{"id":1018,"date":"2014-01-29T13:45:07","date_gmt":"2014-01-29T21:45:07","guid":{"rendered":"http:\/\/www.artsjournal.com\/worth\/?p=1018"},"modified":"2014-01-29T13:45:07","modified_gmt":"2014-01-29T21:45:07","slug":"pricing-at-the-met","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2014\/01\/pricing-at-the-met\/","title":{"rendered":"Pricing at the Met"},"content":{"rendered":"

\"not<\/a>Today the Wall Street Journal<\/em><\/a> and the New York Times<\/em><\/a> report on statements<\/a> 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”:<\/p>\n

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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.<\/p>\n

Last February, Met officials announced a reversal of the price increase, acknowledging that their foray into dynamic pricing had had unintended consequences. The financial disclosure, filed as part of the requirements of a $100 million bond offering in 2013, shows average attendance fell to 79% of the opera house’s capacity\u2014even lower than officials projected last February.<\/p>\n

Average attendance for the previous year was 84% of capacity.<\/p>\n

Officials have seen this season’s attendance bounce back, after reversing the price increase.<\/p><\/blockquote>\n

A few things to note. First, “pricing backlash” seems a bit overblown. The Met found that ticket demand was more elastic than they had anticipated, and so reversed course to a degree. But finding the right prices is always going to involve a lot of trial and error, and often the only way to learn anything about demand is to experiment, see what happens, and learn from that.<\/p>\n

Second, it is misleading to call what the Met did “dynamic pricing”, which involves changing prices over time for a given performance according to how demand to that point exceeds or falls short of expectations. The Met didn’t do that – they just tried a different set of prices for a season and found that they had aimed too high, so the next season was set lower (here<\/a> is the Times from a year ago with that news). Experiments in pricing are a good idea, but dynamic pricing is a bit risky – price cuts mid-stream, essentially a way of proclaiming a realization of lower-than-expected demand, can send a signal to on-the-fence potential buyers that the show is low quality, and so not worth seeing.<\/p>\n

Third, I’m not sure how useful it is to focus too much on audience as a percent of capacity. Because there are limits to the degree the presenter can price discriminate amongst ticket-buyers, it can sometimes be the case that sales below capacity is the result of prudent, not faulty, pricing. It’s enjoyable to attend a show with near full house, but attaining that goal can mean, for some arts organizations, significant losses in revenue as prices are cut well below optimum in an effort to fill every seat.<\/p>\n","protected":false},"excerpt":{"rendered":"

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 […]<\/p>\n","protected":false},"author":3,"featured_media":1019,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-1018","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-issues","8":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/01\/demand.png","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-gq","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1330,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/06\/opera-and-arts-education\/","url_meta":{"origin":1018,"position":0},"title":"Opera and arts education","author":"Michael Rushton","date":"June 9, 2014","format":false,"excerpt":"Audiences for live performance of opera are aging and declining. What ought to be done about that? General Manager of New York's Metropolitan Opera, Peter Gelb, in an interview with the BBC (on which I posted, on a different topic, yesterday) has this to say: \"The box office has not\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"much to learn","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/06\/NYCschool.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":1207,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/04\/nonprofit-costs-are-driven-by-revenues\/","url_meta":{"origin":1018,"position":1},"title":"Nonprofit costs are driven by revenues","author":"Michael Rushton","date":"April 8, 2014","format":false,"excerpt":"This post takes us through health care, college sports, and opera... One of the first things arts administration students are taught about nonprofit organizations is that by law, and by definition, nonprofits are not to distribute any net earnings to managers or shareholders, but rather any revenues over costs must\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"lots of rent to collect","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/04\/Saban.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":1043,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/02\/pricing-to-fill-the-house\/","url_meta":{"origin":1018,"position":2},"title":"Pricing to fill the house","author":"Michael Rushton","date":"February 13, 2014","format":false,"excerpt":"ArtsJournal links to this piece from Britain's Guardian on pricing at the Met (see here for an earlier post of mine on the subject). Tom Service writes: They filled just 79% of the seats in that huge, red-velvet covered house, and made only 69% of their projected box-office revenue. For\u2026","rel":"","context":"With 1 comment","block_context":{"text":"With 1 comment","link":"https:\/\/www.artsjournal.com\/worth\/2014\/02\/pricing-to-fill-the-house\/#comments"},"img":{"alt_text":"not fun","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/02\/Man-Sitting-Alone-In-Empt-001.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":3074,"url":"https:\/\/www.artsjournal.com\/worth\/2024\/09\/should-opera-companies-just-slash-their-ticket-prices\/","url_meta":{"origin":1018,"position":3},"title":"Should opera companies just slash their ticket prices? Updated with responses to comments","author":"Michael Rushton","date":"September 4, 2024","format":false,"excerpt":"The\u00a0Philadelphia Inquirer\u00a0reports that Opera Philadelphia is radically cutting their prices (the article is paywalled, but you get 6 months of the\u00a0Inquirer\u00a0for a buck, which is not a very high wall): In the first 48 hours after unveiling its new \u201cpick your price\u201d ticket program Tuesday morning, Opera Philadelphia sold 5,876\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/09\/image.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/09\/image.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/09\/image.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/09\/image.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/09\/image.png?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/09\/image.png?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":528,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/03\/museums-are-not-expensive\/","url_meta":{"origin":1018,"position":4},"title":"Museums are not expensive","author":"Michael Rushton","date":"March 26, 2013","format":false,"excerpt":"New York's Metropolitan Museum of Art is being sued for strongly suggesting that its \"recommended\" donation for entry is in fact required of visitors. Associated Press reports: 'The museum was designed to be open to everyone, without regard to their financial circumstances,' said Arnold Weiss, one of two attorneys who\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"a bargain!","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/03\/met-prices-300x199.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1325,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/06\/cutting-wages-is-hard-to-do\/","url_meta":{"origin":1018,"position":5},"title":"Cutting wages is hard to do","author":"Michael Rushton","date":"June 8, 2014","format":false,"excerpt":"Peter Gelb says New York's Metropolitan Opera will go broke within the next few years without wage cuts. The BBC reports: He proposed cutting 16% of its $200m (\u00a3119m) labour costs by changing work rules for the orchestra and chorus. Gelb also defended spending $169,000 (\u00a3100,000) on a poppy field\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"what goes up is tough to get down","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/06\/ladder.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1018","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/comments?post=1018"}],"version-history":[{"count":0,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1018\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media\/1019"}],"wp:attachment":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media?parent=1018"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/categories?post=1018"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/tags?post=1018"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}