Big national drop in theater subscriptions
Chris Jones, Chicago Tribune, 11/28/11
For those in the theater industry who long have followed the late Danny Newman's "Subscribe Now!" mantra to build loyal subscribers rather than fickle single ticket buyers, the latest research from the Theatre Communications Group should make sobering reading. At least where non-profit American theaters are concerned, it is not working so well anymore. According to Theatre Facts 2010, the annual research snapshot released by the TCG lobbying and support organization, subscription income is dropping at American theaters at an alarming rate. Between 2006 and 2010, the report (released Monday) says, national subscription income dropped by an eye-catching 15.1%. Some 14% fewer subscripion tickets were sold and the closely watched subscriber base dropped by 15%. Overall attendance also fell, slightly. The decline was 3.6%, although the study notes that attendance went up for workshops, skeletal productions and the like. Theaters, the study notes, have cut costs by an average of 2.6%, no doubt in response to these numbers and also to the decline in philanthropic giving (contributed income fell during the period of the study by 5%). Interestingly, single-ticket income rose modestly during each of the years in the study. And between 2006 and 2010, the number of single-ticket buyers rose by 3%. Most theaters report a positive change in unrestricted net assets, growth that the study attributes to the rising price of a single ticket.
Excerpt: TCG's Theatre Facts 2010 report, Contending with the New Normal
Theatre Communications Group website, 11/29/11
We see that increases in ticket profits helped to propel positive earned income, although data also indicates that total attendance was down, as was the number of performances offered. Higher ticket prices -- or at least audiences selecting higher-priced tickets -- at the single-ticket level explains that discrepancy. Subscription income dropped again, as it has for the past three years, but single-ticket income regained the footing it lost in '09 to end the season slightly higher than in '08, for a five-year peak. Flexible subscriptions continued to increase their share of total subscribership (smaller packages accounted for 8% of subscribers in '06 and 13% in '10), though [some] theatre leaders confessed misgivings about flex futures. Anecdotally, many theatres say it's a bit like comparing apples to oranges to look at attendance numbers and income over the past few years. Resident productions played to 72% paid capacity (as opposed to 71% in '09 and 73% in the previous three years). But the number of performances dropped by more than 1,000 from '09, the severest descent of the past five years. Ticket prices for subscribers and single ticket buyers both rose above inflation over the past five years, at 7% and 5% respectively. "Our average ticket price went up," confirms Adirondack's Fleischer, "but not because we increased prices. People were buying the more expensive tickets. We've found that price point is not the issue [in declining audiences] -- it's time and the density of activities in the area." Other theatres zeroed in on the willingness of some ticket-buyers to pay top dollar by instating dynamic pricing.
Commentary: Declining subscriptions = higher costs, lower donations?
Greg Sandow on his ArtsJournal blog, 4/29/11
In the past, orchestras sold most of their tickets to subscribers. But in the past decade, subscription sales have fallen. There's a trend throughout our culture toward people not wanting to close off their options by buying tickets too far in advance. There are so many things you might want to do. You might not hear about some of them till close to the date they happen. So why commit yourself to anything? That's trouble. But there's more. The subscription audience tends to be older than single-ticket buyers. And as they age, they stop going, simply because they're old. Last summer, on a plane, I met a telemarketer for a large American orchestra, not one that's usually thought to be in any trouble. He told me that, lately, when he's made calls to subscribers, asking them to renew, he's starting to hear that they're just too old to continue. Much as they might like to. From what I hear, it's something that's starting to happen everywhere. Which shouldn't be a surprise. The core audience is growing older, and isn't being replaced. To sell tickets to younger people, you have to lower your ticket prices. (This seems to be the gospel, now, among orchestra marketers.) But in your financial planning you've assumed you'll have the income that comes from selling tickets at the existing high prices. If you lower ticket prices, your budget starts to implode. Worse still, you have to figure out how to reach the younger audience. So now your marketing costs rise still higher. Another cost squeeze. And it gets even worse than that. You also need people to donate money to the orchestra. Older people donate more than younger ones do, simply because they have more money. So by attracting a younger audience, you may well hurt your donated income, too.
Decline in ratio of orchestra subscriptions to single tix began 20 years ago
Excerpt from report to Andrew W. Mellon Foundation by Robert J. Flanagan, March 2008
A decline in the ratio of subscription to single tickets accompanied [a] drop in attendance per concert. Averaged over 1991 to 1997 (the only years for which these data are available), the median symphony orchestra sold four times as many subscription tickets as single tickets for both regular season and pops concerts. This average masks a significant trend decline in the ratio of subscription to single tickets, however. In 1991 the median orchestra sold five subscription tickets for every single ticket for both regular and pops concerts. By 1997 it sold only three subscription tickets for every single ticket sold for regular concerts. For pops concerts, the ratio declined to 3.5 subscription tickets per single ticket. Not only has attendance per concert dropped, but the loss is particularly large among the subscription patrons who are likely to have a long-term commitment to symphony orchestras. If it is more costly to sell single than subscription tickets, this development will add to the cost pressures on orchestras.