creative ideas that orchestras are implementing!**

Posted by hfogel at April 2, 2007 9:28 AM

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The Bellevue (Wash.) Philharmonic followed the lead of the Duluth Symphony. Last season we offered half-price subscriptions to new subscribers. We doubled our subscriptions in one year - from 340 to 679. Of these "newbies," forty-three per cent renewed this season at the regular full price. Next season we're offering an "early bird special:" anyone (new or renewal) who subscribes before July 31st gets an additional five per cent discount.

Posted by: Larry Fried at April 3, 2007 1:28 PM

Here in St. Louis, a friend and I actually have the same "too much product" concern, with weekends containing 3 subscription concerts where the attendance at all 3 would not even fill 2 nights. This may also reflect a decline in the population base for classical music here. For example, a chamber music series at one local university was terminated last year after a 21 year run, because of declining audiences in its last 4 years.

One case of trying to restructure pricing at Powell Hall was in the Terrace Circle ("bleacher seat") section, way up at the top of the balcony. Some aficionados swear that the best sound is there in the hall. Apparently someone at the Symphony years ago figured that out, and in an attempt to raise more revenue, jacked up the prices to the same as the next closer balcony section, Grand Circle. The result was that the population in that section evaported virtually overnight. The prices in Terrace Circle were finally lowered to below the Grand Circle cost roughly at the start of Robertson's tenure, but the population isn't fully back yet, and I'm not sure it ever will be. I bought one subscription there last season as a small statement, and I will do the same for next season.

The SLSO has a program where for most subscription concerts, 50 free tickets are set aside for those in the community of more limited means. Each person with a punchcard may use 6 of those free tickets per season. In practice, of course, it seems to be mainly aficionados who take advantage of this (I admit that I'm one of them). Many times, there aren't 50 people in line, not even close. That would change, of course, for someone like Itzhak Perlman, or if the chorus is singing. I've been telling people about this for years, and have persuaded some friends to join along. I'm only one person, to be sure.

For young people, there is the "Sound Check" program that offers the best available seats in the house at $10, for last minute purchases. The 6-ticket limit applies there too.

Of course, the 800-pound gorilla in the room is how to pay for all these discounts and keep symphony orchestras alive. That, I don't have an easy answer to, nor do I have Warren Buffett's fortune to be able to solve such worries at one stroke.

Posted by: Geo. at April 18, 2007 2:29 PM

In a world where people gladly pay $100 per ticket for nosebleed seats at any concert by a well-known rock band, and $100-plus each for tickets to a Broadway show, orchestral music is in desperate trouble if, in effect, it has to give its music away in order to get listeners.

Posted by: Ken LaFave at April 21, 2007 8:55 PM

The question of too much product struck me in Stockholm last month when there were four major concerts one weekend: a visiting British string quartet, two symphonic programs, and a performance of Bach and the next weekend, absolutely nothing above the high amateur level. It would seem that programmers within cities also need to keep one another in mind--not always possible, of course. But still.

Posted by: Nicholas Adams at April 24, 2007 6:48 AM