At the Art Newspaper, Adrian Ellis claims that they do: Few cities command the accolade “great” or even “liveable” without a significant cultural presence. Today, whether the question is “Where is the best place to bring up your family?”, “Where do knowledge workers congregate?” or “What attracts inward investment?”, “Cities with a rich cultural life” is the most common answer, alongside those with good public education, low crime rates and decent transport. (They are usually the same places.) In this context “culture” usually means museums … [Read more...]
The great small plate debate
My very first post for this blog was about why for some products - cable TV, museums, Disneyland - you are made to purchase a "bundle" of items (one hundred channels, permission to visit many rooms in the museum, all the rides you can do in a day) rather than being able to buy a la carte (one or two channels, just a ticket to see the abstract expressionists, one ride on Magic Mountain). In the latter two cases it might be just too hard administratively to make it work, but that's not true of cable, where it is easy and costless for the provider … [Read more...]
Cost disease, wages and skills
Cost disease is often cited as an economic phenomenon that poses particular challenges in the arts, especially the live performing arts. In a nutshell, here is the theory: productivity is defined as the value of output produced per worker. Rising income over time depends upon rising productivity: if the economy is not producing more output, it cannot earn higher incomes. We earn more per person than our grandparents did because we produce more. Productivity has risen over time because we have more capital stock (machines and buildings and … [Read more...]
Today in background noise
Reported today on Artsjournal.com: Researchers report the soothing sounds of a Mozart minuet boosts the ability of children and seniors to focus on a task and ignore extraneous information. (Pacific Standard) Reported today on Artsjournal.com: Researchers "found that a level of ambient noise typical of a bustling coffee shop or a television playing in a living room, about 70 decibels, enhanced performance compared with the relative quiet of 50 decibels" (New York Times) Bonus video: http://www.youtube.com/watch?v=j5Y4wVWz-AQ … [Read more...]
Exit, voice and prices
In the New Yorker this week, Malcolm Gladwell reviews (with high praise) a new biography by Jeremy Adelman, Worldly Philosopher: The Odyssey of Albert O. Hirschman. I have not read the biography, but I do highly recommend Gladwell's essay. One of Hirschman's most famous works is Exit, Voice, and Loyalty. What do we do when we become unhappy in one of our business relationships: a coffee shop whose service is not as friendly as it used to be, a workplace that has become problematic? Traditional economic theory as taught in textbooks answers: … [Read more...]
Event planning
At the Freakonomics blog, thinking about how to generate revenues from creative goods when digital copies are so readily available: Products – especially digital ones – are often very easy to copy. But experiences can be highly copy-resistant. Just think of music: it’s easy to pirate a song, but it’s very difficult to effectively pirate a live show. The Los Angeles Times reports on a package deal to fans waiting for World War Z: The package will include an advance screening in RealD 3-D of the Brad Pitt movie at select theaters nationwide … [Read more...]
Scaling the airplane
In my previous post I wrote about companies offering superior levels of service (for a price) that necessarily involve making the service worse for other customers, such as offering a deal that allows high-paying customers to cut in line where there is a queue. Here is another example. Airlines are trying to further price discriminate in seating. The old model of simple differentiation between business and coach class is giving way to finer gradations in the coach section, where passengers can pay for extra legroom. But just as there is no … [Read more...]
Paying for position
The New York Times reports on Universal Studios Hollywood: It has introduced a $299 V.I.P. ticket, just in time for the summer high season, that comes with valet parking, breakfast in a luxury lounge, special access to Universal’s back lot, unlimited line-skipping and a fancy lunch. V.I.P. visitors also receive “amenity kits,” which include mints, a poncho to wear on the “Jurassic Park” water ride and bottles of hand sanitizer. Disney still serves up its roller coasters the old-fashioned way — one rank for everyone, white collar next to … [Read more...]
The enduring mystery of scalpers
I posted re scalpers a few weeks ago. The forthcoming New York Times magazine has a story on ticket resale. It is, well, unsatisfying. The problem at hand is this: if so much money is to be made through ticket resale, why have the artists or concert promoters not done what they can to capture that money? Why leave it on the table for scalpers and StubHub? Put in other terms, why aren't initial ticket prices closer to the level where the resulting demand would more closely approximate the capacity of the venue? From the Times: [Bruce] … [Read more...]
Two-part pricing in the cafe
The Huffington Post reports: A new cafe in Wiesbaden, Germany is proving the old adage that time is money. Instead of charging for coffee, Slow Time Cafe is charging for time. When customers enter the cafe, they are given a wristband with the time, and charged €2.00 (about $2.59), which covers the first half hour. Then, they are charged €0.05 per minute ($0.06), or €3.00 per hour ($3.88). They are allowed to have as much coffee as they want, and can bring in their own food. Can this make sense? I've posted about the two-part pricing … [Read more...]