At a recent meeting of the Opera America Board, the Opera America staff presented an important and provocative analysis. The staff had analyzed subscription and single ticket sales over a 10-year period for all Level 1 opera companies, excluding the Metropolitan Opera (i.e. Dallas, Houston, Los Angeles, Chicago, San Diego, San Francisco, Santa Fe and Seattle). There were three primary findings, all sobering:
- Total tickets sold declined from around 108,000 in 2002 to 79,000 in 2011 (the most recent data for the longitudinal survey). This represents a more than 25 percent decline over a 10-year period, some of which is driven by gradual reductions in the numbers of operas presented each year. Since each opera typically loses money on a stand-alone basis, and therefore requires supporting fund-raising, this reduction of inventory is as much a fundraising issue as a marketing one
- Over this period, the number of tickets purchased on subscription declined by over 44 percent, while single ticket purchases increased by nearly 4 percent. There is wide agreement in the field that patrons’ reluctance to purchase operas on subscription is primarily a lifestyle issue (e.g. too many competing entertainment opportunities, reluctance to make long-term commitments), not a failure in programming or subscription marketing
- In 2011, the number of single tickets purchased exceeded the number of tickets purchased on subscription for the first time. This is a dramatic finding, which will require major realignment of marketing efforts for all opera companies
Knowing how hard my fellow general directors across the country are working to lead their companies in these challenging times, these statistics reminded me of a famous moment in Lewis Caroll’s Through the Looking Glass (the sequel to the perennial classic, Alice’s Adventures in Wonderland, which has inspired several films and even a magnificent recent ballet by British composer Joby Talbot). In this episode, Alice and the Red Queen run but remain on the same spot. They exchange this famous moment of conversation:
“Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else—if you run very fast for a long time, as we’ve been doing.”
“A slow sort of country!” said the Queen. “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
This metaphor has inspired books on business strategy, a science-fiction story by Isaac Asimov, and new thinking in relativistic physics and evolutionary biology, among other areas. It also has implications for the field of opera.
Ticket sales, and in particular subscription ticket sales, are extremely important for opera companies—even in a world where more than two-thirds of the budget typically derives from annual fundraising and endowment income. Selling opera tickets on subscriptions is attractive to opera companies for at least three reasons. First, and most important, patrons buy more tickets on subscription than they do when they purchase individual performance tickets—although I have heard many patrons and donors try to persuade themselves otherwise. Second, patrons take more risks on subscriptions than on single tickets, in that they will often purchase a subscription series that includes an unfamiliar work, but will be much more cautious about purchasing single tickets to the same work. Third, it is far cheaper for opera companies to renew subscribers than it is to advertise and promote operas one at a time (although, of course, opera companies will continue to need to do both).
Tackling the problems that Opera America has identified requires opera general directors to run very fast indeed. In particular, they must adopt a multi-faceted approach to drive ticket sales, and to slow, as much as possible, the shift away from subscription purchases towards single ticket sales. (Most general directors I know acknowledge that this trend will continue, since patron lifestyle changes and growth of the Internet encourage last-minute ticket-buying decisions. Patrons are also increasingly reluctant to commit to an opera subscription that may run as long as a year or more after the day the tickets are purchased).
In earlier installments of this column, I have described several actions that opera companies are using to strengthen their audiences and increase ticket sales. These include the commissioning and producing new works, targeting new and more diverse audiences, and making the experience of attending an opera more welcoming. Fortunately, there is another pair of winged running shoes to be deployed in this race, metaphorically speaking: leveraging Internet technologies and social media to better understand patron behavior, and targeting advertising spend and promotional dollars more effectively. I will mention just four tools and approaches, all of which are becoming increasingly important:
- Micro-segmentation: Any successful consumer-oriented business, whether it is selling toothpaste or opera tickets, is becoming ever more adept at understanding consumers on a case-by-case basis. Whereas it was once sufficient to identify “broad-brush” segments (e.g. a price-sensitive segment), it is now increasingly important to understand customer behaviors, in much greater detail, at a customer-by-customer level. The exponential growth in computing power in recent years has supported this trend, as well as the Internet’s ability to track customers through every website visited, every mouse click, and every online purchase. At TDO, we have identified three segments that track single ticket buyers in different types of repertoire: these segments are “top 10” operas, other classics, and 20th/21st century works. This segmentation helps us to target single ticket promotions and offers to patrons based on their past purchasing experience (e.g. there is limited benefit in promoting an operatic classic like Aida or Turandot to patrons who have only ever purchased single tickets for more contemporary operas in the past).
- Promotional return on investment analysis: As the retailer John Wanamaker famously said, long before the advent of the computer, “Half of my advertising is wasted, I just don’t know which half.” Now, opera companies can build sophisticated financial and online tools to track how many dollars in ticket sales are generated by each type of advertising investment. In an ideal world, each ad campaign would generate a minimum of 75-80 percent of its cost in ticket revenue. (Since some customers will purchase again, an opera company can “over-invest” in the initial campaign with the expectation that it will generate some additional sales later). But if the ad costs much more than this threshold amount, it is clear that the cost-benefit is not there, and the campaign can be scaled back or cut in future seasons .
- Tracking web traffic using Google Analytics: Many consumers use Google as a search engine to find information and web addresses on the Internet. They may also click on an ad for a product or service, thereby generating advertising revenue for Google (and the possibility of a sale for the advertiser). Google also provides a free, and extraordinarily powerful, product named “Google Analytics.” Google Analytics allows the owner of a website to track total site usage, the sources of web traffic, the time spent on the site, and the purchase path used (if any), as well as many other parameters – all at the level of an individual visitor (which supports the micro-segmentation trend noted above). As TDO was promoting its Cowboys stadium simulcast this past spring, we were able to watch the impact of each promotional activity (e.g. a TV or radio ad, a public service announcement), and track the impact of these activities on website traffic and tickets requested. By adding an online survey that asked patrons where they heard about a paid performance or a simulcast, we are able to link promotional activity (some paid, and some free) with paid ticket sales or simulcast ticket requests, allowing us to track the relative impact of different promotional strategies and tools. This approach can be used to understand quite fine-grained distinctions (for example, the relative sales impact of ads on several different radio stations, the relative effectiveness of ads in the morning versus rush-hour).
- Multivariate regression analysis: Without getting into too much of the detail, companies of even moderate size are now able to complete regression analyses to test the impact of different advertising and promotional campaigns. This process essentially involves creating a large data set including all promotional and advertising inputs (e.g. Internet banner ads, radio spots, postcards promoting specific operas) and daily subscription and single ticket sales. Powerful computer programs that can now be run on personal computers then identify the relative impact of each type of activity on ticket sales. At TDO, we recently used this approach to evaluate which types of web advertising were having a positive impact on ticket sales, and saved advertising dollars by pruning the non-performing campaigns.
In an ideal world, use of these tools would allow opera companies to show increases in ticket sales, and improvements in the subscription and single ticket balance. Given the Opera America statistics quoted above, use of these types of marketing approaches is vitally important, because—as the Red Queen said—“It takes all the running you can do to keep in the same place.” I am optimistic that the economy’s continued recovery will remove some of the headwind all major American opera companies currently face, and allow opera companies to reap the benefit of the careful work that has been done in the last several years, and to show some improvement in these vital statistics.
◊ Keith Cerny is the General Director and CEO of The Dallas Opera. His column "Off the Cuff" appears every month in TheaterJones.com. Here is a list of previous columns:
- January 2012 "A Scheme of Delight"
- February 2012 "Visiting Wagner's Bayreuth"
- March 2012 "Commissioning a Successful Opera"
- April 2012 "The New Opera Audience"
- May 2012 "Rivers and Deltas of Musical Time"
- June 2012 "Operatic Blockbusters"
- July 2012 "Maximizing Dallas Opera's Community Footprint"
- August 2012 "The Santa Fe Festival Model"
- September 2012 "Postcard from Glyndebourne"
- October 2012 "Verdi's Egypt: Cracking the Code"
- November 2012 "It's Not Just Contemporary Anymore"
- December 2012 "Singing the Blues"
- January 2013 "Puccini's Golden Dozen"
- February 2013 "Opera and Popular Culture"
- March 2013 "A Dangerous Experiment"
- April 2013 "The Case of the Jealous Mezzo"