Keith Cerny, General Director and CEO of The Dallas Opera
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2B or Not 2B

In his latest Off the Cuff, The Dallas Opera's Keith Cerny has more thoughts on the subscriber/single ticket buyer puzzle.

published Sunday, October 6, 2013

Dallas — As I noted in an earlier “Off the Cuff,” 2011 was a difficult milestone year for American Level 1 Opera Companies in that, nationwide, single tickets exceeded tickets sold on subscription for the first time since these records began to be kept. Programming an artistically strong season that balances all of the required elements—composers, compositional eras, sung language, compositional and production styles, and the ability to showcase unique vocal talenthas always been a fascinating and demanding task. It becomes even more challenging in this unsettling new world.

Historically, subscription revenues, especially for the full season, have been an extremely important source of cash flow for opera companies. This revenue base gave General Directors a degree of freedom in programming, since he or she could rely on a solid base of funding from a group of patrons who would readily accept a range of operasfrom classics to more contemporary, including lesser-known works and world premieres. The costs of marketing to this group were also quite low relative to single-ticket buyers, and long-term subscribers tended to be very loyal. In my past work at San Francisco Opera, we found that once a subscriber had made that commitment of support for four consecutive years, he or she tended to resubscribe until they were too old or infirm to travel from their home to the opera house which provided an extremely stable and reasonably predictable source of revenue for many years. This group of long-term subscribers, in particular, was willing to renew each year with the expectation that the General Director would deliver an interesting and artistically worthwhile season, while the rest of the company made sure that the overall experience, from start to finish, was everything the patron expected—and then some!

The historical dynamics for single-ticket purchasers were very different, in that even in this subscriber-dominated environment, single ticket sales tended to favor the operatic classics. There is a famous study at San Francisco Opera dating from nearly 20 years ago that showed that the majority of single ticket patrons made their purchasing decision based on just two factors: composer and title. All other factors, including the featured conductor, quality of singers, and production style had a much smaller influence. A set of positive reviews of the opening night of a production could also provide a positive “kick” to single ticket sales; neutral or negative reviews tended to have a smaller effect.

Over the last 20 years, single ticket purchasing preferences have been driven even more strongly by title. Evergreen classic operas, such as Carmen, La Traviata, La bohème, Don Giovanni and The Barber of Seville have retained their popularity, and are staples of the operatic repertoire, not only because they are among the best operas ever composed, but because they are also reliable sources of revenue. This list of classics tends to be self-reinforcing, in that the casual opera-goer is attracted to works that theyor their circle of friendshave heard of before. This patron behavior encourages opera companies to program these same operas regularly, which leads to even more evangelists for the work the next time it is programmed.

Putting these two trends togetherthe continuing shift from tickets sold on subscription to single tickets, and the increased power of the opera title as a driver of single ticket sales what does this tell us about the near future of the performing arts? TDO’s return to four operas in the 2013-2014 season and the pattern of sales, to date, provide several important insights into how to assemble the puzzle pieces to create your best chance for a successful season.

TDO’s programming strategy is to present a diverse mix of operas and production styles, performed at the highest possible artistic standards, and featuring top quality casts. The 2013-2014 season is built around four operas: two A-List classics (Bizet’s Carmen and Rossini’s The Barber of Seville); one rarely performed gemKorngold’s Die tote Stadt (“The Dead City”) in its long overdue North Texas premiere; and one bold and genre-stretching 21st century opera Tod Machover’s Death and the Powers. Observing and analyzing sales patterns, and listening to patron feedback, have already given us valuable insights into marketing this season, as well as planning and marketing for the future.

From a subscription point of view, TDO was fortunate to have an already strong base of patrons willing to purchase the full season of four productions. TDO offered a three-performance-series as well, but that attracted less interestlikely because any combination of three operas would include two of one type (classics or more exotic) and one of the other type. Patrons tended instead to purchase pairs of operas as mini-subscriptions. These were predominantly the Bizet and Rossini offerings, although we had a few adventurous buyers who purchased the Korngold and the Machover works as a pair. For ease of reference, I will refer to these segments as “traditionalists” and “experimentalists”but rest assured we love them both equally!

Drilling down on the purchasing behavior of these “pair buyers,” there are some important attitudinal factors worth noting. Opera attracts very passionate consumers, many of whom are incredibly detail-oriented. Audiences will quickly note even relatively small discrepancies (e.g. if the production sets and costumes are even slightly mismatched, from the perspective of the time period represented). Having just reviewed a fresh batch of patron survey data, we have found that some patrons in the “experimentalist” segmentespecially among lapsed subscribersopenly question why TDO would perform any of the top 15 most popular operas. A few even go so far as to suggest that this shows a lack of imagination on the part of the company. Conversely, some patrons in the “traditionalist” segment question why the Dallas Opera is presenting lesser-well known works at all when it is clear that ticket sales are stronger for the classics. (You can see some of this debate playing out vividly in online comments about the tragic demise of the New York City Opera). Actually, in my experience, the majority of Level 1 Opera Companies strive to present an innovative and balanced season as noted above, where popular classics are performed side-by-side with more exotic works. None of them are presenting Aida or other top 15 operas because they “lack imagination.”

Given this new ticket sales dynamic, I see American opera companies adopting two important responses:

The first change is that opera companies are being even more meticulous about fine-tuning the number of performances they present of a given opera. At The Dallas Opera, we now present between four and six performances of each opera, depending on the expected level of demand for subscriptions and single tickets; when I worked at San Francisco Opera, the range was between six and 15 performances. Companies are able to make the economics work by programming more performances of the most well-known operas (e.g. Carmen and Barber) and fewer performances of the less familiar works (e.g. Die tote Stadt and Death and the Powers). This is harder than it sounds, as very careful financial models must be constructed to evaluate the revenue potential of additional performances versus the additional variable costs (i.e. the costs of paying singers for an extra performance or two). Making the analysis even more complex, some costs may be relatively fixed (e.g. if theater rent is charged by the week, not by the day). This analysis has nothing to do with the artistic quality of the works being presented, but is only a reflection of the relative level of patron demand.

Photo: The Dallas Opera
The Dallas Opera's opening production of the 2013-14 season is Bizet's Carmen.

Using this analytical process allows opera companies to offer a full season to subscribers, but also to avoid having excess inventory of single tickets for the lesser-known works, thereby maximizing revenue and capacity utilization. Full or nearly full houses in turn help to persuade potential subscription buyers who are “on the fence.” If they believe that subscribing will secure them better seats, or avoid the risk that the production will sell out completely before they’ve acquired single tickets, they are more likely to “bite the bullet” and subscribe. One constraint of this method is that there must be enough performances to cover base subscriber demandfour performances in the case of TDO; six, historically, in the case of San Francisco Opera—but in general, opera companies tend to program too many performances rather than too few.

The second change has to do with how the various subscription series are structured. As noted above, all companies offer a full slate of operas. But they also offer shorter series as well. Structuring these smaller series around popular classics, with the possible addition of one or more exotic works, is a helpful way to add additional revenue. It may be that opera companies can learn a thing or two from touring Broadway shows, where the only reliable way to secure tickets to the Tony-award winning hit of the year (think Book of Mormon) is to purchase the presenter’s series subscription. However, with the decline of “name power” opera singers (where’s Maria Callas when you need her?), this is a difficult strategy for opera companies to pursue; and matching supply and demand by regulating the number of performances is still, by far, the most powerful lever in the General Director’s toolkit.

In conclusion, while running an American opera company has never been an easy task, the shift away from subscription revenue to single ticket revenue is probably one of the greatest challenges facing the field in the 21st century. There’s an omnipresent temptation to resist this trend by shifting season programming towards more popular operassince they deliver stronger single ticket salesbut following the path of least resistance too far leads to stale programming, and gives the company limited new ideas to market.

I think that virtually all of my colleagues believe that the balance of subscriptions and single tickets will continue to shift towards single tickets, although we are working as hard as we can to make subscribing the more attractive option. As single tickets buyers become ever more important, choosing the right number of performances of each opera will become increasingly imperative, and each opera company will need to ensure that it has the proper financial and analytical resources to complete and apply the results of these detailed analyses, carefully and correctly.

Our professional lives may depend upon it.

The Dallas Opera is proud to present Georges Bizet’s Carmen, starring French mezzo-soprano Clémentine Margaine in her American debut, acclaimed tenors Brandon Jovanovich and Bruno Ribeiro sharing the role of Don José, heart-wrenching soprano Mary Dunleavy as Micaëla and dashing baritone Dwayne Croft as Escamillo the Toreador. Carmen will be presented Oct. 25 -Nov. 10 in the Margot and Bill Winspear Opera House. Even if you are already planning to attend one of these outstanding performances, you are also invited and encouraged to attend the Dallas Opera’s one-night-only FREE simulcast of Carmen in Klyde Warren Park on Friday, Oct. 25 beginning at 6:30 p.m. The evening will include screenings of the Tom and Jerry cartoon, “Carmen Get It!” and the Baby Peggy silent classic “Carmen Junior,” as well as a Carmen Costume Contest and Toreador Song sing-a-long.

Bring a blanket and picnic basket or purchase food and drink onsite, but be there! Click here for the free study guide, reminder, and additional information.

◊ Keith Cerny is the General Director and CEO of The Dallas Opera. His column OFF THE CUFF appears every month in Below this photo is a list of previous columns:

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2B or Not 2B
In his latest Off the Cuff, The Dallas Opera's Keith Cerny has more thoughts on the subscriber/single ticket buyer puzzle.
by Keith Cerny

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