Thoughts from a Los Angeles Theater Producer

You Are What You Wear

Posted in Producer Tools by Rick Culbertson on September 21, 2009

We need to upgrade the professionalism of the front-of-house processes, especially in the 99-seat theaters.  Now, this is certainly not true for all theaters– there are some very well run theater companies out there who don’t need to listen to me. But, unfortunately, LA is also home to some companies/productions/theaters that are sorely lacking when it comes to front of house professionalism.

 Remember, a show doesn’t begin when the performance starts.  It begins when a patron starts looking for parking.  When coming to the theater, a patron will come into contact with some combination of the following: a valet, a box office staff member, a house manager, a concession staff member, and an usher(s)– all before the show begins.  A patron will judge a theater’s professionalism by their interactions with these people.  Since they’ll deal with these people before they see the show, these staff members are, in many ways equally as important as the quality of the show itself.  As a theater company, if you fail a patron before the curtain goes up, you will likely not get them back.  

Here are some areas that I suggest we all address for quality check: 

  • Parking
    • Are our patrons informed about our parking situation when they buy their ticket?
    • If we have valet services, do our valets have enough information to answer a patron’s basic questions?
  • Box Office Process
    • Are our box office processes efficient? (Do we always end up with long lines?)
    • Do we have procedures in place to handle the most common problems so that they can be resolved quickly and professionally?
  • House Management
    • Does our house manager/usher have the ability to get people into the theater quickly and efficiently?
    • Do we open the house between 7:30 and 7:40?
    • Do we start the performance promptly at 8:00? Or at the very least never later than 8:05?
  • Dress Code
    • Do we have a clearly defined dress code for our front of house staff and box office people?  Do they look professional?
  • Late Seating
    • Do we have a clearly defined late seating policy?

 Now I will expand on what I believe to be the most important issues:

First and foremost, every person that deals with patrons should be dressed professionally.  I recommend that at a minimum, we should all be dressed as we were interviewing for a job in an office– or at the very least, wear khaki’s and a polo shirt with our company/theater/production logo on it.  If our house manager and box office personnel don’t dress professionally, then we simply don’t have a professional production.  End of story.

Beyond that, we need to start making an effort to open all of our houses at 7:30 and no later than 7:40.  I know there are emergencies, but it should not be common occurrence to open our house at 7:50.  It’s just not professional.

We need to start our shows on time at 8:00 (and no later than 8:05). I know we always have people who come late, but think about it: more people were on time.  When we hold our house for a late patron, we are basically saying the late patron is more important than all the other patrons who arrived on time.  Let’s make a commitment to starting our shows at 8 PM.

And when we do have late patrons (which we always will since we are starting on time), let’s make sure we have a solid late seating procedure.  Tape off some seats closest to the door so they are available for late patrons.  Hold your late patrons until an appropriate time (I was once late to a musical at a 99-seat theater in LA and I was seated during a song–  not professional).  And while we’re holding our late patrons in the lobby, it’s not a bad idea to have the house manager/usher fill them in on the plot– whatever portion of the show they’ve missed so that when they do sit down, they will understand what’s going on.

These are all very simple things that we can each implement right away.  They cost nothing, and will make our theaters far more professional.  The more companies that operate with a professional looking front of house, the more professional our industry will look.

Maybe, if we had a Producer’s League, we could hash out and agree to some general guidelines that would serve as a minimum… visions of the future.

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Rebranding Revisited

Posted in Producer Tools, Producer's League by Rick Culbertson on September 17, 2009

In my last post I argued that we should embrace Hollywood and market ourselves as the place where you can see working Film and TV actors on the stage, live and up close.  David O (My amazingly talented musical director for Divorce! The Musical) took an exception to my post. 

 Click here for my last post and his comment.  And then read on for my response.

David makes an interesting point.  But, is that all our theater community is?  “Cutting-edge, risk-taking, avant-garde, rock & roll, ethnically diverse, forward-thinking art?” I don’t think so.  I do agree that all of his examples are as he describes, but I certainly don’t think that Divorce! The Musical, Marvelous Wonderettes, Louis & Keely, and Life Could be a Dream are cutting edge shows.  Divorce!, though it offers wholly original music, is definitely not avant-garde. 

And what about this assertion that “there is a substantial community here that creates theatre, true theatre, that doesn’t give a fuck about film & TV artists (no offense), that is truly on the cutting edge of the art form?”  I don’t think this is correct, at least not when describing the community as a whole.  As I said before, I don’t think I have ever seen a play or musical in LA that didn’t have at least one actor with a Film and TV credit.  And LA theater is filled with writers and directors that work in both mediums as well.  We have seen material move from the stage to the screen and from the screen to the stage, countless times.

Let’s face it; artists don’t come to LA because they just want to make a living as a theater artist.  If an atrist’s only goal is to make it in theater and theater only, he/she is not going to eat very well in LA.  Like it or not, LA is Hollywood— both in location and industry.  Just as New York is Broadway.  Hollywood is known for its film and TV industries, just as Broadway is known for theater.  Changing that perception in the minds of the general public is probably not going to happen.

That is why I suggest we embrace our relationship to Hollywood.  After all, Hollywood is very connected in our theater scene.  The Actors Gang is a perfect example: we all know Tim Robbins is this theater’s Artistic Director.  I’m sure he cares a little about film and TV.  Also, the very money that I raised to fund the LA production of Divorce! predominantly came from people who make a living working in Film and TV.  My hope is that by embracing Hollywood, we will raise the profile of LA theater, raise the awareness that we are so interconnected, and stop this argument of superiority. We need to start agreeing that we all want to tell stories– in whatever medium the story needs to be told.

Perhaps most importantly, there is an untapped market of theater audiences in Los Angeles- both local citizens and tourists who don’t still have no idea that we are here, and who don’t understand what we have to offer.  We are perceived as being out-of-work film and TV artists who are only able to do waver theater.  Showing the world that in reality, we are actually working film and TV artists doesn’t play into the stereotype– it changes it.  It changes the perception that Los Angeles offers “community theater quality”  to an understanding that in fact, we offer “professional theater quality.” 

That said, however, what I think David is really addressing is that for him, LA theater is cutting-edge.  For me, it’s something different: its original, small musicals. For a lot of people it’s sketch comedy.  Can Los Angeles theater be all those things?  Yes– and so much more.  Because we are now describing different niches of the L..A theater scene.  We have tons of niches! David lists several.  Add them all up, and we end up with an abundance of new, diverse works of theater that make our community thrive.  It is this abundance and this diversity that “really distinguishes LA Theatre from the rest of the world.” 

What David is suggesting is that we rebrand LA Theater by highlighting a niche. But not all of LA theater is that specific niche.  What I propose, is a re-branding effort targeting the entire theater scene as a whole.  By first rebranding and marketing this collective scene, we can raise the profile of the entire theater community to a much wider, more diverse audience.  WIth my plan, we wont be marketing different companies, shows or niches. By contrast, we will be saying, “instead of going to a movie, go see a play!”  Think of this as being something akin to what the Beef. It’s what’s for dinner campaign did. With this message, they were simply saying: “Don’t buy chicken (or another meat), buy beef.”  They weren’t telling you what brand of beef to buy– just to buy beef.

We need to take a step back and realize that we need a cohesive plan for marketing theater in Los Angeles as a whole. 

We need to raise the awareness of our theater scene, and change the perception about its quality. 

We need to establish a visual presence on billboards and busses, there for all to see– the same way Hollywood’s film industry does when it markets its movies.  

Right now, when I drive down theater row at night, the whole area just looks like empty buildings surrounded by car dealerships (I will write about this unfortunate problem later).  We need to upgrade our look, remind people we are here, and that we stand together as a community. We need to show the general public that L.A. has the best artistic talent in the world.  Most of this talent has come here because of Hollywood, but the gold is in the fact that they also do theater.  Good theater. And some of this Hollywood-driven theater is cutting edge.  Just ask Tim Robins.

Let’s Rebrand!

Posted in Producer Tools, Producer's League by Rick Culbertson on September 14, 2009

Let’s face it– we have a bad rap as a theater town. All of us, at one time or another, have referred to LA theater as a bunch of out-of-work actors trying to break into to TV and film (I myself am guilty of this too). But whenever we say that, we seem to be trying to disassociate ourselves from Hollywood, the industry. Why? Hollywood is our greatest asset. What if we embraced it? After all, two of our main theater districts are in Hollywood: Theater Row and NoHo. What if we re-branded ourselves as a place where working TV and film actors perform on stage? In the past 12 months alone we have seen both Laurie Metcalf and Megan Mullally perform on 99-seat stages, and on our larger stages we have seen John Mahoney and David Hyde Pierce, plus many more. And I don’t think I have ever seen a show in LA in which at least one person in the cast didn’t have a TV or Film credit. Instead of calling ourselves the theater town of out-of-work TV actors trying to break in, why not rebrand ourselves as being a magnet for good, working TV actors who also appear on the stage?

To do this, we could launch a city-wide ad campaign featuring “A-list” stars. We could put their pictures on billboards and on the sides of buses with a saying like “I am Los Angeles Theater because…”, or “Support Los Angeles Theater and go see a Play!” or any number of better slogans that real marketing people could come up with. It could significantly help us re-brand ourselves, and raise the profile of the theater community.

We could target this campaign to tourists in Los Angeles. Did you know that according to discoverlosangeles.com (a website devoted to tourism in LA): 

  • In 2008, Los Angeles welcomed more than 25.6 million visitors.
  • Direct visitor spending totaled $13.8 billion in 2008.
  • In 2008, Los Angeles continued to be the second ranked destination for overseas visitors behind New York.

We need to tap into this. And tourists want to come to LA to see TV and movie stars. In New York, tourists see a Broadway show because it is THE thing to do. Sure, the Empire State Building, the Status of Liberty, yadda, yadda, yadda, but the Broadway show is the MUST do when visiting New York. The funny thing is, a lot of times people have no idea what shows they are supposed to see. They just know they are supposed to see something. (I spent a year as a Broadway usher, I can tell you stories…)

So why not us? I mean come on, we are HOLLYWOOD! Is there any other city in the world more focused on entertainment and the performing arts? But when people come to LA they are merely directed to go put their hands in cement prints and see a movie in the Chinese Theater. If we rebrand ourselves to be a place where a tourist can come to see working TV and film actors on stage, up close– I bet you they will start coming. And the theater community will deliver. We can market our TV and film credits of our actors as a positive feature of the theater community– something we offer that most theater towns truly do not. You see us on TV, you see us in the movies…. Now, here we are on stage!

You are probably thinking, “But how would we pay for this grand marketing scheme?” At last count, there was an estimate of around 1200 99-seat shows that went up last year. And those are just the 99 seat shows. If each one of those shows put $100 into this campaign, we would have $120,000. What if each show put in $200? Now we are at $240,000, plus we could include the bigger shows that could each probably put in more. And I know we could get some grant funding to offset these costs. Finally, we need to remember the value of LA Stage. They are marketers, and our main hub– a place where the theater community comes together. So, what if we put all our discount tickets on LA stage and only LA Stage? After all, if we have to sell tickets at a discount, let’s do it in a way that the LA Stage Alliance would receive the service fee. They could then use the money to launch this ad campaign. While Goldstar and other for-profit companies keep our ticket charges, offering no benefit to the theater community, LA Stage is a non-profit and therefore can put a portion of these revenues back into marketing LA theater. I also believe there are many A-list actors in town who would donate a publicity shot to use for promoting theater in this way. So many of these actors are at the core of many of our great small theaters already! Let’s get them out, front and center.

With a citywide, “A-list” driven marketing campaign, paid for by a small fees generated by each production, and by our agreement to sell our discounted tickets (when we have to) on LA Stage ONLY, we could redefine, refresh and rebrand our theater scene… and transform our mediocre reputation into a good one.

It will take leadership and will power. It will take our theater companies and producers coming together. Can we do it? Can LA Stage Alliance do it? Maybe. But if we had a Producer’s League, I know we could.

Paper Patrons Should Pretend to Pay Premium Price

Posted in Producer Tools, Producer's League by Rick Culbertson on September 11, 2009

This is the fourth part of a five-part blog series about half price tickets (read the other parts here: Part One, Part Two, Part Three).

Over the last few days I have talked about how selling half priced tickets has lowered perceived value.  I have argued that we need to explain our costs honestly to theater patrons and use better pricing models so that they will understand the real value of our tickets, thereby being encouraged to pay at full price.

But let’s face it.  Sometimes you just can’t get people in the door.  Some shows– be they experimental, limited in their appeal, or just not that good– still need to fill their houses.  In these cases, even with properly priced tickets and smart discounting, a producer just needs to give tickets away.  Or, to use the theater phrase, you need to “paper the house.”

The problem however, is that I don’t see any real papering companies in LA.  Or if we do have them, I don’t know about them.  (So if you are a papering company and you’re out there, you need to make sure that every box office manager in the city knows who you are!)  This lack of papering companies leaves us with few options.  Sure, we can offer pay-what-you-can discounts to friends of the cast and crew or other such limited options.  But most of us end up giving tickets away for free through Goldstar or Plays411.

Just like with half price tickets, we then run into problems.  We immediately lower our perceived value by broadcasting to the entire community of theater patrons: “we are desperate, so please come for free!”

When I managed a box office in New York for a concert hall on the Upper West Side, one of the services we performed was to paper the house when we couldn’t sell tickets. In New York, unlike in Los Angeles, I used real papering companies. Each company had a small, managed list of patrons.  Each patron would have to “interview” with the company in order to determine whether they were responsible and worthy of the free tickets. If they were accepted, then they would pay a fee and agree to a certain set of rules:

  1. They would have to show up. When I sent an allotment of tickets to a paper company, the paper company would send me back a list of patrons who had committed to attending.  After the performance, if a patron didn’t show up, I would notify the company and if the patron was a no-show more than three times in a year, they would get kicked out (with no refund).   The rule was clear: if you sign up, you show up.
  2. There is a limit to the number of tickets a patron can have for an event or a venue. So if they like you, they have to start paying after a set number of times attending your show or theater, even if there are still comps available.
  3. If you are non-profit, they are encouraged to donate to your theater if they like what they saw.
  4. Most importantly THE PAPER COMPANY’S PATRONS HAD TO BE DISCRETE! They were instructed to stay silent, telling no one that they had received a comp ticket.  If a patron was caught talking about how they received a comp while at the theater, I would report that patron and they would get kicked out of the papering company (with no refund).

 (Go here to check out a New York papering company and read their “about” page.)

 This discrete rule is unbelievably important.  All week I have been talking about my patrons and Goldstar.  Here is another anecdote:  One night before the show started, a little old lady, who clearly had no concept of talking softly to the person sitting next to her, said, in a very loud voice so that half of the house could hear: “What!? You paid full price?  Why would you ever pay full price!?  I bought my tickets on Goldstar where they are always half price!”

Again, this points directly to the issue of perceived value– but it also points to the lack of tact and understanding on the part of many of our patrons.  We need papering companies to build an educated audience so that, when we need them, we can offer free tickets to a small, reliable group of people, without devaluing our product to the rest of the public, and without fearing that our patrons who did pay will feel as if they got screwed. If you are a theater company, this is even more important.  After all, let’s face it– you are going to produce a bad show eventually.  And when you do, if you discount and comp like crazy, then two things will happen: First, you will eventually get the same lady that saw my show, and she will broadcast to everyone around her who paid more than half price (or anything at all!) that they are suckers. Second, patrons will begin to expect you will offer them comps for every show.  Then, when you turn around and produce a good show, the same patrons will expect discounts and/or free tickets.

Real papering companies help to prevent this.  They help you fill your house discretely, with patrons who are educated, pre-screened and promise to pretend that they’ve paid a premium price. The difference between these types of patrons and the little old screaming lady can’t be underestimated: it is a difference that can make or break the run of a show. 

Coming Monday: The case for a citywide Theater Marketing Initiative.  Click here for this post.

Honesty is the Best Policy

Posted in Producer Tools, Producer's League by Rick Culbertson on September 10, 2009

Today is part three of a five-part series of blogs about half price tickets. Read part one here and read part two here.

Yesterday I talked about how the widespread availability of half price tickets degrades the value of the entire theater community. I also talked about the fact that one of the big reasons we offer half price tickets is because companies like Goldstar and Plays411 force us to sell them if we want to be included in their marketing efforts.

Obviously, no producer wants to sell half price tickets, but the lack of marketing funds and creative promotional ideas often forces us to give in to Goldstar and Plays411’s demand to cough up that half price ticket. This, in turn, lowers our perceived value.

I would like us to start combatting that low perceived value. We must raise our perceived value back up to what our true market value should be.

Now, we can’t just snap our fingers and raise our perceived value. Nor can we quit dealing with companies like Goldstar cold turkey. But we could potentially come together as a community (say, through a Producer’s League) and build a smart plan to implement gradually. Here are my ideas for the basis of this plan:

  1. We need to be honest and educate our patrons about our true costs. They must know what our realities are if they are to ever “change” their percieved value of our ticket prices.
  2. We need to set our market price correctly, and use discounts smartly
  3. We need to develop better papering companies. (Papering companies distribute free tickets. More on this tomorrow.)
  4.  We need to create a citywide ad campaign to raise the profile of Los Angeles theater. (More on this Monday)

Ok, in this post, I will break down the first two items…

  1. We need to be honest and public about our true costs.

When I attend a show at a non-profit theater company, I often come across a sign or message in the program stating some variation of the following: “Ticket sales only make up a portion of our overall income. Please consider joining us as a donor to help support our artistic vision.” That’s all very well and good. But you know what? A lot of people never donate. It’s not that they are cheap or don’t care– it’s just that the message isn’t personal or specific. The theater company isn’t explaining why ticket sales only make up a portion of their overall income. And to be honest, ticket sales are only a portion because the sell so many tickets at half price. What would happen if we were all more direct with our patrons? What if we told patrons that each seat in each performance has an actual cost of $22.00? Or, based on the projected attendance, each ticket would need to be $45 in order for the production to break even. Let the patron do the math. They know what they paid. Let them think about it.

I will use myself as an example customer. When you tell me that ticket sales account for only 60% of your income, it makes me think two things: First, it makes me appreciate the Ford Foundation even more (or the NEA, or whoever you list as your corporate donor). Second, it makes me sad that you can’t sell more tickets. It never occurs to me that I am not paying enough, because I have this perceived value that a ticket is worth the price I paid (which is likely half price). But if you told me that the ticket I bought for $12.50 actually cost you $25–well then I might start to understand how I fit in to the larger context of your budget. I would then have a very real sense of what it takes to make your theater/production operate. I would know that when I paid $12.50 for that half price ticket, I ended up costing you money, and that I am not paying my fair share. My perceived value of the ticket begins to change.
Yesterday I told a story about a patron that was furious that he couldn’t get a half price ticket to my show. Well, there were several patrons who I spoke to who did get half price tickets. Every time I talked to them I would always explain that they bought their ticket below cost, which, in essence, means that I am subsidizing their experience of coming to my show. I also explained why I was essentially forced to offer the half price ticket. Every single person who I explained this to said, “If I had known, I would have never bought a half price ticket.” They assured me they would have paid full price.

BUT THEY DIDN’T KNOW!

We need to have this conversation with our audiences. I think you would be surprised at how many patrons would gladly pay full price if they understood the true cost of their ticket. They want to support us. Theater companies are not evil corporations trying to screw everyone into order to increase their profits. Theatre companies are not big banks, or oil companies. We are theater companies! People want us to succeed. That is why we have donors in the first place.

     2.    Set your market price correctly.

If you need to sell half price tickets to every performance because you can’t sell full price tickets, then your full ticket price is simply too high. But if you are trying to give people an incentive by offering cheaper tickets, you have to do it as a “limited offer.” We need to take away the always-available half-price tickets. We need to make this offer special– not the norm.
Instead of pricing every show at $25 and then offering half price tickets at $12.50, how about we implement a pricing plan like this:

Thursday – $15
Friday – $25
Saturday – $25
Sunday Mat – $20

Maybe we could offer a deal: if the patron orders before opening night, he/ she can get any ticket for any performance for $15. Additionally, we could offer 20% off any performance for any group over 4 people.

You want to hear a really outside-the-box idea? What if we price our tickets like airlines: The earlier you buy, the cheaper. The later you buy, the more expensive. So if we had 5 tiers of 20 tickets in each tier, we could offer levels that start at $15, then increase to $20, $25, $30, and $35. I don’t know if this would work. But, hey, I would think that it would certainly get some press!
The point is, let’s TRY something different. Maybe your theater already has. Has it worked? Tell us! And tell us publicly, so the patrons can understand too. These shouldn’t be trade secrets. The public discussion about ticket pricing will provide our patrons with more information when they buy our tickets. When they understand the actual cost, they can put a better value on the experience of coming to our shows. And hopefully, albeit slowly, their perceived value will start to rise.

Stay tuned, tomorrow I will talk about papeing companies and then Monday I will discuss the last two items above!

(Click here for the next post)

Less is Less

Posted in Producer Tools, Producer's League by Rick Culbertson on September 9, 2009

As I promised yesterday (click here for yesterday’s post), today I will talk about the devaluation of the theater community due to the current wide-spread sale of half-price tickets.

Now, this isn’t meant to be a full lesson in economics, but we need to understand a few things first:

One of the most important jobs a producer has is to set the market price of a show’s ticket.  We need to make sure we can afford to run our show from week to week.  We need to try to save a little extra in order to recoup the pre-production costs so that we’ll have money to produce again.  We have to gage the market and try to determine what it will bear.

To do this, we must look at the weekly running cost of our show and average it across the number of seats. We take into account what we will need to recoup the initial production cost.  And we look at other shows and see what price their tickets are selling for.  Finally, we build a demand curve to see if our market price is sustainable and realistic.

When you build a demand curve, the basic theory is this: the higher the price the less you sell, and the lower the price the more you sell.  The market price that we want to reach is that sweet spot at which the amount you sell, multiplied by the price you sell, makes you the most money. If your market price ends up being lower than your costs, then you did something wrong.  If your market price is higher, then you are in business.

Here is an example of pricing points on a completely made-up demand curve for ticket sales: (This does not take into account cost per ticket)

Point A = 100 tickets sold at $5.00 (Gross Revenue = $500)

Point B = 50 tickets sold at $25.00 (Gross Revenue = $1250)

Point C = 10 tickets sold at $50.00 (Gross Revenue = $500)

In this example, we see that it will be ideal to set our market price at $25 (Point B) because doing so will maximize our income.  Yes, we will sell fewer tickets than if we were to set the price point at $5.00, but we will end up making $750 more. You get the idea.

So in this example, we know we should be selling our tickets at $25.00.  But often, one of the first things we do when we open a show is cut the price in half, for every performance in the entire run.  Often even after getting great reviews!

Why?  Marketing.

Marketing is expensive.  It’s time consuming.  It’s hard. So here come Goldstar and Plays411 with their massive lists of subscribers that want to go see theater.  These companies send out lists every week by email.  They promise to take care of everything and deliver butts in seats! They promise to reach tens of thousands of people on our behalf, maybe even hundreds of thousands.  All we have to do is give them a few half price tickets to sell.  And, best of all, their service is free!

Except, it’s not free.  It comes with a huge cost that I don’t think anyone sees.  That cost is the perceived value.

“Perceived value” is the value of a product to the individual consumer.  It is not the market price, it is not the cost.  It is not based in reality, but rather, on the perception of each individual patron.  Nonetheless, perceived value is extremely important.

When we cut our ticket prices in half, for all performances, in exchange for Goldstar to include us on their email list, our patrons see this and begin to think that the price should be half.  After all, if it was a valuable ticket, the price wouldn’t be cut in half.  They think that the patron’s demand (or lack of demand) for the ticket is what’s lowering the price.  In reality though, it’s the producer’s demand for free marketing that’s at work– marketing that is only attainable by lowering the ticket price.  The individual patron, meanwhile, begins to create a perception around the idea that they should always be able to get half price tickets. And after seeing many productions, the vast majority of these patrons are no longer willing to buy a ticket for more than half price.  They perceive the value of ALL tickets to always be at half the full “market” price. The patron doesn’t understand the producer’s cost per ticket, nor the marketing forces that make us offer half price tickets in the first place.  They don’t even understand the real reason why they have the perception that theater should always be half price. All they know is, they’re used to getting a deal.

As a result, our market value drops.  We can no longer sell our tickets at full price, and the new perceived value of half price tickets becomes the new market price.  Often, this discount is well below our actual cost.

One night when I was working as house manager for my own show (Divorce! The Musical) one patron approached me, furious that I wasn’t offering more half price tickets. (Early in my run I offered very few at half price, they sold very fast and then they were not available for several weeks.)  This particular furious patron waited and waited for me to release more half price tickets. When I didn’t, he got angry.  He eventually bought the full price ticket ($35), but he was so angry about it, that when the show started, he was STILL angry.  Yikes!  That is not the mood I want my patrons in when the show starts.  The reason he was angry, though, was not that he paid $35– it was that he didn’t get a discount.  Full price, no matter what it was, was higher than his perceived value of the ticket — and this perceived value would always be “half price.” If I had set my full price at $70, and then sold him a half price ticket for $35, he would have been happy.  It’s all about the perception. Just look at Broadway: their ticket prices have doubled in the last 15 years largely in response to the rise in half price ticket volume.

The real detriment to lowering the perceived value of our tickets, is that is it makes it harder to produce real quality theater. You simply need to charge higher prices in order to pay for higher quality theater. If we can’t sell it at the price we need to sell it, we won’t produce it.

And at the end of the day, discounting our tickets should be a marketing tool that producers are always in control of.  We can use this tool to help a struggling performance (like many on Thursday nights), and we should be able to experiment with different discounts (like only 25% off), and to entice people to put together groups who can pay at a discount.  Discounted tickets should not be a generic commodity that we trade for simple marketing lists.  This is an unbalanced trade that is not in our favor.  It’s a lazy way to market.

And it lowers the value of the entire theater community.

Tomorrow – my thoughts on what we can do to raise our ticket’s perceived value, and stop half price tickets from being the norm.

(Click here for the next post.)

The Price is Wrong

Posted in Producer Tools, Producer's League by Rick Culbertson on September 8, 2009

Why do we sell half price tickets?

Two reasons.

  1. Butts in seats. After all, an empty chair can’t spread the word.
  2. Marketing. Goldstar, LA Stage, Plays411, etc all offer free, or very cheap, ways to market our show to tens of thousands of people. Of course to do so, we have to let them sell an agreed upon number of tickets. And always at half price.

Ok so reason number (1), above, is a good argument for offering discounted tickets. After all, if you can’t sell every single ticket at full price, then by all means just get someone in the seat.

But what about reason number (2)? Let’s think about this. In theory, companies like Goldstar shouldn’t really care what our ticket price is. After all, they don’t make money from the sale price of the ticket (except a small percentage to cover the credit card fees), they only make their service charge as their profit. So 10 tickets at $25 with a $5 handling charge makes them the about same as 10 tickets at $12.50 with a $5 handling charge, right?

Not exactly.

This is where companies like Goldstar are smart and tricky. They know that people like a discount. “Half off” theater tickets have been all the rage ever since the TKTS booth opened in NYC. Goldstar promises their email subscribers that they will offer a special discount that is only available to their subscribers. From the subscriber perspective, this is great! Why would you pay full price when you can get a special half price discount? And who cares if you have to pay a $5 handling charge– you are still saving money! From Goldstar’s perspective this is also great: They get to keep roughly $5 no matter what the ticket is valued at. Since they are selling tickets at a discount, they know they will build customer loyalty and probably sell more tickets down the road.

The free tickets (also known as papering) that we distribute through these companies makes it even better for them.  Now they get to “give away” our product, and charge a fee to do so.  They end up with 100% of the value of that ticket. 

 But what about the producer?

  1. We often end up selling tickets below cost,  or just giving them away, while the ticketing company turns a profit.
  2. We devalue our ticket so that even people willing to pay full price will only pay half price.
  3. We may create word-of-mouth buzz, but we’re actually creating word-of-mouth buzz for half price tickets.
  4. We may sell a few more tickets, but our net monetary gain ends up being negative (10 tickets sold at full price are worth more than 15 sold at half price).
  5. Free tickets distributed through these channels are even worse.  It is not an effective way to paper a house.
  6. We don’t see any of the service fee revenue, even on our “free” tickets; it becomes profit for the ticketing company, while we take a loss.

So why do we sell half price tickets? Should we sell half price tickets? Can we stop? How can we paper discreetly and effectively? And if we must sell half price, how can we turn it into a benefit for the entire community?

In the next four posts, I will break this process down. Here is what I will argue:

Wednesday – When we sell half price tickets in exchange for marketing services, we devalue our theater community as a whole. (Click here to read this post.)

Thursday – We can decrease the number of half price tickets and increase the number of full price tickets if certain conditions are met. (Click here to read this post.)

Friday – We must develop effective papering companies that have specific contracts with their patrons.  Paper patrons must understand their role.  Otherwise they will spread the word that people should try to get free tickets instead of paying. (Click here to read this post.)

Monday – When we do sell half price tickets, we should use our own non-profit ticket site that will turn the profits of service fees into beneficial uses for the theater community. (Here’s lookin’ at you LA Stage…) (Click here to read this post.)

Stay tuned!

To Run, or Not to Run

Posted in Producer's League by Rick Culbertson on September 5, 2009

Ok, my last post talked about how most LA theater rental contracts work. Today, I will talk about how they could work. Warning: this post gets a bit technical.

The most important thing that we, as producers, should be trying to protect is our hit shows. Everyone in the theater community benefits from hits. We all need them to run, whether they are ours or someone else’s. A long running show raises the profile of small theaters, helps word of mouth permeate, and gives group sales people a chance to book tour groups. It provides more stable jobs. It brings more money into the producer’s or theater company’s pocket, enabling them to turn around and produce more shows.
But as I discussed, long running shows are rare in LA because theaters are booking out their spaces before a show even gets a chance to open.

We need to establish open-ended rental contracts, and they must become the norm. Here is an EXAMPLE of how it could work: I, as a producer, would pay a large security deposit to the theater (enough to cover about four weeks of rent): a week for tech, a week for previews, and then opening week, all up front. Then I would make weekly payments out of the box office receipts (which I should be receiving on a weekly basis). This method would continue until I was ready to give two weeks notice. The theater would be able to have a stop clause saying that if, for two consecutive weeks, I fail to make 50% of my running costs, the theater can give me two weeks notice (however, the theater would not be able to invoke this clause until after the 4th week, and certain holiday weeks would also be exempt). In addition, the theater would be able to take a small percentage of box office revenue once the show has recouped or has run at least 26 weeks.

Now let’s plug some LA numbers into this example.

These are totally generic numbers but they are within the LA ballpark for 99 seat theaters.

Weekly Theater Rent = $2,500 (this includes four shows weekly)

So my budget breaks down like this:

Security deposit = $10,000
Tech Week = $3,000
Preview Week = $2,500
Opening Week = $2,500
—————————
Total Adv. = $18,000

As the show runs, if the weekly income is less than 50% of the weekly running costs for two consecutive weeks (after week four), I would probably want to close the show anyway. But if I didn’t want to close and another producer came in with a better show, then the theater could invoke the “stop clause” and give me two weeks notice, in essence forcing me to close. After all, my show had a chance but didn’t really catch on. If I am running at 75% of my costs and I have enough reserve funds to keep it going, however, then I would be able to stay open, and the theater would not be able to invoke the stop clause. If my show catches on, then I have a hit! And I am able to keep extending it without being afraid that the theater will kick me out (unless my revenue dropped for two consecutive weeks below 50% of my costs, in which case I would probably need to close anyway).

I know theater owners will likely say, “We need shows to be scheduled back to back in order to stay in business. In the model above, we will have a lot of dark weeks because producers need 6-12 weeks of lead time to get a new show up after they book our theater.” In response, our Producer’s League could increase the closing notice in the contract to four weeks instead of two. This would allow the theater to start looking for other productions to rent their space once the current production puts up a final closing notice. Of course, the smart theater owner would already have a show waiting in the wings. If not, then theater owners might very well have to tolerate some dark time. But you know what? That’s part of the game of owning a theater. I know that smart theater owners already forecast dark weeks into their budgets.
And at the end of the day, I don’t know why producers should be put in the position of sacrificing our business, in order for theater owners to make money.

Mi Casa es su Casa… (Except that its really Someone Else’s Casa)

Posted in Producer's League by Rick Culbertson on September 3, 2009

So today I am going to talk about what I believe to be the single greatest issue that holds us back as a theater town.  Unions?  Healthcare?  ½ price tickets?  Nope. 

Theater Rental Contracts. 

This is a big issue that will come in two parts.  Part II tomorrow.

But first, an analogy!

Let’s say you need to rent an apartment.  So you look around and you finally find the apartment of your dreams!  But, the landlord wants you to sign a year-long lease, pay for all 12 months up front, and there is a clause that says that at any time prior to or during the duration of your lease, he can rent your apartment to someone else starting on the day your lease ends.  You don’t like this, but you sign the lease and pay for the full year.  

Sure enough, the day after you sign the lease, the landlord comes to you and says, “I have this other guy who wants to rent the apartment when your lease ends and he is also going to pay for a year up front.” Your landlord then gives you two options:  pay for a second year right now, or resign yourself to finding another apartment in a year.

I don’t think anyone would think this was a fair situation.  And yet this is what Los Angeles theater producers have to deal with all the time.  We are constantly losing our theaters to other producers because we can’t afford to pay for two contracts in advance, or realize that it is an unwise decision to rent a theater for 24 weeks guaranteed before we even open our show.

The side effect of this (and I don’t hear a lot of people talk about this), is that production values suffer.  After all, what kind of production values are you going to put into a show when you are forced to close after only 6 weeks? What kind of production values, on the other hand, would you put into a show that you can run as long as you want, as long as you can pay your weekly bills? We, as producers, are in a situation whereby if we put a lot of money into a show in order to make it a high quality production, we will likely guarantee ourselves a loss because we simply can’t make that much money back in six or twelve weeks.  If we put in a low amount of money that can recoup in 6 weeks, however, the show will suffer from a lack of high-quality resources (not to mention salaries).  

We are in a lose-lose situation.  If we had a Producer’s Organization, this entity would be able to negotiate better contracts with theaters by setting minimum requirements for contracts.  It would prevent the theater to rent to someone else before we put up a closing notice.  It will make sure that we are able to accept the rewards for producing high-quality, successful theater– instead of forcing us to close a money-making show before it has recouped.  It short, it could help us get open-ended contracts. Which is what we desperately need.

With real opened-ended contracts, producers would be able to spend more money on production values and marketing.  We would have an incentive to create and develop better shows that run for longer periods of time.  We would also have the incentive to market our shows and build an audience that will support them.  Currently, we have no incentive to do any of this.  My incentive for a 6 or 8-week production is to get it up as cheaply as possible so I can try to at least break even in that small amount of time.

Tomorrow I will outline an example of what a open ended contract could look like  (Click Here).  And in the meantime, leave me a comment!

Lets get down to business!

Posted in Producer's League by Rick Culbertson on September 2, 2009

(you may want to start with my first-first post to learn more about me and why I am starting this blog)

Ok, so my first real post is going to cover the most important issue as I see it: A LOS ANGELES PRODUCERS LEAGUE.  This issue is complex, and can’t be covered in one blog post.  And most of my posts over the next few months will be about specific issues that will, I hope, support the formation of a real Producer’s League.  But since it is the largest of the several large elephants in the room, I thought I would start here and at least give a taste…

 Why do we need a Producer’s League?  Very simple: To give us power.  Right now, we as producers have no power.  Zero.  All of our agreements are promulgated (as opposed to collectively bargained).  Some of you may say, “But there are always meetings about the 99 seat plan to which producers are invited!” While that might be true, we don’t really have a real voice as a group.  And what about the other unions that we pretty much just ignore like USA, or SSDC, or the Musicians Union?  Our current choice is to either accept the union, ignore the union (which forces our talent into having to make a bad decision) or just use non-union talent. And then there are the theater rental contracts– which are, for the most part, not good deals for any of us.

First the unions.  Now, don’t all you hard-core pro-union people jump all over me here, but in LA the unions can basically do whatever they want. I discovered this when I tried to transfer my show to a HAT contract from the 99-seat plan after it ran for 60 performances.  I had many disagreements about what Equity wanted to do, but since I already had union talent in place, my options were limited: I basically had to agree with Equity, or close the show.  (For full disclosure, Equity did relent to me on one of the major issues, when I was in a total bind.  But I wouldn’t have been in a bind if it was all worked out before hand.)

Now, this is not meant to be an anti-union post. I really think that we need unions (I will get to this in a later post), but what I quickly realized was: I was a small, little, first-time producer with a small show… going up against Equity.  I had no bargaining power.  In addition, before I even started rehearsals, I called Equity and asked what I need to prepare for prior to the moment that I went from 99-seat to HAT. In answer to this question, I was told that they wouldn’t deal with that until it happened during my run.  They wouldn’t even tell me what to expect or what it would cost me!  

So, I had zero info from Equity on what I would need to prepare for, and absolutely no producer’s organization to help me.  It was like standing on the moon: desolate, lonely and no one to help. This is not a pleasant situation for a producer, no matter how much experience he/she has.  If we had a Producer’s League, we would be able to negotiate a streamlined process for any show to transfer, thus allowing me and the rest of us to be prepared before we even start raising money. As it was, I was left waiting for answers from Equity just weeks before the transfer, not knowing whether I would even have the money to make the switch.  I had no idea what to expect… and I got burned.

Then there are the other unions.  It seems crazy to me that most of the advice I received about unions other than Equity was basically: “Don’t worry about them.”  To which I responded, “Then why do they exist?” As I learned later, some of these unions will come roaring over the hill the minute you are no longer a 99-seat show.  This is not the best way to work.  Its time for us to bring these additional unions into the fold from the beginning. As I said before, I do think that unions are necessary, but they have to work with us– not against us.  If we had a League in place to protect our bottom line, working together safely with the unions would not be an issue.  This would also create opportunities for artists to work with us without having to work “under the radar.”

And then there are the theater rental contracts. In Los Angeles, theater owners can do whatever they want with their rental agreements. Many theaters in town require that a producer purchases a minimum number of weeks up front, thereafter booking the space you rented to someone else after you– all before you even open your show.  This means that if you have a hit…. too bad! No extensions. You gotta close!

Having a Producer’s League behind us would ensure that we, as producers, can negotiate better contracts.  It becomes very simple:  If theaters don’t want to co-operate, then we just don’t rent them.  With a League, this type of bargaining wields a huge amount of power; without a League, the theater will simply rent to the next guy, offering him the same bad deal you didn’t want to take (more on this issue on my future post about open-ended runs and theaters).

Ok, like I said, there are a ton of issues that expand upon this single broad issue. But these are three major points as to why we should have a Producer’s League.  The how, when, and who… well, that will have to come in future posts.

 Leave me a comment and let me know what you think!

(And don’t forget to sign up on my twitter page!)