It’s not news that the global covid-19 pandemic has severely impacted cultural institutions around the world.
Here in New York, what was initially announced as a 1-month closure for Broadway was recently extended to the end of 2020, forcing theaters to go dark for at least 9 months. For single ticket purchases, sales can be painfully pushed back, shows rescheduled, credits offered, and emails blasted. But at this point, organizations are now looking at a 20/21 season that has been reduced by 50-70%. So while they ponder what a physically and financially safe reopening looks like, they’re also having to turn their attentions to another key portion of their audience: subscribers.
Every company will tell you they want to cultivate a relationship with their customers. From a brand perspective, you always want to have a key base of loyal consumers, and financially these are the patrons that will consistently return to make purchases. Arts and cultural institutions use annual packages to leverage their reliable volume and quality of programming, allowing them to build relationships with their patrons which span over decades, and sometimes generations. Rather than buying several tickets to individual shows, a package is a bundle deal. The benefits vary from org to org, early access to show dates, choice of seats, and discounted prices on the shows being some of the most common, but one thing is constant: in order to reap any of these benefits, patrons commit to multiple shows over the course of the year. As a relationship tool, packages are very effective. Theatre Communications Group (TCG) in New York City produces an annual fiscal analysis for national trends in the non-profit theater sector by gathering data from all across the country. In 2018 they gathered data from 177 theaters, and found that, on average, subscribers renewed 74% of the time.
This is about more than brand loyalty though: these packages represent a source of consistent income for theaters. Beyond the face value of individual tickets purchased by subscribers, which according to TCG’s research tally up to an average of $835k a year (with the highest earning tier of theaters surveyed pulling in an average of 2.5 million dollars), subscribers are much more likely to convert their attendance into other kinds of support for the organization. These patons can be marketed to with low risk (of annoyance) and high reward (in literal dollars). Thus, the value of subscriber relationships goes well beyond their sheer presence in the venue, making them one of the most consistently considered portions of the audience. At a time when uncertainty is the name of the game, a set of dependable patrons might seem like the perfect audience slice to reach out to right now.
However, since the rewards for packages typically revolve around early access, and require a multi-show commitment, subscription purchases and renewals usually receive a big push very early in the season sales cycle, putting them in a particularly vulnerable position at the start of the covid-19 pandemic. Furthermore, the extension of venue closures have not only shifted back sales dates, but also the seasons themselves leaving patrons with fewer shows to choose from, and fewer to commit to. This is forcing everyone to figure out how to salvage the potential income while still providing a valuable, and fair, experience to patrons. Thus far, we’re seeing three different answers to this question emerge.
One straightforward approach is to roll with the punches and create mixed packages between this season (Season A), and next season (Season B). This works particularly well for orgs with consistent types of content every year. For example if an organization has a package of 5 Jazz concerts in Season A, but 3 of them are cancelled due to the pandemic, you just take 3 shows from Season B to replace them. Behind the scenes, this strategy does require a lot of hands-on adjustments if shows continue to be cancelled, but with the benefit of preserving the structure of the original package. Patrons also have a transparent view into how the value of their package is being preserved, however they are still tied to a specific show date with no knowledge of what the situation will be at that point.
Another solution which has started to arise is the idea of a voucher system. Rather than trying to reschedule after a show in a package is cancelled, patrons are given vouchers which can be redeemed for a ticket to a future performance. For organizations, this option puts a lot of the workload at the front end, as it requires detailed business consideration: do vouchers expire? If so, how far in the future? Do the vouchers have a dollar value, or can they be exchanged 1:1 for a production? What happens if prices change between now and reopening, or if a user wants a ticket of a different value? (You get the gist). All that being said, once those business rules are set, it has the potential to put the other choices in the hands of the patron. Consequently, for patrons this option takes off some of the pressure: they don’t need to commit to another uncertain date in the future, instead they can be assured they are receiving the value of their package at a time that they feel comfortable.
Pay It Forward
A third option is to push the guesswork entirely to the future and allow users to purchase a set bundle of shows as normal, but with no mention of dates or seats. Instead of setting a calendar for the year, patrons are committing to content: 5 shows, rather than 5 dates. Some organizations have had this in place for early renewals for years, and find it to be an easy way to service patrons who are loyal to the organization through thick and thin. Ultimately though, this allows both parties to make more informed decisions about their theatergoing habits closer to the show itself, rather than 3 months ahead of an unknown future. That being said, this solution requires a lot of upfront discussions within the organization, and to the patron, about what might happen if patrons cannot attend the dates they are assigned either due to conflicts or continued safety concerns.
“All the world’s a stage,As You Like It - William Shakespeare
And all the men and women merely players”
Anyone who’s remotely involved in the arts & culture sector will not be surprised that there is no one-size-fits-all solution. Some organizations will enjoy the straight-forwardness of mixing packages, others will want to allow for uncertainty and opt for the voucher system or the pay-it-forward option, still others will come up with an infinite number of alternate approaches to this issue. And of course, these solutions are all dependent on an optimistic future which is still a huge question mark: some areas are opening up, others are extending their closures, previously bankable organizations are filing for bankruptcy, and for every positive trend in cases there’s a spike somewhere else. In the game of whack-a-mole that is covid-19, the path towards reopening, and specifically a positive subscriber experience, is a tightrope: business rules will need to be clearly defined, messaging carefully considered, and customer service well briefed on the new practices. No matter what solution organizations opt for, it will need to be tailor fitted so that the patron relationships which will keep theater alive beyond this pandemic can be cultivated. Otherwise they run the risk of patrons feeling milked for money, and lemming marched into the theater.
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