July 4, 2012

A Netfix type plan for the performing arts

Create Equity - In April, the Saint Paul Chamber Orchestra announced the launch of a Netflix-style membership model where you could “get all the SPCO you want for $5 a month.” Still relatively untested in the arts world, this pricing model allows subscribers to see an unlimited number of performances for a low monthly fee...

What makes this model really interesting is the psychology behind it. The approach captures an individual’s desire, not commitment, to attend more arts events. Arts marketers know that in order to become a subscriber, an individual must first have been a single ticket buyer, then a multi-ticket buyer. The Netflix model’s purchasing psychology is different; people decide that they can part with a small amount of their monthly earnings to have the opportunity to see art. There is less upfront financial commitment than a subscription and a lot of promise that they will become closer to the art form. Latent demand may be captured in ways that single tickets or traditional subscriptions do not.

In Seattle, this model has been working for the ACT Theater, which has created a Netflix-style subscription called the ACT Pass. Becky Lanthrop, marketing director for ACT, says that two-thirds of their members who have an ACT Pass use it on a monthly basis. Launched in 2009, the program started with 40 subscribers and grew to 1200 in 2011. At $25 a month ($20 if you are under 30), this fee is more expensive annually than ACT’s subscription for 4 performances for $200. Thus, the ACT Pass could cannibalize the theater’s traditional subscribers, and yet the company would not lose revenue. In fact, ACT might even reduce marketing costs, as annual renewal campaigns are no longer be necessary when subscribers have to opt out of the program in order to end their subscription. Regardless of whether the ACT Pass becomes the primary model for subscriptions, it’s clear that the goal of the ACT Pass is to increase revenue and loyalty to the theater company.

The SPCO’s goals are quite different than ACT. At only $5 per month, the SPCO claims the goal is to increase access, not revenue or members. Ticket sales are a marginal source of revenue and the SPCO is not focused on increasing earned revenue from subscriptions. Marketing Director Jessica Etten has this to say about the project:

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