{"id":3074,"date":"2024-09-04T04:48:58","date_gmt":"2024-09-04T11:48:58","guid":{"rendered":"https:\/\/www.artsjournal.com\/worth\/?p=3074"},"modified":"2024-09-08T10:31:28","modified_gmt":"2024-09-08T17:31:28","slug":"should-opera-companies-just-slash-their-ticket-prices","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2024\/09\/should-opera-companies-just-slash-their-ticket-prices\/","title":{"rendered":"Should opera companies just slash their ticket prices? Updated with responses to comments"},"content":{"rendered":"\n
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The Philadelphia Inquirer<\/em> reports that Opera Philadelphia is radically cutting their prices (the article is paywalled<\/a>, but you get 6 months of the Inquirer<\/em> for a buck, which is not a very high wall):<\/p>\n\n\n\n

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In the first 48 hours after unveiling its new \u201cpick your price\u201d ticket program Tuesday morning, Opera Philadelphia sold 5,876 tickets \u2014 an extraordinary response that has fueled company hopes that it could sell out the season.<\/p>\n\n\n\n

\u201cJust seeing what the numbers are was very, very moving to me, because for my entire career in opera I have believed that the art form is something that is for everybody and that the structures around it are the barriers,\u201d said Anthony Roth Costanzo, the opera\u2019s president and general manager. \u201cAnd if we sold 20 tickets on Monday and in the next two days we sold almost 6,000 tickets, that shows me that people want to come to the opera, and that in fact price was a barrier.\u201d<\/p>\n\n\n\n

The sales burst means that half of the tickets sold for the entire season were purchased in the two days after the pick-your-price program<\/a> was launched.<\/p>\n<\/blockquote>\n\n\n\n

Okay. But\u2026<\/p>\n\n\n\n

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The company\u2019s new ticket program gives patrons the choice to buy any seat for any opera at various levels from $11-$300, and in the first 48 hours, the majority of ticket buyers \u2014 4,539 \u2014 chose to pay $11.<\/p>\n\n\n\n

But 1,337 chose to pay more, and 440 patrons tacked on a voluntary donation at the time of their ticket purchase.<\/p>\n\n\n\n

Nearly two-thirds of ticket buyers had never before bought a ticket to an Opera Philadelphia production. \u2026<\/p>\n\n\n\n

The new \u201cpick your own\u201d program has brought the average ticket price way down. Last season, patrons paid an average ticket price of $86. From Tuesday to Thursday morning, the average price for a ticket sold was $17.<\/p>\n<\/blockquote>\n\n\n\n

So, let\u2019s pause there. Opera is a very expensive thing to produce. To a large degree the costs are endogenous – productions are more opulent if there is a customer base willing to pay for such opulence. This is a feature of how many nonprofits work – colleges and hospitals as well (I\u2019ll make this the subject of my next post, come to think of it). But you can\u2019t do much on $17 per person, and so this whole strategy is pretty much based on \u201cwe will fund our productions through philanthropy\u201d. Well, it is a strategy of sorts. But how sound is it?<\/p>\n\n\n\n

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But how the math nets out in the end remains to be seen. Last season\u2019s production of Verdi\u2019s Simon Boccanegra<\/a><\/em>, for instance, had a higher average ticket price, but sold just 51% of available seats. Even if all three operas this season sell out, Costanzo expects that the lower ticket prices will mean a total ticket revenue that will be lower this season than last.<\/p>\n\n\n\n

And that\u2019s OK, he says, since ticket revenue makes up such a small percentage of the revenue pie anyway \u2014 just 13% in the 2023-24 season.<\/p>\n<\/blockquote>\n\n\n\n

So, a cut in prices means less revenue, i.e. the percentage increase in the number of tickets sold is less than the percentage by which ticket prices have been cut, i.e. demand is inelastic, which we all (I think?) know to be generally the case in the arts. That ticket revenue is a small proportion of the total and so it doesn\u2019t matter if it falls is an interesting perspective, but does not bode well for future finances.<\/p>\n\n\n\n

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\u201cWhat I\u2019m trying to reinforce for everyone right now is that the tickets are not providing a significant source of income,\u201d Costanzo said. \u201cAnd therefore, the art itself and the access to that art is what we prioritize, and the experience of being in an opera house full of diverse people in all demographics, and how that changes the feeling of the art form.\u201d<\/p>\n<\/blockquote>\n\n\n\n

And here I have questions. My work on pricing – see my book<\/a>, but in this matter especially this essay<\/a> – summarizes the body of work that has been done on pricing the high arts, and, in a nutshell, cutting prices does not<\/em> lead to a change in the demographics of your audience. Opera with cheap tickets will draw the highly-formally educated and mostly better-off financially, who will say \u201ccool: cheap tickets\u201d. And for all of your existing<\/em> customers, again almost entirely sitting on the right-hand side of the socio-economic distribution, you are saying \u201cgood news, your opera tickets just got cheaper; some donors will cover the costs.\u201d<\/p>\n\n\n\n

In the arts management world there is a lot of attention paid to \u201cbarriers\u201d to opera attendance. But it is a mistake to think that prices are the main \u201cbarrier\u201d; the actual primary barrier to attending opera is that most people don\u2019t like opera. They don\u2019t listen to recordings of it, they don\u2019t listen to the Met broadcasts on Saturday afternoons, they don\u2019t find works on Spotify, they just don\u2019t like it even when it\u2019s free. Now I don\u2019t think that this is the biggest problem facing the arts – producing compelling work that will draw audiences who do<\/em> like the art form, and encouraging education about how to better appreciate it, is more important than seeing if you can get a majority of the population to be able to sing the chorus from La Traviata <\/em>by memory.<\/p>\n\n\n\n

Tickets for the Flyers-Bruins<\/a> game on November 2 start at $99 for the top of the nosebleed section and go higher from there. And there aren\u2019t many tickets left. No barriers there.<\/p>\n\n\n\n

And so I am really dubious about this sort of strategy – cutting your own revenue when you don\u2019t have a lot of wiggle room on a false promise of bringing opera to \u201cthe people.\u201d I don\u2019t see the gain, or how it is sustainable.<\/p>\n\n\n\n

Cross-posted at https:\/\/michaelrushton.substack.com\/<\/a><\/p>\n\n\n\n

Updates:<\/p>\n\n\n\n

I always welcome comments – even if you really disagree – so do feel free.<\/p>\n\n\n\n

Antonio raises a few different points. Yes, it is true that there are direct grants from different levels of government, and the tax expenditures associated with charitable donations to the opera. But I’m not sure it should follow that as a result of this there ought to be a reduction in ticket prices. There isn’t some formula for optimal pricing in the presence of grants, but I would return to my main point here: a reduction in prices is a gift to the mostly well-off, who were quite content to pay the old, higher prices. Lower ticket revenue, and a consistent level of production values, would mean the revenue shortfall must be made up somewhere. More funds from the public sector? I don’t see it.<\/p>\n\n\n\n

As for “education”, this is admittedly confusing language. But the 501(c)(3) status given to arts organizations on the basis of education does not strictly mean “programs explicitly devoted to arts education”. The performances themselves, or exhibits at an art museum, are in and of themselves considered to be “educational”. And they are. When I attend our local opera company, I learn something about the artform purely from being a part of the audience.<\/p>\n\n\n\n

Bob and Joanne both consider the question of whether the new customers buying the very cheap tickets will ever return, or will only return if prices remain that low. I side with Joanne here – I don’t see this as a great long-run strategy for ultimately building ticket revenue. Budgeting and pricing a big-money arts organization requires strategy that takes pains to avoid wishful thinking, and I think that’s what is going on here.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Philadelphia Inquirer reports that Opera Philadelphia is radically cutting their prices (the article is paywalled, but you get 6 months of the Inquirer for 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 tickets \u2014 an extraordinary response […]<\/p>\n","protected":false},"author":3,"featured_media":3075,"comment_status":"open","ping_status":"closed","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-3074","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\/2024\/09\/image.png","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-NA","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":3100,"url":"https:\/\/www.artsjournal.com\/worth\/2024\/10\/the-predictable-result-of-arts-organizations-and-cell-phones\/","url_meta":{"origin":3074,"position":0},"title":"The predictable result of arts organizations and cell phones","author":"Michael Rushton","date":"October 1, 2024","format":false,"excerpt":"The\u00a0Inquirer\u00a0reports that cell phones\u00a0are presenting a problem at the Philadelphia Orchestra: Another orchestra season, another soul-killing cell phone interruption. As banal as it may be, Saturday night\u2019s\u00a0mid-Bruckner cell phone incident\u00a0at the Philadelphia Orchestra is a painful thing to ponder, a kind of\u00a0musicus interruptus\u00a0from which a performance never really recovers. Yannick\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\/10\/image.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/10\/image.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/10\/image.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":1018,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/01\/pricing-at-the-met\/","url_meta":{"origin":3074,"position":1},"title":"Pricing at the Met","author":"Michael Rushton","date":"January 29, 2014","format":false,"excerpt":"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\": \u00a0 \u00a0 \u00a0 The Metropolitan Opera's $311 million budget fell\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"not just a theory, it's the law","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/01\/demand.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":495,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/03\/voluntary-price-discrimination-is-not-a-new-idea\/","url_meta":{"origin":3074,"position":2},"title":"Voluntary price discrimination is not a new idea","author":"Michael Rushton","date":"March 18, 2013","format":false,"excerpt":"Alyssa Rosenberg on crowdsourcing new movies: One thing that\u2019s striking about the Veronica Mars Kickstarter is that you have to give at least $35, more than four times the cost of the average American movie ticket in 2012, to get a digital download of the movie. You have to give\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"looking for funding","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/03\/vm.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1043,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/02\/pricing-to-fill-the-house\/","url_meta":{"origin":3074,"position":3},"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. 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