As technology has come available that allows performing arts organizations to adjust prices in light of demand, the question has arisen: is it appropriate for nonprofit theaters to employ dynamic pricing? See here and here for example. Let's consider the issue from a different angle: why is dynamic pricing so rarely used in the for-profit sector? For example, at my local multiplex cinema, I will pay $5 for a weekday matinee, $7.50 for weekday evening or weekend matinee, and $10 for a weekend evening. It doesn't matter whether the film I … [Read more...]
Targets, The Cost of Bread, and Nonprofit Arts Pricing
My previous post drew lessons for museum pricing from what we observe in the prices set by cable television providers. But how can for-profit pricing be relevant to nonprofit museums, to orchestras and opera? Don’t the nonprofit arts, unlike cable companies, have a mission to be accessible to all patrons, regardless of income? Let me draw from what might seem at first a very unrelated policy issue. All rich countries except the US raise government revenue through value-added taxes (VAT). These are sales taxes applied to all goods and … [Read more...]
Museums, Amusement Parks and Cable TV
Should museums charge visitors according to the length of their visit? In a recent paper Bruno Frey and Lasse Steiner argue they should. We pay per hour when we park our cars, so why not when we go to view art? This question came to mind during the recent flare up over the pricing of cable television. Yes, cable television and art museums (and amusement parks!) have something in common. Those of you who subscribe to cable television know that even the most basic package contains a lot of channels, many of which you never intend to watch. … [Read more...]