Good news, bad news

The good news, from a Playbill Arts piece linked on ArtsJournal today: the Baltimore Symphony’s reduced-price subscription plan seems to be working, maybe even spectacularly.

The Baltimore Sun reports that when the box office opened last Saturday morning (March 3), about 150 people were already in line at Meyerhoff Symphony Hall, ready to snap up the tickets [writes Vivien Schweitzer, who also reviews music for The New York Times]. Music director-designate Marin Alsop was on hand to give out doughnuts to the eager subscribers.…

Charles Shubow, an administrative judge, told the Sun that he hadn’t subscribed to the Symphony for years, but Alsop’s appointment prompted his return.

Lawyer Brendan Hurson, 29, said, “I wouldn’t be a subscriber if not for the deal. If you do the math, it’s amazing.”…

Paul Meecham, Baltimore Symphony president and chief executive, told the Sun that subscription renewals have increased, and those who have renewed so far have purchased close to 16 tickets each this year, up 25 percent from this time last year. Despite the decrease in price, subscription revenue is five times higher than this time last year.

The bad news:

According to the Sun, Meecham would not commit to offering the deal next year, however. The new pricing was made possible by a $1 million grant from the PNC Foundation, the charitable arm of Pittsburgh-based PNC Financial Services Group.

So here we have this exciting initiative, which could energize this or any other orchestra (not to mention bring happiness to a lot of people who’d love to hear the music). And it’s only possible with a large shot of outside funding. (Apparently the five-times-higher-revenue is a very preliminary measure; apparently the orchestra expects to bring in less money overall, hence the need for funding. Orchestra marketing people have often told me that, even if they sell more tickets by lowering prices, their overall revenue will go down.)

This is heartbreaking. Baltimore can only continue this initiative with $1 million each year in special funding? A million dollars is a lot of money. If the economy sags, as eventually it will, this program could go right out the window, even if it continues next year or the year after that.

This makes me think of the stats I presented earlier, about the declining proportion of orchestra income that comes from ticket sales, a decline that’s been going on for around 70 years.

As time goes on, orchestras have had to raise more and more money, simply to stay alive. And now we might be at a new stage in this impasse. Ticket prices are too high. Everybody says this, and the results of lowering them can be dramatic. But if you lower prices, you lose money. So what happens if orchestras decide they don’t have any choice — if they find they have to lower prices, in order to redevelop their audience? (And re-energize their relationship to their communities.) The proportion of their budget that comes from ticket sales will fall still more. It approached 100 percent (at least at some of the biggest orchestras) in the 1930s. It dropped, in the 1960s and 1970s, to 50-odd percent, then 40-odd percent, and more recently to something like 25 to 30 percent.

What would it fall to now, if orchestras decide they have to lower ticket prices? 20 percent? 15 percent? Once again, orchestras will have to find new sources of money, just to stay alive.

It’s enough to break your heart.

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  1. Rob Gold says

    I just went to the Baltimore Symphony’s website to look at their current prices for the 2006-07 season. The low price for a single ticket to a regular classical concert is now $25. I assume that the subscription price for the upper tier seats is discounted from that.

    So the BSO’s much touted $25 on subscription for every seat is actually a regressive move, raising prices for the most cash-strapped music lovers, while giving a huge break (50% or more off) to the Gucci/Mercedes crowd who have renewal rights to the best box seats.

    Orchestras need to redefine marketing success from just total revenue to pricing that will maximize revenue for full houses. (I accept that, for some, we shouldn’t define our audience goals on the basis of the seating capacity of a century old hall.)

    When I was senior marketing officer for Ottawa’s National Arts Centre Orchestra (pairs of classical concerts in a 2,132 seat hall in a market of 1 million people), we lowered 2006-07 season prices for the top balcony by about 30%, and raised prices in the balcony boxes and best orchestra seats by about 7%-10%. The goal was to sell enough more balcony seats to achieve revenue neutral results, or better. While I left NACO shortly after these prices were announced, my understanding is that balcony sales are way up, but not enough to offset the “foregone revenue.” Of course, other issues like programming and other marketing conditions also effect this outcome.

    Every community has a large population of educated music lovers in low paying jobs (teachers non-profit workers, etc.). There are often enough of these folks who want to attend but simply cannot afford to. They won’t make us rich, but they can fill our halls. This is the second leg of my two part equation: price your tickets in a way that results in maximum revenues with full houses.

    A variation on this strategy helped raise the Indianapolis Symphony’s classical sales from 56% of capacity to 78% when I was director of marketing there (1990-94).

    My favorite retort to the old “classical music is dying” argument is “I dunno, we sell every ticket we’ve got and have a waiting list.”

    Think of the effect of that on programming!

  2. Larry Fried says

    The Bellevue (Wash.) Philharmonic offered a “half price for brand new subscribers” promotion last season. We doubled our subscriptions in one year – from 340 to 679. Of these “newbies,” 43% renewed this year at the regular price, i.e., double what they paid last year. We are a very small budget orchestra ($600,000/year) and play in a very small hall (410 seats) but it was a great thing for us and many of the newbies have since become donors and/or have attended fundraising events. We did the half-price promotion without any underwriting or corporate sponsorship. I got the idea from the Duluth-Superior Symphony, which had done a half price deal a few years ago.

    Thanks, Larry, for this inspiring story. Congratulations.

    The bit about the subscribers renewing the next year at the full rate reminds me of something the St. Paul Chamber Orchestra did. They lowered subscription prices for (if I remember this right) their “neighborhood” series, which they do in locations outside their main concert hall. But they invited subscribers to donate the difference between the old price and the discounted price — and many did.

  3. Paul A. Alter says

    If orchestras met a large part of their budgets from ticket sales in the early days, it is because they were susidized by the musicians, whose meagre salaries could cover only a part of their living expences.

    That is, musicians worked for the orchestras for starvation wages, which permitted the orchestras to keep going. That constitutes a subsidy.

    Even at that, the orchestras were constantly scrounging for money. I hate to tell you the number of times the St. Louis SO raided the musicians’ retirement fund in order to make up its deficit. The orchestra would give a benefit concert to raise money for the retirement fund but, when cash was needed, the orchestra would glom on to it.

    Bach’s orchestra was subsidized. Ditto Haydn. Beethoven got his music played by appearing as soloist, thus drawing a big enough crowd to pay for playing his symphonies. Beecham paid for the various orchestras he founded out of his own pocket. Could the Vienna Philharmonic survive if its members do not have day jobs with the opera company? Other examples available upon demand.

    In the 1930s, the Federal Government subsidized the WPA symphony orchestras that kept some musicians from starving.

    The NBC and Philharmonia orchestras were subsidized, but folded when they tried to make it on their own.

    There is a tendency to lump all the classical music problems together, which makes them impossible to address. They are, of course, interrepalted, but we need to focus on one at a time:

    A. Creating music lovers (for classical music).

    B. Getting music lovers into the seats in the concert hall.

    C. Financial support for the orchestras.

    D. Creating public awareness of the cultural, financial, and social importance of orchestras to the community

    If lowering prices will accomplish Point B, then lower the prices. When there are enough people in those seats, somebody will figure out a way to accomplish Point C — in other words, they will find the money to subsidize the orchestras, which is the only way to keep them alive.

    There’s no magic bullet.

    I think Paul’s last point is right on target. If there’s a surge of interest — if people are flocking to concerts — orchestras will find some way to survive. That’s why any long-term decline in ticket sales would be the most serious problem orchestras can face.

  4. musician says

    If a low ticket price will get a full or fuller house every night it should not be a stretch to think that an annual 1 million gift should be hard to attain. I play in an orchestra that with a silly smile our MD can raise money for superficial items that seem to have to no impact and get tossed aside. Large non profits go through money like a blast furnace. It is not about the money. The money is there and will be there whatever your thoughts on the economy are. Because we don’t always get it does not mean it is not available. We service such a small percentage of our population it is not hard to understand why our donor base is so small. If we were to do some of the things that you talk about in this blog maybe we will sell some more tickets. Maybe we could feel better about spending a few people’s money. Expenses will never go down. If you cut the pay of the players you no longer have a full time orchestra, the expense of which will never be easy to meet. That is true in New York, LA, Vienna, or anywhere. It only becomes worth it to boards, coporate sponsors, and donors if we could sell the hall.

  5. Paul A. Alter says

    Musician is right that orchestras service such a small portion of the population. But we need to consider whether it is a more important potion than more widely attended things such as sports.

    There have been articles lately that the success of businesses now depends upon creative people. For example, from this mornings Pittsburgh Post-Gazette:

    The skills that matter in the 21st century economy aren’t necessarily the logical, number-crunching analystical abilities that served as a possport to job security for past generations.

    “Design, creativity and empathy — so-called ‘right brain’ attributes typically associated with the ars — are among the fundamental qualities the work force of the future needs to master, innovation expert Dan Pink contends.”

    In other words, the people who are most likely to create the business that keeps towns prosperous are those who are most likely to absorb music. They are not as numerous as the others, but while the jobs of the others are being outsourced to third world countries, the music lovers will be inventing new businesses and generating dollars.

    Which town is more likely to attract right-brainer, art-loving, entrepenueurs — the one with or the one without a symphony orchestra?

    There’s no need to be apologetic about the value of orchestras.

    I want to quibble about one item. Orchestras don’t service the population; orchestras service the music and the population is privileged to attend the concerts. I’d be willing to see an orchestra playing to an audience of some dozen people, if that meant survival for the orchestra.

    Paul, thanks as ever for your sharp and lively comments. But I do disagrfee with one point you made. There’s been a lot written about the new generation of creative people cities want to attract. See, for instance, Richard Florida’s book, “The Rise of the Creative Class.” Florida is quite specific about the change in culture that this new generation represents. He says, in so many words, that cities no longer need orchestras (or opera companies, or ballet companies) to attract creative people. Instead, they need a strong local music scene (specifically not a classical music scene), and visible diversity. This is what this new generation actually wants.

    Of course, Florida and others might be wrong. But a New York Times piece within the last year talked in some detail about what cities now do, to attract creative people, and orchestras weren’t mentioned at all. Some cities were making sure they had an attractive network of bike paths.

    Again, this approach might be wrong. But I do think that the new culture of people 40 and under — or by now is it 50 and under? — is something the classical music world hasn’t yet learned to understand.

  6. Paul A. Alter says

    Here’s some personal experience to support Greg’s comments on my last posting.

    At one time, I worked for a nonprofit in Pittsburgh. The former head of the organization was retiring, so they went on a talent hunt. They interviewed several persons who were suitable for the position, but couldn’t induce them to move to Pittsburgh.

    And, of course, Pittsburgh has a highly-regarded symphony orchestra.

    So, this is a puzzle. We know that right-brainers are creative people, of the type from which music consumers seem to come. The challenge is to find the bait that will draw them to it.

    I think orchestras will have to become — at least in some of their offerings — more like the things these people already like. Maybe my “Good Things” posts give some examples of how others have done this, examples that orchestras might emulate. In two cities I’ve worked in, St. Louis and Cleveland, neighborhoods developed that attract these creative people. In Cleveland, that neighborhood is right by Severance Hall, where the orchestra plays, and was developed deliberately by a number of arts institutions. The orchestras could — if they haven’t done this already — try to become active in these neighborhoods.

    And of course the simplest way to start would be to sit down with some of this target audience, and find out what the orchestra could mean to them.