Saturday, June 24, 2017

Don't subscribe now! (part 1)

In two previous posts, I tried to summarize the advice in Danny Newman’s excellent and seminal arts marketing book Subscribe Now!  I’m a big believer in his approach because I’ve personally seen it work incredibly well at the Altarena Playhouse, which grew its subscriber base from about 300 (in 2005, the low to which it had shrunk from about 600 several years earlier) to over 1000 by 2012, with most of that growth in the first few seasons after we started taking subscription marketing seriously.

But Newman’s book was originally written in the 1970s and updated in the 1980s, and there is sentiment among other arts marketing specialists that subscriptions are increasingly a poor fit for modern audiences. This argument is made in the latter chapters of Joanne Scheff Bernstein’s book Arts Marketing Insights. The major points of the argument are these, most of them supported by one or more studies (though whether the theaters and audiences studied were representative of your theater and audience may vary), accompanied by my own reactions:

  1. Up-front subscription is a cost to the patron with limited benefits. In particular, most subscribers state that the guarantee of good seats is the most important reason they continue to renew, while the effective discount on the ticket price is among the least important reasons.
    My reaction: Depending on your price point and the audience you are trying to reach, this may or may not be a consideration. In the Bay Area, where I live, the cost of a subscription to a solid community theater is about the cost of two dinners out. And one decision made at Altarena was that subscribers would also be allowed to cancel and change both their subscriber reservations and their additional single-ticket purchases with no penalty (up to a grace period of, say, 24 hours before curtain), so there are some other benefits.
  2. Younger audiences in particular are accustomed to planning at the last minute and instant gratification, and are unlikely to make plans in advance. The advance commitment required by subscriptions doesn’t fit this lifestyle.
    My reaction: Your subscription doesn’t necessarily have to ask patrons to set all their show dates in advance (though obviously you can’t guarantee specific seats unless they do this). Altarena’s subscribers can choose to either specify dates at the time they subscribe or reserve for each production later on. The Audience1st ticketing system they use makes it easy to generate a list of all subscribers who have not yet reserved for a particular production, so they can get a friendly email or phone call reminder to do so.
  3. Related to the previous point: younger audiences are in fact receptive to going to live theater, as long as you offer a product that fits their lifestyle. Part of that lifestyle is last-minute decisions about what to do and spontaneous social networking with friends to form up groups for those activities, so try to offer a product that allows for that.
    My reaction: This year (2017) the blockbuster musical Hamilton came to San Francisco on its national tour. The local production company, SHN, knew it would sell out, so they promised their subscribers first dibs on tickets. I know a lot of people who subscribed just to see that show. I’m sure that at no time did SHN leadership think “You know, we should make sure not to sell so many subscriptions that Hamilton fills up, since we need to leave some seats available for single-ticket buyers who may want to see this show but don’t represent a likely source of future business for us.” (I’m sure there were such people, and they probably paid for aftermarket tickets.) If there’s an audience whose lifestyle demands great seats despite last-minute decisions to attend and unpredictable group sizes, my answer is “Sorry, no.” I’m not willing to hold back premium seats for a group of people who may or may not materialize and who, if they do come, arguably have no intention of becoming a steadier customer. 
  4. The downside of a loyal subscriber audience is that they come to expect a certain kind of programming, and may go away if you change the mix. That is, your programming becomes beholden to keeping your subscribers happy.
    My reaction: If you are following Newman’s advice and using your subscription as a way to develop your audience as well as attract them—and this includes constantly refreshing your audience with new blood—this shouldn’t be a problem. Yes, Altarena started introducing shows into its subscriptions that weren’t favorites among some older subscribers. But they had attracted enough younger subscribers to more than make up the difference, and producing those shows broadened the theater’s appeal by putting it on the map for even more younger patrons, some of whom eventually became subscribers too.
  5. Given that most people who aren’t hardcore theatergoers don’t attend live theater that much to begin with, they may be reluctant to allocate all those nights to a single theater.
    My reaction: If the theater is convenient to where you live, makes you feel at home because you know the staff and repeatedly bump into other patrons there and develop a friendship with them, and you enjoy their programming and production values, why wouldn’t you go there several nights a year, especially if they go out of their way to treat subscribers particularly well and give them extra perks? Also, many community theaters only produce four to six shows a year anyway, and attending one live performance every two to three months doesn’t seem like a huge commitment to me.
Bernstein suggests that while theaters shouldn’t abandon the subscription model, they should be prepared to rely more on nonsubscribers to fill seats. She suggests strategies for “mini” or “flex” subscriptions that don’t represent as much of a commitment as a full series, or that allow patrons to “create their own” series (although I’ve argued against this for community theaters that do just a few productions per year and are actively trying to develop their audiences). She also suggests the concept of “membership,” that is, paying an annual fee that doesn’t by itself translate to seats but gives you the right to buy tickets at a discount during the season. This seems strange since a few pages earlier she says that the discount price is an unimportant reason subscribers say they renew, but she argues that “membership” gives the patron a “sense of belonging” that may translate to greater loyalty or affinity or goodwill for the theater. (Though having read Putnam’s brilliant but bleak Bowling Alone, I’m skeptical.)

I’m not ready to make that jump. Although I haven’t run the numbers myself for theaters I’ve been directly involved with, I’m confident that the marketing cost (dollars spent per seat filled) is significantly higher for single ticket sales than subscribers. And that’s not even counting the fact that when subscribers bring their friends, even if their friends never upsell, you got free word-of-mouth advertising that turned into a sale. The dollar amounts we’re talking about for buying subscriptions are not cripplingly high as they are for, e.g., opera or symphony subscriptions, so for most people in our target audience, it’s not as if we are asking them to make a major financial decision.

I read both Bernstein’s and Newman’s books, plus the weighty tome Standing Room Only, when I first joined Altarena’s board and we set the goal of making our patron base more robust. I came to the conclusion that we should double down on Newman’s approach and focus on subscriptions. In the next post I describe how it went.

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