Thoughts from a Los Angeles Theater Producer

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!

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