Are Subscriptions Dead?

 For years we have heard about the decline of subscription sales and revenue across the arts. TCG’s Theatre Facts 2014, for example, showed how “both single ticket and subscription sales were at a 5-year low in 2014.” Subscriptions specifically declined by 6%. However, according to a new study commissioned by the League of American Orchestras and conducted by the Oliver Wyman consulting firm, perhaps the issue is not subscriptions themselves, but the manner in which we have traditionally packaged and sold them. 

 By MITO SettembreMusica (4.IX Orchestra Sinfonica Nazionale della Rai)  [CC BY 2.0] , via Wikimedia Commons

By MITO SettembreMusica (4.IX Orchestra Sinfonica Nazionale della Rai) [CC BY 2.0], via Wikimedia Commons

The study drew on ten years of data from 45 orchestras of all sizes, analyzing information from 4 million customers. Additionally, researchers surveyed 1,000 concert goers to better understand the factors driving (or hindering) orchestra attendance. The results were surprising, dispelling a number of myths and, most importantly, suggesting some strategies for future success.

Contrary to expectations, dissatisfaction with programming was not a major barrier to attendance. In fact, survey data showed that among each patron segment 90% of attendees were satisfied with their experience. Subscribers were particularly happy, with 77% reporting they were “very satisfied.” Instead, the biggest barrier to subscription purchase was price, and the second was an inability to commit to dates in advance. Oliver Wyman’s research suggests a few ways to capitalize on these insights.

Decoupling curation from package size, that is offering both small curated packages and large customizable options, helps provide attractive subscription options to a wider range of attendees. Fewer than half of the organizations providing data offered customized subscriptions, but customized subscriptions were the only type of subscription showing growth. While orchestras have sold 24% fewer subscription packages and overall subscription revenue has fallen by 15% over the past decade, customized packages have shown 67% growth. Among organizations offering customized packages, nearly a quarter of their subscribers chose this option.

Improving the value proposition of orchestral attendance is a second major recommendation. Patrons often don’t perceive subscriptions to be worth the price tag. Subscription prices have increased sharply over the past decade, and while this has masked the effects of the overall decrease in sales, Oliver Wyman suggests that we may be near a breaking point. Simulations based on their data set suggested that orchestras may be within just a few dollars of a dramatic negative tipping point. Instead of raising prices they suggest offering monthly payment plans, which reduce sticker shock and open to door to auto-renewing subscriptions similar to Netflix and Amazon Prime. Additionally, although it can be taxing on box office staff, allowing patrons to buy a subscription but choose their seats later can significantly increase subscription sales, as inflexibility was repeatedly cited as the second greatest barrier to subscription.

Finally, this study re-emphasized the importance of reaching out to Millennials, who now constitute 31% of the adult population, but suggested that low price tickets may not be the most effective strategy. Contrary to common beliefs, the survey’s data showed that Millennials are less price sensitive than most other consumers, and suggested that instead the issue was with awareness and customer acquisition techniques. Recommendation engines, similar to Amazon, “bring-a-friend” promotions, and better use of social media were suggested as possible engagement tools.

Although this study specifically analyzed orchestral audiences, it seems feasible that many of the insights could apply to other types of arts organizations. In an age of customized experiences and cheap entertainment substitutes, we must adapt to ensure we are serving the needs of our visitors. You can access the full report by clicking here.