This post was originally published on Analysis from TRG Arts.
Have you ever wondered why so many arts organizations still sell subscriptions? Subscriptions, like season tickets in sports, are a way for patrons to commit to seeing all of many of the events in an organization’s season.
Many in the arts industry say that the subscription model is dead. But if it were dead, wouldn’t it have just disappeared by now? Organizations like the Guthrie Theatre, Washington Pavilion, Hollywood Pantages Theatre, and Houston Ballet are experiencing a subscription resurgence and renaissance. Depending on your point of view, these organizations 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—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.
“Decline” doesn’t mean “dead”. Unless we make it.
Theatre Communications Group’s latest Theatre Facts report showed that the average number of subscribers at theatre organizations has declined by 6% over the last five years. Regardless, subscriptions still 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.
My career in the arts began in the last 80s, when the subscription model was assumed. As arts marketing became more sophisticated, I remember hearing that arts consumers wanted “more flexibility, more options” than the traditional subscription. So, marketers provided those options; they responded to their customers.
Careful what you wish for. We stopped selling the subscription, and guess what? Subscription behavior declined.
TRG’s work with clients has consistently shown that the way to cultivate performing arts consumers is to find a way to get their fanny into a seat—regularly. Many organizations have tried flexible subscriptions and memberships as a replacement for subscription and its associated income, learning along the way that they 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, organizations have begun to question the arts business model itself.
Today, many arts organizations believe that they have to change or die. They believe that they have to provide extraordinary incentives for people to come. They believe that they must give patrons absolutely everything that they want at any cost. That thinking 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, and demand for, your artistic product. 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 subscription is the great white hope for the arts. 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.
Performing arts organizations are not necessarily dependent on subscription. But they are dependent on the loyalty of their audiences. Put another way: If you don’t have loyal patrons, your organization is NOT viable. Art cannot meaningfully exist without an audience.
Subscription doesn’t just make money that sustains organizations; it’s also the best way we know to grow and incentivize loyalty.
Subscription gets people to arts events more regularly than any other we’ve seen. Subscription programs continue to yield the highest retention rates and lifetime patron value than nearly any other investment. Perhaps most important, loyal subscribers are much more likely to donate. While it’s possible to convert single ticket buyers to donors in one step, most loyalists who donate also subscribe. When organizations kill or under-resource subscription, a key loyalty program is diminished. Typically, a corresponding dip in donations occurs. (Example here.)
When you give up on subscription, you’re also giving up on one of your most renewable sources of revenue. And loyal patrons.
Arts organizations depend on audiences who like what they do. And act like it.
Arts managers talk a lot about why people don’t subscribe; however, there’s not much discussion of why people DO subscribe. When is the last time you considered why people subscribe to your organization? When you ask, you’ll probably 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 incentivize audiences to attend, invest, and give more.