Survey of Arts Management

Course blog for American University PERF-570, Fall 2014

Are discounts a good idea?

 

The Royal Opera House recently held a ticket promotion for their production of Anna Nicole. The promotion made reduced ticket prices (£1-£25 or $1-$40) available for people under 25 years old, a tactic commonly used to entice younger patrons into the theater. With fingers crossed, the under 25-ers will have a positive experience at the opera and will be intrigued to return again and again with full price tickets. The whatsonstage.com article, Opera Discounts: Do They Deliver, questions whether or not these types of promotions actually lure new audiences back to the opera after the promotion has ended.

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Because of the “anchoring effect” (a theory popularized by Nobel-prize winner Daniel Kahneman) people may become reluctant to return to the theater with a full price ticket after acquiring one for only a dollar. They could become expectant of dramatically reduced ticket prices, and would not want to partake in a full ticket price because it is not as a good as a deal. If they know the monitory value is flexible and could be purchased for much less, they may skip the trip to theater until another good promotion comes up.

I have experienced this anchoring affect first hand. Several years ago, I used to work in overly priced retail (Anthropologie) and would receive 60% off purchases. Since I no longer work at this company and no longer receive the discount, I refuse to purchase anything full price from these stores. Even though I shopped there long before I was an employee, I now know the products are not a good deal because they are marked-up much more than they should be and the high price tags are not indicative of quality. If I ever feel like I need to make a purchase from that store, I will wait for the item to go on a serious sale before I even consider laying down money.

As Arts Managers, it is on our best interest to practice promotions that help the longevity of our industry. Do you think the “anchoring effect” theory is applicable to ticket promotions? Or do you think patrons who have received discounts are open to paying full price if it is an art form they are enthusiastic about?

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7 comments on “Are discounts a good idea?

  1. zeniasimpson
    September 25, 2014

    I love this sort of complex idea or debate on discounted tickets and could this help or hurt an organization in the long run. I think in short – it depends. Discounted prices are what students expect from most places. I think a student discount ticket makes sense or a once-in-a-blue-moon Gilt City discount ticket is wonderful. I will emphasize using Gilt City only for cultural events to keep it still posh but still cheap.

    I think where organizations go wrong when thinking about this debate is thinking that if people come with discounts and love it soooo much they’ll come back for regularly priced things which I’ve found to be false. The focus should be more on if the performances themselves would appeal to a younger demographic in general. Perfect example: during Armory Week, MoMa throws a massive fundraising party that has amazing hip DJ’s and a performance by a cool artist like a Solange. It appeals to younger artgoers who go to Chelsea to be seen and not to see art, but don’t mind if an artwork catches their attention. We’re an event and “do-it-for-the-gram [Instagram that is] dominated culture, and if performances haven’t changed their audience engagement practices past Groupon, then no one is going to return no matter what ticket prices are. Oh, going back to MoMa, the party was $145 and with a VIP pass that let you have a tour of the upcoming exhibit, was $225. I was actually heartbroken when it sold out before I could purchase them. While I’ll flash my NYU id proudly to not pay for the Whitney and fend off the Guggenheim because they don’t do any discounts, if MoMa promises an amazing experience (loving that word now, secretly) then they’ll get top dollar no matter what and my patronage for a lifetime.

  2. lcrowley2014
    September 26, 2014

    I like this issue! In my opinion, discounts are not a good pricing model for the arts (especially theater where, as we discussed in class, an empty seat has no value 5 minutes into the performance). Discounts are not a good pricing model unless they are consistent. Here’s what I mean by a consistent discount – my boyfriends family is Brazilian and during a recent visit were commenting on how inexpensive concert tickets were here for them because in Brazil the pricing system for many cultural experience is very heavily discounted for students and seniors (60+) and increased for professional, working age people. So whereas here we have a set price for admission and then offer discounts, in Brazil there are two established pricing levels. The logic is that middle age people such as my boyfriends parents can afford to go to see a show if they really want to but they are also leading busy lives and have full schedules, so they can’t always fill the seats. Students and retirees have more time but less income. This pricing structure is pretty established and accepted. Even my boyfriends parents were saying its helpful that their 24 year old son can come to shows with them because his ticket is much less expensive (where in the US, perhaps just the parents would go).
    I’m skeptical that this pricing structure would work here since discounts are so embedded into our way of thinking. Just like your experience at Anthropologie – when you know that you can get something at a lower cost, it’s nearly impossible to justify paying full price. Personally, I think it would be detrimental if visitors of my arts organization had the discount mindset, they way they might at the grocery store or really any commercial good. (Most goods are priced marked up so that they can then be marked down when a company needs to push volume rather than price for their good.) It’s important for visitors and “consumers” of the arts not to loose sight of the fact that this isn’t like a trip to the grocery store, they are “purchasing” an experience and memories.

  3. alexgilbertschrag
    September 26, 2014

    This is an interesting thought process. I too, knowing that I can shop at Tj Maxx or Marshalls for brands such as Kate Spade, Dolce & Gabbana, would rather shop there than at Saks where everything is full price, (and probably marked up). Because we love discounts, even the idea of them, I wonder if perhaps it would work if the tickets began more marked up and then were “discounted” to what would most likely be a “regular price.” I also greatly appreciate the student discount. We have a small, local movie theater at home that we enjoy frequenting. They play indie films and have a couple of movie festivals every year. They provide different levels of membership where you can get popcorn, or free movie tickets, and discounts all the time for a flat fee that lasts for a year. They have a student package option, but if you don’t want to purchase the package deal, you can instead visit from Sunday-Thursday for $5 a movie with student ID, or the regular price is $8 per ticket. That small jump in price has never stopped me from attending movies on the weekends. I’ve even considered purchasing the packaged option, but not living there through the entire year would most likely be a waste.
    I wonder if this works with arts? Wanting to get a younger crowd in consistently, maybe they should offer a student package that would include get togethers and other fun events geared towards the younger members. We have memberships and different levels of donors that get private parties and meet and greets with those important to the arts organization. If we started allowing younger audiences to have that opportunity and to feel more connected, maybe not just the discount would keep them around, and instead we’d have more consistent events attendees if they began developing a group.

  4. laurenelizabethdickel
    September 26, 2014

    I thought this was a really interesting article. The concept of student discounts and younger audience discounts is a phenomenon I have to say I completely agree with. Before I moved to DC I was admittedly spoiled and accustomed to going to the Opera for 10 Euros or less all the time. You could buy student tickets for 4,50 and any ticket that was not bought 30 mins before the show was sold for 10 Euro to students.

    While I was already an opera fan and probably would have paid for up to 60 Euros for my favorite opera, many of my friends who knew nothing about opera would go for the original discount.. and the amazing thing is they kept going. I recall in one of the readings, that discounting tickets was considered a poor long term plan because typically people would only come to discounted shows. BUT if we always had discounts or reduced rates for students and under 25’s the people would keep coming and slowly the opera world would be securing younger audiences that are more likely to keep going to opera when they cross over the age limit. Opera takes time to understand and really love, so if a person is given the opportunity to come more often they may build an appreciation for the art over time that will last them a life time.

    I have to say I think its completely awful how incredibly expensive it is in DC to go to the Opera. No wonder the audiences are old, white people.. ( I know I am stereotyping)..but still.. like Amanda Sweet said in the Marketing class last night ” these audiences are literally dying..”

    If only America valued these so called ” luxury arts” enough to make them more regularly accessible…. After all, opera used to be for the “commoner” and an exciting experience that all people could attend.

  5. jaredchamoff
    September 26, 2014

    I like this topic too! I think that discounts are so crucial to get new people into the concert hall. The student discount tickets are such a great way to get young people interested in the arts. Ticket discounting provides the performing arts a chance to compete with other forms of entertainment that young people might choose instead, like going to the movies or a sporting event. With little to no money, young people are always trying to find cheap ways to be entertained. Student discounts certainly can fit the bill!Personally, I have taken advantage of as many student discount opportunities as possible.

    Like Lauren said above me, I think that providing affordable opportunities for the under-25 crowd to attend high culture events like the opera can help foster a life-long interest in the arts. While some of these youngsters would only attend such events at low prices, I feel like we should not discount the possibility that some may actually thoroughly enjoy the experience in itself, regardless of the cost. Perhaps these are the people that in the future would be willing to spend high amounts of money on the arts… maybe even become SUBSCRIBERS! :0

    If anyone is interested in ticketing, in my Technology/Marketing Class we had to watch a few videos on dynamic pricing and the process of coming up with ticket prices.

    Here is a link to one! https://www.youtube.com/watch?v=pKhV-Yz8No8&index=7&list=PLXn2SmoQIN49uPkf0PHEQCuDMPhbNdk1B

  6. hgenetos
    September 26, 2014

    I don’t see why not discount tickets. If it drives traffic and creates new regular visitors through a positive experience, why should we frown about it and discourage it? My friends and I regularly snag the discount tickets to the Newseum to use when we have friends in town. For one, we all love the museum. Secondly, it gets people engaged in topical matters. Thirdly, it drives traffic every time. You see a surge in visitors when they do these promotions. With the shortage of funds in the arts, We should not neglect and turn our nose up At any attempt at visitors.

  7. sarasps85
    September 26, 2014

    Yes…”reduced prices” is one thing and “promotions” is something else. Like Lauren, I completely agree with the first but not a big fan of the second option. In Europe they extended the Youth Card (a discount card for all the main museums, theatres etc. valid in EU zone) from 26yrs to 30yrs which was a very useful initiative, specially for (us) millenials I guess…
    I wait for brands that I like to go on sale but I don’t expect that from cultural centres, theatres or museums. But why? First of all I can’t compare what drives me in the first place and fortunately due to reduced prices I could afford performances I really wanted to go to.
    When it comes to popular music concerts this discounts never apply, the same in festivals (at least in Europe) and that does not keep audiences away. Writing these things down it´s also making me confused about the matter. Zenia is right when she says it depends. It does. If you want to do promotions you also have to make sure you communicate it in a “non-groceries” way and also taking into account the target audience and the art form itself.

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