Wednesday, September 30, 2009

Would Theatre Companies Make More Money If Tickets Were Free?

Indulge me. This started rattlin' around in my brain late last night after I put away "Free. The Future Of A Radical Price" by Chris Anderson and it's still not fully formed but Im wondering aloud now if free as a marketing model isn't a viable alternative to the one most non-profit theatres employ now. What the hell could I be talking about? Well its a little like the old bar adage about giving away salty peanuts to sell more beer.

But first of all I think the number of theatres that could benefit from free ticketing is fairly limited and even among those theatres free would have to be selectively used. For instance free would never work for the ( shameless plug alert ) big, hot, for-profit, Broadway bound show Im doing right now but that gets to the larger issue in that non-profits seem too often to market along the for-profit model when they really have entirely different goals. One is a sprint and the other is a marathon.

So enough talky-talk, lets get down to the nuts and bolts. What Im proposing pertains mostly to the types of theatre that Chicago is knee deep in, small to mid range non-profits that program a full season and are endlessly seeking to expand their subscription base and single ticket sales, which would likely also describe any number of theatres elsewhere as well I suppose.

Lets assume we're talking about a six to eight week run per show in a given season with four or five performances a week from Thurs-Sun. If a theatre regularly dropped the price of tickets on say Thursday nights to zero for everyone at the door then this is what I think might happen.
At that price point obviously the demand for seats goes thru the roof on what is otherwise a notoriously slow night for sales. If a show is decently reviewed then the likelihood is that you'll be turning people away, probably lots of people, which is good because you are now a hot, hip, unique, cultural destination which we'll talk about monetizing in a minute. Conversely if free doesn't increase demand for your product your company sucks and will probably be folding soon anyway.

Now the obvious retort is that free Thursdays would cannibalize not free Friday and Saturday. nights, why pay on Friday for something you're gladly giving away Thursday? Two reasons. First of all I think the person who attends a show on Thursday night is less likely to be demographically similar to the people the rest of the weekend. Thursday night's crowd is less likely to be made up of folks who are going to be getting up at 6:00 AM the next morning and riding the train downtown to work. Weekends audiences are older and more likely to be suburban. Thursday is different, its probably going to be a younger, more connected, urban, viral kind of crowd on that night. In other words an audience full of people who are more likely to create buzz. Buzz is good because there is money in buzz. And free notwithstanding I think more theatres should fully embrace the concept of premium pricing.

And secondly the extent to which free tickets would cannibalize sales the rest of the week is physically limited to the number of seats available. If the demand is genuine then some people are just going to have to pay for it by virtue of scheduling. Think Lady's Nights at cheezy bars.

Okay so how in the hell does this pay off?

Lets look at what theatre marketing really is for non profits. Its a hybrid of a three-party market, which means what exactly? Well lets think websites. The average website out there with content that is entirely free is making a buck off of delivering your eyes to advertisers, so they are creating content both with an eye towards the consumer and the entity that will monetize the site. Fine. So in our theater model who is the third party? Foundations.

So who are the Big Gifters out there looking to fund? Oh... I dunno... maybe theatres that have branded themselves as unique cultural destinations? Grant writing just got a lot easier and it got easier because free has made your company hip, hot, and relevant in a way it never could be with the current model. And when we're talking about being a relevant and successful producing company unique branding is really the issue isn't it?

Steppenwolf and Goodman aren't selling subscriptions and getting grants at the rates they do because their work is always exponentially better than everyone else in town, they're
like every other company in that they have hits and clunkers along the way. But they are insulated from the clunkers in a way smaller non profits are not because Steppenwolf and Goodman can market themselves as cultural franchises both to potential subscribers and foundations. The bad news for everyone else however is that the rungs on the institutional ladder get narrower the higher up the ladder you go, which is why the Chicago theatre scene is littered with the corpses of Wisdom Bridge, Remain, and Famous Door. You aren't going to beat Steppenwolf at their own game over the long haul, you need a different tack all together and just maybe that approach is based in loss-leader marketing.


  1. While there's a lot I disagree with in Anderson's book (not the least of which is his now-admitted plagiarism of wikipedia), I think you put the "free" thinking to really good use here.

    It's not completely unlike the original pricing structure of Too Much Light Makes the Baby Go Blind, right? There was a one-in-six chance that you'd get to see the show for a buck or two. It brought an entirely different crowd to their shows than if they were charging a flat rate. And that crowd would line up early, go often, and spread a buzz worth much more than the loss they were taking from not charging a flat rate. And this was before buzz was easy to spread, before the twitter and the facebook and all those things the kids love these days.

  2. Have you ever checked out Quest Theatre Ensemble? It's a theater located in Chicago (Andersonville) that does all of their shows for free--and high quality at that. They ask for donations but they pay all their actors and artists that work on the show. Their mission is to make art accessible. They've been around for almost ten years: