{"id":363,"date":"2013-02-24T05:58:58","date_gmt":"2013-02-24T13:58:58","guid":{"rendered":"http:\/\/www.artsjournal.com\/worth\/?p=363"},"modified":"2013-02-24T05:58:58","modified_gmt":"2013-02-24T13:58:58","slug":"museums-amusement-parks-and-cable-tv","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2013\/02\/museums-amusement-parks-and-cable-tv\/","title":{"rendered":"Museums, Amusement Parks and Cable TV"},"content":{"rendered":"
\""Zero<\/a>

From the National Archives and Records Administration, and Wikimedia Commons.<\/p><\/div>\n

Should museums charge visitors according to the length of their visit? \u00a0In a recent paper<\/a> 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.<\/p>\n

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. Comcast\u2019s \u201cDigital Starter\u201d has about eighty channels, including ESPN, PBS Arts, Spike, Jewelry Channel, a collection where it is impossible to imagine anybody watching all of them. Why can’t we just buy the few channels we will actually watch? Those who are not sports fans get particularly annoyed<\/a> that cable prices are rising as different sports channels come online and increase the fees to all subscribers, even those with no interest. Matt Yglesias<\/a> suggests that lack of competition amongst cable providers is the real problem, but I don\u2019t agree: if offering channels to customers a la carte were a good deal for viewers, some entrepreneur would start a service that offers such a model. But that hasn\u2019t happened.<\/p>\n

The reasoning was first explained in 1971 by Walter Oi, in what he called the \u201cDisneyland dilemma<\/a>.\u201d Consider an amusement park, which has to decide what to charge for admission, and what to charge per ride. The higher the one price, the lower the other must be to continue to attract customers. He showed the solution to this \u201ctwo-part pricing\u201d problem is to first set the price of rides at the cost of providing a ride to one more customer (what economists call \u201cmarginal cost\u201d), and then set the admission price according to the demand for admissions given the ride price that has been selected. If the cost of providing a ride to one more customer is effectively zero, then give free rides, and price admission accordingly.<\/p>\n

In cable television, channels are like rides \u2013 customers pay a subscription fee, and then can watch whatever channels are in that basic package for free, for as many hours as they like. And this makes sense, as the marginal cost of providing those extra channels and viewing time to the customer is zero (it doesn\u2019t cost my cable provider anything if I happen to watch Jewelry Channel at 3:00 a.m. when I can\u2019t sleep). I don\u2019t watch every channel, just as most people who go to Disneyland don\u2019t ride every ride, and I don\u2019t read every article in my New Yorker<\/em> subscription. We pay the admission fee because of the channels, or rides, we do like, and find it worth it. We can\u2019t ask Disneyland for a discount if we say we are not interested in It\u2019s a Small World, and we don\u2019t get a discount from our cable provider if we don\u2019t want to watch Fox News.<\/p>\n

And now let\u2019s go back to the museum, which also has a two-part pricing problem. It can charge an admission fee and offer free \u201crides\u201d, which in this case are all the different rooms and exhibits, for as many hours as you like, or it could lower its basic admission price (perhaps all the way to zero) and charge per room viewed, or per hour of viewing. But for almost all museums, the marginal cost of allowing the customer to stay for another hour is zero \u2013 I don\u2019t impose costs on the Frick <\/a>by staying for three hours instead of two. And so it doesn\u2019t make sense to charge me extra for that third hour. (Note there might be “special” exhibits where we depart from this rule, in the same way we pay extra if we want HBO with our cable – we’ll talk about these exceptions in a later post).<\/p>\n

The one exception that makes sense is where the museum is so crowded that my staying an extra hour really does impose a cost \u2013 I am making the museum more crowded for all the other visitors. And this is where the analogy of a car parking lot makes sense \u2013 the car is taking up scarce and valuable space. But the museums that face that issue are few. For the vast majority, giving visitors as much time as they want under a single admission fee, even if they don\u2019t use it, makes sense the same way big bundles of cable channels make sense.<\/p>\n

~<\/p>\n

This is For What It’s Worth, a blog about pricing the arts. Here we will talk about setting prices for museums, performances, festivals, and all the other things arts organizations sell once the visitor is in the door. We’ll talk about hot topics like dynamic pricing, but also perennial issues such as single performances versus subscriptions and memberships, student and senior discounts, scaling the house, bundling, two-part pricing, and pricing to further the mission of nonprofit arts organizations. We\u2019ll see what we can learn from others, whether in the hospitality industry, sports, travel, groceries, fairgrounds, anything that might provide some insights.<\/p>\n

I\u2019m happy to hear from all readers with comments, observations, and, especially, topics you would like to see covered. Thanks for reading!<\/p>\n","protected":false},"excerpt":{"rendered":"

Should museums charge visitors according to the length of their visit? \u00a0In 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 […]<\/p>\n","protected":false},"author":3,"featured_media":0,"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":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[16,18,15,17],"class_list":{"0":"post-363","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-uncategorized","7":"tag-bundling","8":"tag-cable-television","9":"tag-museums","10":"tag-two-part-pricing","11":"entry","12":"has-post-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-5R","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":377,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/02\/targets-the-cost-of-bread-and-nonprofit-arts-pricing\/","url_meta":{"origin":363,"position":0},"title":"Targets, The Cost of Bread, and Nonprofit Arts Pricing","author":"Michael Rushton","date":"February 25, 2013","format":false,"excerpt":"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\u2019t the nonprofit arts, unlike cable companies, have a mission to be accessible to all patrons,\u2026","rel":"","context":"With 5 comments","block_context":{"text":"With 5 comments","link":"https:\/\/www.artsjournal.com\/worth\/2013\/02\/targets-the-cost-of-bread-and-nonprofit-arts-pricing\/#comments"},"img":{"alt_text":"Focus on the target","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/02\/archersDM1304_468x364-300x233.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":848,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/06\/two-part-pricing-in-the-cafe\/","url_meta":{"origin":363,"position":1},"title":"Two-part pricing in the cafe","author":"Michael Rushton","date":"June 4, 2013","format":false,"excerpt":"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 \u20ac2.00 (about $2.59), which\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"the meter is running...","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/06\/old-cafe-image-300x199.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2926,"url":"https:\/\/www.artsjournal.com\/worth\/2023\/08\/museums-are-not-expensive-2\/","url_meta":{"origin":363,"position":2},"title":"Museums are not expensive","author":"Michael Rushton","date":"August 2, 2023","format":false,"excerpt":"New Yorkers who are interested in seeing the film Barbie at the local multiplex will pay $25.49 per ticket. If, on the same weekend, they wish to also see Oppenheimer, as I read, in about one hundred and forty-seven news reports, people were doing, then we are up to $51.\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\/2023\/08\/image.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/08\/image.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/08\/image.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/08\/image.png?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":924,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/06\/the-great-small-plate-debate\/","url_meta":{"origin":363,"position":3},"title":"The great small plate debate","author":"Michael Rushton","date":"June 30, 2013","format":false,"excerpt":"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\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"is that all you get?","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/06\/tapas-224x300.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2191,"url":"https:\/\/www.artsjournal.com\/worth\/2017\/04\/on-charging-admission-at-the-met\/","url_meta":{"origin":363,"position":4},"title":"On charging admission at the Met","author":"Michael Rushton","date":"April 28, 2017","format":false,"excerpt":"The New York Times reported that the Metropolitan Museum of Art is looking at options to make its \"suggested\" entry fee into something a little stronger than a hint, at least for people who live outside the city or state. A few years ago Derek Thompson reported that about six\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"i should pay","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2017\/04\/met.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2017\/04\/met.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2017\/04\/met.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":1284,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/05\/we-switched-round-and-round-til-half-past-dawn\/","url_meta":{"origin":363,"position":5},"title":"We switched ’round and ’round ’til half-past dawn","author":"Michael Rushton","date":"May 6, 2014","format":false,"excerpt":"A new report from the Nielson company: According to Nielsen\u2019s forthcoming Advertising & Audiences Report, the average U.S. TV home now receives 189 TV channels\u2014a record high and significant jump since 2008, when the average home received 129 channels. Despite this increase, however, consumers have consistently tuned in to an\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"\"Zero marginal cost, you say?\"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/02\/Family_watching_television_1958.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/02\/Family_watching_television_1958.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/02\/Family_watching_television_1958.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/363","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=363"}],"version-history":[{"count":0,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/363\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media?parent=363"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/categories?post=363"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/tags?post=363"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}