For What It's Worth

Today the Wall Street Journal and the New York Times report on statements from the Metropolitan Opera regarding recent changes in prices and box office revenues. The WSJ reports, under the headline "Met Opera Suffers Budget Shortfall From Pricing Backlash":       The Metropolitan Opera's $311 million budget fell short by $2.8 million last year, after a ticket price increase backfired and caused attendance to drop, according to a newly released financial-disclosure document. Last February, Met officials announced a … [Read more...]

It is great to be back at Artsjournal, after a fall semester of teaching a couple of courses, taking an introductory course in Mandarin, finishing up some academic papers and, most relevant to this space, completing a manuscript of a book on strategic pricing in the arts. I'll give updates as that moves along. For now, I plan on getting back to regular posting, and I welcome suggestions for any questions on pricing in the arts that might occur to you. To get started, I came across this article in the journal Psychological Science by Andrew … [Read more...]

Thanks for the comments on my recent post, Whatever, on pay-what-you-will pricing. Joanna writes: There was the instance in 2007 when the band Radiohead sold their album, In Rainbows, on a pay-what-you-can basis. My understanding is that even this extremely popular band that doesn’t have to do much to get people to buy their records figured out this strategy didn’t work in generating revenue. Agreed. And Radiohead's strategy has to be seen in the context of using sales or distribution of recordings as a means of generating demand for … [Read more...]

The Washington Post reports that Forum Theater will not charge an advance price on tickets, but instead will have audience members pay after the show, whatever amount they think is right: Michael Dove, Forum’s artistic director, says that he has long been concerned about what it means to be a nonprofit theater — an enterprise supported to some degree by taxpayers — that is beyond the financial reach of many consumers. “The one thing I wanted to take a crack at is how do we make theater accessible to everyone, and get past the idea that it’s … [Read more...]

At Marginal Revolution (which often has posts on the economics of the arts - you should be reading it!), Tyler Cowen points us to Paleofuture, which gives a 1940s version of the 'kitchen of the future.' We would no longer use dishes ('antiques') since our food would be processed and dehydrated. The 1960s cartoon The Jetsons imagined some similar changes in interior design, although the cooking and cleaning would be done by a robot maid. What has interested me about visions of the future is that they share a common bias: the aspect of the … [Read more...]

The Guardian reports: While the high price of theatre tickets is well known, it still comes as a surprise to discover that some members of the audience for Arrivals & Departures, the latest play by Alan Ayckbourn, may have paid £1,500 for the privilege. This is the price of the ultimate luxury package on offer from the Stephen Joseph theatre in Scarborough; there are others on offer for £750. The £1,500 ticket involves access to rehearsals, backstage tours, Q and A sessions with Ayckbourn, as well as a seat at the finished play, about a … [Read more...]

Two stories linked by artsjournal.com today about Amazon: gigaom.com (?) on how Amazon is further cutting prices on hardbacks, and the American Booksellers Association upset that President Obama held a major speech on jobs at an Amazon warehouse. Observations: First, while I possess no special insights into what goes on behind closed doors at Amazon, the evidence is certainly that their pricing strategy is all about market share. And I have always had trouble understanding what motivates this goal. Maximizing profits, I can understand, … [Read more...]

Many posts in this blog have been about how arts organizations, especially in the nonprofit or public sectors, can learn a thing or two about strategic pricing from other organizations, including non-arts commercial firms. But at The Economist, blogger Schumpeter writes that the private sector is not all that sharp when it comes to pricing either: Firms should simply take pricing more seriously: have a clear policy and make everyone stick to it. Obvious? At a recent conference organised by Simon-Kucher, the 100 or so delegates were asked to … [Read more...]

I am working on a project, which is taking many more hours than expected. While I love the idea of spending all my summer afternoons and evenings hanging out in the backyard with my children, there are times where I simply need to get to the office to get some writing done, where editing text at the dining room table is just not going to work. There are college students in this town who are great caregivers, who could use some money to get them through the school year, and who have time on their hands in late July. I am (relatively) cash-rich … [Read more...]

At Slate, Matt Yglesias reports on attendance at a WNBA game in DC, wondering why the stands are not full: Now it's easy to tell a story where the demand just isn't that price-responsive and so the revenue-maximizing price doesn't generate sellouts. But this is what price discrimination is for? Where's the senior discount? Where's the kids discount? And heck, just give tickets away for free. I'd be trying to find every girls sports organization in town and give them blocks of free tickets. You'd make some money at the concession stand, you'd … [Read more...]