TRG blog: Inconveniently, subscriptions still sustain the arts.
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TRG Blog: Analysis from TRG Arts

Inconveniently, subscriptions still sustain the arts.

Jill Robinson | January 26, 2015 11:44 AM

If the subscription was really dead, wouldn’t it
have just quietly slipped away into that good
night by now and disappeared altogether? 

Photo by Tom Hall via flickr. (CC BY 2.0)

Recently, staff from the Guthrie Theater in Minneapolis attended TCG’s 2014 Fall Forum on Governance. At it, they heard remarks indicating that the subscription is dead. Guthrie leadership stood up and said “NOT AT THE GUTHRIE!”

As a result of renewed focus and investment in marketing subscriptions, the Guthrie saw a 6% increase in subscriptions last season over the previous season. This season they are currently 12% ahead of the same time last year and still selling!

At TRG, we’ve seen this type of investment in subscriptions pay off in markets large and small. In Sioux Falls, South Dakota, presenter Washington Pavilion has experienced 46% subscription growth over 2 years, and has successfully retained new subscribers. The Hollywood Pantages Theatre in Los Angeles has sold nearly 22,000 season packages for its 2014-15 season, following years of consistent increases. And Houston Ballet has grown subscription packages by 25% over the past decade, with the number of actual tickets sold to their subscribers up 27% in the same period. 

So, folks, if most of us accepted that subscription is dead 15 years ago, why are we still talking about it? If the subscription was really dead, wouldn’t it have just quietly slipped away into that good night by now and disappeared altogether? 

Depending on your point of view, the subscription successes described above are seen as a last gasp of a dying model, or proof that, despite the arts industry’s best efforts to kill it, subscriptions are still viable. Subscription is a skeleton in our collective industry closet. It’s an uncool, dirty habit that we prefer to not talk about it in smart company. Inconveniently, subscription has stuck around and continues to produce revenue for organizations, revenue upon which they are still very much dependent.

If we are dependent on subscription, are we ignoring reality?

Theatre Communications Group makes theatre industry data available to the entire arts field through its annual Theatre Facts report. We applaud this industry-wide data transparency, and appreciate that this sort of analysis illuminates and informs.

The latest edition describes that the theatre field, on average, sells 26% of its available seats to subscribers. This number hasn’t changed much in recent history, but the average number of subscribers has declined over a five-year period, by 6%. This decline in subscription behavior hasn’t apparently been replaced by single ticket buying, though—the average number of single tickets sold over the five-year period is essentially flat, as it has been for years. (See our late founder’s 2013 blog post on this same subject here). Might patrons be sending us a message with their overall buying behavior, not just their subscription behavior?

Regardless, subscribers represent an average of 16% of annual income for theatres, the second-largest source of earned revenue behind the 25% provided by single ticket income. Yes, subscription revenue and purchase behavior has been on the decline, but decline can’t be read without context, and decline doesn’t mean dead.

“Decline” doesn’t mean “dead”. Unless we make it.

My career in the arts began in the late 80s, when the subscription model was assumed. As a young professional, I distinctly remember watching the field grow, with pride, in its marketing sophistication in the 90s. Market research, new pricing models, and new channels of distribution all became part of the way to do business. I remember hearing that arts consumers wanted “more flexibility, more options” than the traditional subscription. So, marketers provided those options; they responded to their consumers. And flexible and single-ticket-buying arts consumption has grown.

Careful what you wish for. TRG Arts data study has consistently revealed that THE way to grow loyalty with performing arts consumers is to find a way to get their fanny into a seat—regularly. By providing flexible, smaller options that feature similar incentives as larger, traditional subscriptions, we undermined the pathway to loyalty that the artistic business model required. We stopped selling the subscription, and guess what? Subscription behavior declined. 

Seeing this decline has inspired panic about subscription and its place in the artistic business model for years now. The fearful question that keeps many an Executive Director up at night is: “My subscriptions are declining…the subscription is dead…but how do we replace the income?” Many organizations have tried memberships as a replacement for subscription, learning along the way that memberships don’t deliver attendance behavior as well as subscription. Without attendance, renewal rates decline, quickly reducing the return on investment of the program compared to subscription. Frustrated and desperate, organizations question the arts business model itself.

When organizations feel in crisis, the people involved with them can begin to believe that demand doesn’t exist or that they have to provide extraordinary incentives for people to come. Forget the marketing experimentation of the 90s. Today many organizations believe that they have to change or die and, to do that, give patrons absolutely everything that they want at any cost. That thinking sets up a false economy that completely undermines their brand and, eventually, their ability to keep their organization afloat.

To work at an arts organization today, you must believe that there is value in your artistic product. Sometimes, you must “act as if” and manage key variables in your business to ensure that there are events that are in high demand. And, you must balance what your audience wants with what your organization requires to survive—and thrive. You must do all this while constantly, everywhere, rewarding those who invest in the organization. Like your subscribers.

Is subscription the hope?

You’d think from what I just posited, that we believe that subscription is the great white hope for the arts. At TRG, we’re quick to say that we care much less about being right than following the data. Subscription doesn’t have to be THE way, but we’ve yet to find a model that provides so much benefit to the arts field.

The sustainability and viability of the arts is not necessarily dependent on subscription. But it is dependent on loyalty. Subscription isn’t just a money-maker; it’s the best way we know to grow and incentivize that loyalty.

Subscription is one rung on a larger ladder of loyalty, but it’s an important one. It’s the one that gets people to arts events more regularly than any other we’ve seen. And, subscription programs provide a better ROI for marketing dollars than nearly any other investment. Subscription revenue costs arts organizations less to earn because the subscription model continues to yield the highest retention and lifetime value compared to other options.

Additionally, most organizations’ donors are derived from ticket-buying loyalists. While it’s possible to convert single ticket buyers to philanthropists in one step, most of those loyalists are some form of subscriber. When organizations kill or under-resource subscription, a key loyalty program is diminished. Typically, a corresponding dip in donations occurs.

When you give up on subscription, you’re also giving up on one of your most renewable sources of revenue. And loyal patrons.

What we at TRG know is: if you don’t have loyal patrons, you are NOT viable. Art cannot meaningfully exist without an audience. Loyal audiences help build sustainable organizations.

Arts organizations depend on audiences who like what they do. And act like it.

If you don’t have loyal patrons, you are NOT viable.
Art cannot meaningfully exist without an audience. 

Photo by Sean Fraga via flickr. (CC BY-NC-SA 2.0)

Even though data shows that people are more hesitant to commit to subscription today, there are still many people who do subscribe. But the obsession in the field appears to be about why people don’t subscribe. In 2015, we continue hear that arts patrons have shown themselves to be commitment-phobes. That they are buying later and showing less affinity to a single organization. That they need flexibility.

However, there’s not much discussion of why people DO subscribe. When is the last time your organization became focused on the reasons why people make the decision TO subscribe today? When you ask, we guess you’ll see what we’ve seen: committing is actually a positive. Art lovers love art. They’re as busy and harried and distracted as the rest of us, but they love art. And how do they ensure they get the art they love booked into their hectic lives? The subscription. Not the flexible, go-when-you-feel-like-it-but-you-never-will package, but the built-into-my-Google-Calendar-and-I’ll-have-to-exchange-my-tickets-or-lose-them package. They love the art form and see subscription as the only way to ensure that it gets on to their schedule.

Obviously, only a percentage of audiences are interested enough and have the potential to be loyal in this way. But some organizations assume NO audiences are. Today, subscription can and should be a part of the mix to attract arts consumers, alongside smaller packages, membership, levels of philanthropy and single ticket options. Each loyalty step should be rewarded, organizationally.

What we should be rewarding is MORE. The more a patron invests, the more access and benefits they should get.

Forget if the subscription is dead or who killed it. Instead, ask yourself if your loyalty programs are incentivizing audiences to attend, invest, and give more.

Want to know more about rescuing and resuscitating subscriptions at your organization? Sign up for our free webinar on February 12. More information and registration available here>>


Related Articles
2.12.2015 Webinar: The death of the subscription has been greatly exaggerated
The subscription is dead evolving: What Oliver Wyman’s subscription study means for the arts

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Case Study: Lyric Theatre of Oklahoma

Annual operating budget up 32% in 5 seasons

Lyric Theatre of Oklahoma 
 Photo: Joseph Mills

After a poor year for earned revenue in 2012, Lyric Theatre of Oklahoma (LTO) had rebounded and was experiencing a growth spurt. In 2013, Director of Marketing Danyel Siler had turned her attention to single tickets.

Her hard work had paid off, but season tickets were still a challenge. “Season tickets were steadily declining,” she said. “The season ticket campaign had been done the same way for years, maybe even decades. And we blamed the fall on the trend that subs were declining everywhere. Our executive director, artistic director, and I all knew something needed to change, but we didn’t know what.”

Read More>>


Jill Robinson
Adam Scurto
Amelia Northrup-
J.L.Nave Vincent VanVleet Keri Mesropov

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