Do Arts Organizations Still Need Subscription Models?

NPO-Subscriptions.png

Building new, diverse audiences is one of the most important challenges today’s nonprofit arts organizations face. With technology transforming the way audiences consume entertainment, a growing competitive landscape, and psychological barriers to the arts world lingering for decades, it is more difficult than ever for these organizations to find new audiences at the rate in which they need to replace audiences that no longer exist.

One of the primary sources of ticket sales that has been troublesome for a majority of arts organizations to rebuild has been the subscription model, a “uniquely American phenomenon” where loyal patrons purchase tickets to multiple performances in one transaction. The average number of subscribers at arts organizations hit a five year low in 2016, and has decreased 10.6% from 2012. Subscriptions had high value to both theaters and patrons when first introduced, so why aren’t they working in today’s market? If they’re not working, what can nonprofit arts organizations try instead to build their audiences?

The History of Subscriptions
vintage-ticket-line-300x202.png

Sir, try turning up the brightness on your screen, the tickets aren't scanning. Subscription sales models were created in the late 1800’s primarily by symphony orchestras, during a time when tickets could not be purchased online or even over the phone. Patrons had to go the box office in person to purchase tickets for performances. By purchasing a subscription at the box office, patrons had the convenience of making one trip to reserve tickets to their favorite shows all throughout the season. If there was no access to phones or internet during this time period, you better bet going to the theater was the patron’s primary source of entertainment. This meant that patrons went to arts venues multiple times a year for both cultural and social fulfilment, and relied on subscriptions as a way to secure those experiences. This was a win-win for both the theater and the patron. While patrons were guaranteed the perfect seats to multiple shows in one trip, theaters could take advantage of getting advance cash in the door during their off-season through subscription sales.

Why Subscriptions Aren’t Working

Overtime, the benefits of subscription models for theaters and patrons became incredibly unbalanced. Patrons experienced an increase in affordable entertainment options and easier ways to purchase tickets using new technologies, decreasing their need and want for a subscription package. subscription-model-300x282.png

 Choose from one of 60 options. It's easy! On the other hand, as production costs increased for theaters, these organizations relied more and more on advance cash from tickets purchased through subscriptions. For many organizations, the pricing and scheduling structure of these packages became more complicated as a way to maximize and push this critical subscription revenue, also making these tickets less appealing to some audiences. Today’s cultural consumers long for new experiences -- not going back to the same venue to see the same show time and time again. Although subscriptions still account for an average of 37% of tickets sold for arts organizations, with that number quickly decreasing, over-structured sales strategies based on what was convenient to patrons in the 19th century no longer make sense for engaging new audiences.

What’s Working Instead

Arts organizations that are succeeding today in creating audiences using new types of subscription models are not focused on subscriptions as a reservation tool -- they use subscriptions primarily as a marketing tool.Steppenwolf-subscription-model-173x300.png

For some organizations, new marketing strategies like making hit shows only available to subscribers or offering steep discounts through third party retailers have helped. For others, marketing subscriptions to more targeted audiences has successfully initiated growth beyond only ticket sales. The ideal example of this type of strategy is Steppenwolf Theatre’s RED Card Membership -- a new sales model created by the company geared towards increasing young audiences. As an affordable and easy “flex-pass” with exclusive perks for patrons ages 21-29, this membership substituted the convoluted scheduling and pricing of traditional subscription packages, while also appealing to a highly desired, targeted consumer base. Within its first year, Steppenwolf sold over 900 RED memberships. Even with lower individual ticket prices, the theater made 66% more revenue from this group of patrons after the first year of creating this membership, and Millennial attendance went up 6.1% from 2007 overall. Using this targeted marketing strategy, the organization not only increased a portion of their ticket revenues, but also fulfilled their mission of engaging in a multi-generational conversation.

***

It may be challenging for nonprofit arts organizations to get new customers in the door for the first time, but it is even more challenging to get those new customers to come back time and time again. By using subscriptions to market performances to the right patron at the right time, arts organizations have proved that revenues can improve without over-structured, complicated pricing schemes. Most importantly, they have proved that they can introduce audiences to their organizations with the potential of them becoming future loyal patrons to sustain the organization long-term. Arts organizations may need traditional subscription packages to get immediate cash while they still can, but a long-term ticketing strategy to build and sustain new audiences can be a much more valuable tool to start taking advantage of now.


Sources Cohen, Arthur, and Maggie Hartnick. Culture Track 2017. LaPlaca Cohen, 2017, Culture Track 2017, 2017study.culturetrack.com. Kaiser, Michael M. Curtains?: The Future of the Arts in America. Brandeis University Press, 2015. Nelson, Erika and Jamie Alexander. Bringing More Young People to the Theater. Steppenwolf Theatre Company, 2014. Newman, Danny. Subscribe Now! Building Arts Audiences through Dynamic Subscription Promotion. Theatre Communications Group, Inc., 1983. Voss / National Center for Arts Research, Zannie Giraud, et al. Theatre Facts 2016. Theatre Communications Group, Inc., 2017, Theatre Facts 2016.  


bradlie-96x96.jpgBradlie Yanniello is a marketing and sales analyst committed to growing audiences and revenue for the arts.

Connect with Bradlie

Follow Bradlie