David Leonhardt’s piece in the Sunday New York Times on the increasingly variable price of Broadway tickets extends a discussion that has always been true‹different people are willing to pay different prices at different times for different events. The only real story here is that finally the arts managers are part of the process.
Ever since there have been tickets, there has been variable pricing. For big sellers, brokers or scalpers charged high premiums. For slow-selling events, managers “papered the house” with free seats for friends, family, students, and any other warm bodies they could find (not to mention ‘rush’ tickets, or the like). The problem was that the arts organization rarely benefited from the high-margin shows (with both scalpers and that pesky mission statement standing in the way of market-based prices), and only saw the losing end of the spectrum when they gave away their seats to fill the hall.
The analogy in the Times and elsewhere has been to airline tickets, where you could be sitting next to someone who paid twice as much, or half as much, as you did. British orchestras were exploring this very idea back in February by listening to the airlines themselves. The Chicago Symphony tried it a while back, but stumbled a bit with the public relations and patron perceptions it brought into play. In the nonprofit arts conference circuit, this topic is increasingly called ‘yield management.’
The problem is that, almost by definition, even the full face value of a ticket to a nonprofit cultural event doesn’t cover the true cost of the event (an associate in opera quips that they can sell out the house to rich people and still lose money). But with the increasing pressure for earned revenue, it’s good to see some nonprofits monkeying with price points. The smart ones won’t just be looking at opportunities to discount, but also opportunities to extract higher prices from those patrons who are able and willing to pay.
