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Archive for May, 2012

DYNAMIC PRICING:  REVENUE MANAGEMENT STRATEGIES

On Thursday 5/17, the final day of the conference, two sessions were devoted to Dynamic Pricing. (For my previous post about Dynamic Pricing, please click here.)

A lot of information was disseminated by the various panelists on how they have navigated within the Dynamic Pricing model. Below is a list of bullet points that give an overview of the information that was imparted at these sessions:

  • Build different price levels horizontally rather than vertically to fill the orchestra and fronts of other sections to create an electric feeling. People behind these locations will see the energy in front of them, rather than seeing empty seats.
  • Look at pricing by performance, not just overall sales.
  • When you have distressed inventory, align with organizations that can sell these seats at full price to a “valued buyer.” There are companies with a target constituency that may have an easier time getting their consumers to buy the same tickets that you may have trouble moving.
  • Hold back seats to create demand if you know you will sell quickly.
  • Be conscious of the price/value equation. Create a sense of scarcity to spark interest and urgency.
  • Continually monitor and manage rezoning, revenue management and forecasting.
  • When implementing Dynamic Pricing, consider your messaging since prices will fluctuate, i.e. “Prices starting from…” or “Today’s price is…” or “Act now! Prices go up on Friday!” or “Prices are not guaranteed,” etc., so people know the price will change.
  • QUESTION: How can an organization keep up with the messaging, though, if you have limited resources within your advertising spend, and you also don’t want to upset potential customers by over communicating?
  1. ANSWER: Create a seat map that allows people to scroll over seats to see the different prices. “Pick your seats online.” (See Ahmanson Theatre)
  • Price aisle seats higher. People will be willing to buy adjacent seats at the same price when they buy the aisle seat.
  • Set a deadline for subscriber renewal. “Act by x date, otherwise the package goes up to y.”
  • Consider using the word “Adjusting” rather than “Discounting” when messaging that prices are being lowered.
  • Be careful lowering prices for people who already want to attend a performance. People who already don’t want to come probably still won’t want to…even at a lower price. “If people don’t want to come…you can’t stop them!”
  • For one-week markets, do surveys in advance to get a sense of the heat signature.
  • QUESTION: What are some successful strategies when middle-priced inventory isn’t moving?
  1. ANSWER: Raise deeply discounted mid-section seats back to full price, then reduce them and give the inventory to a company like Goldstar. The Goldstar consumer will feel like they’re getting a deal. i.e., they will be getting the full price $75 ticket for $49.
  2. ANSWER: Raise the PL3 price to the PL2 price to give the perception that it’s a hot ticket.
  3. ANSWER: If you have three price levels, for example, $45/$35/$25 and your $35 tickets are not moving, consider raising your $35 ticket to $45 at both peak and non-peak performances with the messaging, “a new block of $45 tickets on sale!”
  • Know your timeline so you are ready in advance to have higher pricing in place before your campaign hits.

Annnnd…this post concludes my coverage of some of the panels and a bit of the fun from the 2012 Spring Road Conference. I hope you found these posts useful, and that you continue to check back here at The Road 101 for more observations, updates, and articles related to the commercial theatre touring industry.

See you down The Road!

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The inimitable James Corden, star of the hilarious London import, ONE MAN, TWO GUVNORS, currently running on Broadway and nominated for seven Tony Awards, talks frankly about why touring is so frustrating for him!

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PLAYS ON THE ROAD

Historically, The Road has tended to embrace musicals more than plays, (as one conference attendee quipped, “no one walks out of a play humming the scenery”) but the ratio of plays being booked compared to musicals has been going down even more in recent years. Yet, why is that? It would seem that there would be financial advantages to presenting a good play, and just looking at Broadway alone this season, there are certainly good plays a-plenty out there.

At the Tuesday 5/15 afternoon session, “PLAYS ON THE ROAD,” a panel of presenters, producers and bookers explained why touring plays has become less desirable and more risky economically compared to the past.

Commitment Issues

Much more so than a musical, a play tends to require a “star” to attract audiences when it goes out on tour, and a tour really needs a star to commit a good year and a half to two years out when presenters are beginning to put together their seasons. Presenters don’t want to put a “TBA” in their brochures, and they certainly don’t want to still have any roles “TBA” six months out, yet that is when many stars feel comfortable making a commitment to a touring project since they are more likely to know then if any film or TV commitments would conflict.

Regional Competition

Many touring venues are in markets that have regional theaters and resident theater companies, and these nfps have a tendency to do mostly plays. As a result, Road presenters don’t want to risk doing a title that one of these local organizations would produce on their seasons.

Less Weeks To Amortize

Plays have a tendency to not book as many weeks on The Road as musicals. As a result, plays have less weeks to amortize costs. This reality makes plays much riskier to present compared to musicals, which are more likely to have multi-week engagements and longer touring schedules.

Plays On The Road And Multiple-Week Runs?

By the time word of mouth gets going, a play is often already on its way out of town since plays tend to be booked for just one week (certainly in secondary markets) so on the one hand, plays need to be presented for more than one week in order to mitigate the risk. At the same time, however, some markets, especially those with modest sub load-ins, may not be able to fill their houses enough to make a profit, or hit break-even, for more than a one-week run of a play.

Play vs. Musical Appeal

Another thing that presenters take into consideration is that musicals tend to have the same appeal across markets, whereas a play that is received well in Louisville may not be The Ahmanson’s cup of tea. Therefore, presenters and bookers often feel that finding one play property to fit the bill in enough markets is a far greater challenge compared to musicals.

Changes In The Industry

Another factor that comes into play is price, which used to be a play’s big advantage over a musical. Now, however, the price to present a play is no longer as attractive as it once was in comparison to a musical. A few years ago, a new contract called the SETA contract (Short Engagement Touring Agreement) became available. This contract has a Guarantee cap. As a result, when musicals tour under SETA, the Guarantee is not necessarily much different, and, may even be less is some cases, than the weekly Guarantee for a play.

A New Model?

While the realities expressed were certainly disheartening, one bit of light was that the panelists, as well as other conference attendees, voiced their support of plays, and their desire to still present them, and believed plays could still be booked if The Road could come up with a model that would make touring plays less risky. Here were a few ideas that were brought up in this session:

  1. Perhaps for a 30-week tour ask 3 different celebrities to commit to just 10 weeks.
  2. Tour in rep several plays under the brand “Tony-Award Winning Plays” or “Tony-Nominated Plays” (though Producer/General Manager, Stuart Thompson pointed out that this could be a challenge to get these licenses since the plays could probably earn more on a single license at one theater)
  3. Include a sit-down in New York City as part of the 30-week tour. This might also make the tour more attractive to a star.
  4. Can presenters think creatively to reduce their costs, or negotiate with local unions?

The fact of the matter is, producers, bookers and presenters all really like plays, and have seen the positive impact that plays have had on audience members, but the commercial theater touring industry is a business. It’s a business where both labor costs and risks are high, so presenters have become cautious when considering plays for their seasons, despite how they feel about plays emotionally.

Hopefully, some of the new model ideas that people offered at this session, or other ideas, will build momentum, and plays on The Road will gain the larger presence they deserve.

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Jordan Roth and Pam MacKinnon discuss an effective audience engagement initiative implemented during tech of “Clybourne Park.”

The 2012 Spring Road Conference wrapped up with a bang at the post-theatre party hosted by NICE WORK IF YOU CAN GET IT last Thursday night after an incredibly fun and informative few days at The Hudson Theatre, The Millenium Broadway Hotel, and restaurants and clubs throughout Times Square!

In my next few posts, I will highlight some of the panels and events that took place to give you a sense of where the industry mindset is currently at, and what people were talking about.

AUDIENCE ENGAGEMENT: OPENING OUR DOORS 

HOW TO GET AUDIENCE AND HOW TO KEEP THEM?

This first early morning session on Tuesday 5/15 was led by renowned New York theatre producer and Jujamcyn Theaters President, Joardan Roth where he, along with his CLYBOURNE PARK director, Pam MacKinnon discussed actual examples where they were able to engage potential audiences in unique ways.

The session started with the basic question: “Why are we inviting people in to our show in the first place?” The answer was simple and seemingly unremarkable enough: to educate and entertain. A producer wants his show to inform people in some way, while also leaving them with a feeling about that information, with the hope that audiences will then act in a positive way on that information that will potentially get the word out even more about the show. To engage people successfully, though, you need to find a way to make people feel as though they have a sense of ownership in relation to the show. In other words, you want people to feel compelled to root for the show, and you want them to feel motivated to act as advocates, or ambassadors for the show.

To that end, Mr. Roth spoke of an initiative that he and his creative team tried out on CLYBOURNE PARK. During their tech, CLYBOURNE PARK invited students studying theater tech at Fordham Univesity to observe the entire tech process, and blog about it on Broadwayworld.com. These students not only learned a lot themselves about how a professional show works from an insider’s view, but they also essentially became guides to others who were outside of the process in that the students took their personal, behind the scenes experience, processed it, and enthusiastically told others about it. These students became advocates and ambassadors for the show. One of the Fordham students attended the morning session and said that she could not wait to see CLYBOURNE PARK after her experience, that she felt a part of it all in some way even though she was not technically a part of the show, and that she was rooting for CLYBOURNE PARK to win the Tony.

Apparently, when the blog launched it received around thirteen thousand hits within the first day. By the end of the first week of posts, the blog had received over one-hundred thousand hits. Mr. Roth’s feeling was, once people read a number of the blog posts about behind the scenes at CLYBOURNE PARK, what was the next thing they were then going to potentially want to do? See CLYBOURNE PARK!

Some conference attendees raised concerns about the risks of this idea, including how so much can potentially go wrong during tech, and how was that handled? Also, what about the possibility of a negative blog post? In response to these concerns, Mr. Roth and Ms. MacKinnon said that in their case the creative team had felt confident that nothing major would go wrong in tech because the show had already had a production in New York and LA, so everyone knew what they were doing. Also, there was an understanding at the beginning of the relationship between the show and the students that the blog posts would be vetted and edited by the show prior to being put up.

Another example that Mr. Roth gave as a way he engaged people personally in relation to CLYBOURNE PARK was via his Twitter account. He created a contest essentially looking for the best answer to the question: “#iwanttogobackstage at Clybourne Park with Jordan Roth and why?” This simple (and free!) initiative had a 1-2-3 marketing punch…

1) It encouraged people to share their thoughts publicly

2) It created more fans

3) And the backstage tour with Jordan Roth and the winner would be filmed

One final example Mr. Roth gave with regard to how CLYBOURNE PARK was planning to engage audiences in a unique way was through a relationship he fostered between CLYBOURNE PARK and the Discovery channel program “How Stuff Works.” CLYBOURNE PARK would be the first theatre production to appear on “How Stuff Works” showing how stuff works behind the scenes of a Broadway show. In addition to the TV show, “How Stuff Works” also has a website that receives millions of hits and downloads, and the program is also one of the Top 10 podcasts on iTunes.

As the session was winding down, attendees questioned how ideas like these could feasibly apply to the Road. The Road is far more limited in many ways compared to Broadway in that shows on tour move from place to place in most markets after just a week, and so it’s challenging to implement techniques like these when a show is only in town for such a short period. Going back to his opening remarks, Mr. Roth basically encouraged The Road to simply start thinking about reaching audiences in creative, proactive ways that make people feel “invited in.” One suggestion he made to the presenters was to send ambassadors to other markets that have the same shows arriving at their theaters earlier in the season. Those ambassadors could then start blogging about these shows way ahead of time, getting the local audiences back where they’re from excited and better informed about upcoming shows, and creating buzz well in advance of these shows coming into town.

Mr. Roth was a dynamic and generous speaker who proved through example that there are plenty of innovative ideas out there to bring in more audiences, and I have no doubt he will continue to discover new, smart ways to connect his projects with theater-goers.

I look forward to telling you more about other topics that were covered at the conference, so be sure check back here at The ROAD 101 soon!

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On May 1 at 8:30AM EST the 2012 Tony Award nominees were announced. There are a number of exciting races, but with regard to The Road and the 2013-2014 touring season, it will be interesting to see if the charming and romantic ONCE, beloved by many, can beat Disney’s popular, large-scale NEWSIES. Will Road presenters “vote with their heart” for ONCE, as many did back in 2004 with the modest AVENUE Q, which beat out the mammoth WICKED for Best Musical? NEWSIES doesn’t need the Tony accolade as much with the well-established Disney brand behind it. If the lesser-known ONCE does not win for Best Musical, might that affect presenter confidence in the show’s ability to attract subs and singles, who may not be acquainted with the title?

And here are the nominees …

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