All Rise
Ah subscription, the seldom lauded, oft derided pillar of revenue for ticketing businesses. The present sentiment, especially about fixed-seat subscription, is that it was good enough to get us here, but it’s well past time to move on. Move on to what exactly, you ask? Well, first we need to find out if it truly is time to move on. Allow us to try and present the arguments on both sides of the subscription debate, and you be the judge.
The Plaintiff Takes the Stand
Plaintiff- Your honor, the simple fact is that fixed-seat subscription doesn’t work in today’s fast-paced world. It takes too much time to administer, often requires a large payment up front, and it results in disproportionate audience segments. How can we succeed in our diversity goals and have an audience representative of our community this way? Finally, we field way too many complaints about it, and our audiences have too many opinions about the program selection every year. For these reasons, subscription can no longer be the way forward; I rest my case.
Subscription is not a completely unalloyed good, especially with the limitations most organizations have in terms of technology. A subscription experience with a live performance venue and a subscription experience with something like Netflix are so different they almost need to be called different things. Unlike streaming services, live performance venues are bound by the complexity of tickets representing physical seats and can’t offer 24-hour on-demand entertainment. A subscription to something like Xbox Live costs $9.99/month, usually the first month is only $1 and if your bank account or card payment can’t pay, they just end your subscription, no fees, no questions asked, and you can restart it again later without ever picking up your phone to call someone. Low risk, no penalty, simple and easy to start and stop. Comparing that to calling up the theatre, paying the full subscription cost upfront for shows you may have never heard of, on future dates you aren’t sure you’re free, for seats you may or may not want to be locked into, is just a different sort of thing.
The undesirable complexities that come with live performance subscription models are noted in the plaintiff’s argument above. There are demographics of patrons that are simply more suited to the offering of a subscription package and the ways they are currently being sold. Subscriptions serve a patron with a relatively higher amount of discretionary funds who can spend a large sum of money at one time on future entertainment and has enough control of their time and schedule to be at the venue on the firm performance dates. As a result, venues selling subscriptions have commonly experienced noticeably homogenous audiences amongst their subscribers. This raises concerns among arts professionals and funders about other demographics being left out, leading them to question if they are serving an audience that fully reflects the community. This is especially troubling when they consider the consequences of only serving an aging audience that is going to possibly be no longer a demographic of majority in the United States as early as 2044 by some studies. The commonly held feeling arts leaders have is that performance art must connect with a wider, younger, more diverse audience not only for the sake of stated organizational values, but also simply to survive as institutions.
US Census Bureau
Also at issue is the management aspect of subscriptions. Managing fixed-seat subscription is a resource heavy endeavor. Every time a patron calls to change seats, to ask about bringing a guest, to switch a show, or to give you a piece of their mind about programming, the cost of that subscription capital rises. It is easy to look at the technical and usage limitations for the patrons, the demographic outcomes, and the management efforts attendant on subscriptions and say, “enough, this isn’t serving us anymore.” The only problem is that the subscription model is still serving you. Keep reading.
The Defense Takes the Stand
Judge- These are very serious accusations. How does the defense plead?
Defense- Your honor, I plead RFMG.
Judge- I’m sorry, what?
Defense- Recency, frequency, monetary investment, and growth. Look at the evidence, you’ll find that’s what I’m guilty of.
Your organization is seeking to improve upon four things in order to finally recover: the recency of attendance, the frequency of attendance, the amount of monetary investment, and the growth of these behaviors in the patrons within your database. Those four goals pretty much cover the responsibilities of every person employed by your institution, and subscription is the product you sell that does all of that at once. The rumors of subscription’s demise are greatly exaggerated as well, 50% of TRG clients have seen subscription growth since the pandemic, not just growth but significant growth of 40% in subscription units since the 2020-21 season. Yes, the totals are still below pre-pandemic levels but organizations that are committed to the tactic of subscriptions to increase RFMG are seeing growth.
The consequences of forsaking subscription altogether must also be considered. In 2020 The National Endowment for the Arts published data from the Bureau of Economic Analysis reporting arts and culture as a market contributed $877.8 billion dollars or 4.5% of the 2017 United Stated gross domestic product (GDP). To get an idea of how much of that money came from subscriptions, 2021 data from Americans for the Arts showed 60% of funding for nonprofit arts organizations comes from earned revenue, which is either single tickets or some version of a loyalty program like subscription. Every organization is different in terms of revenue streams, but if subscriptions disappeared, that would be a lot of ticket sales to cover without a clear way to incentivize multi-buyers and RFMG behaviors.
Losing subscription altogether could also have creative consequences for the sector. In 2013, The Wall Street Journal produced an article called Theater's Expiring Subscription Model. Ten years ago, the author was already declaring that subscription was collapsed and suggested it might have been “always a snare and a delusion, an easy-money honeypot that seduced growth-happy companies into losing sight of their artistic missions.” However, that same article paraphrases a conversation with an “anonymous but notable” artistic director, who recognized what losing subscription revenue was doing to the product on stage. “Then the subscription model fell apart, for a lot of reasons. Some subscribers got too busy, or too old to commit in advance to five shows on specific dates. Some of them couldn't afford to buy all five in one pop anymore, and young people never have gotten in the habit of subscribing to anything. On demand, that's their motto. Anyway, it all added up to the same thing: We had to start selling individual shows instead of a package. When that happened, everything changed. Instead of trusting us to give them something good, people started playing it safe, and we had to play safe with them. We didn't have any choice.”
The charge that subscription inhibits equitable access is largely built on two things, neither of which are data. The first is that to our eyes, it appears that our halls are full of one demographic, and it is easy to assume the causal reason for this is the product. The second is a general assumption that price is a major barrier for young or more diverse audiences who otherwise would want to attend. These assumptions are addressed in Colleen Dilenschneider’s article Does Free Admission Result in More Diverse Audiences? A Pandemic Informed Update. The data shows that lowering or removing prices altogether does not result in a more diverse audience, “removing admission does not by itself alleviate perceptual cultural or experiential barriers. If someone doesn’t believe that an art museum is ‘for people like me,’ then it may not matter if that organization offers free admission.” The unexpected truth is that removing or discounting subscriptions will not automatically make your organization a more welcoming place. Without subscription’s aid in building recency of attendance, frequency of attendance, audience monetary investment, and growth of those behaviors, you will be more stuck creatively and likely still not reflective enough of your community, even with lower price barriers.
The Deliberation
Things are complicated, it is entirely possible for subscriptions, like many things, to have both positive and negative real-life outcomes. To really understand a thing is to realize there are applications of use for it, and perhaps applications of misuse. Some variation of “Subscription is Dead” has perhaps been a somewhat welcomed headline as an excuse for the fiscal and equity challenges the sector is facing. It’s not hard to find opinions going back a decade or more about why subscription models and the arts should break up. What would be more useful than constantly questioning the viability of subscription is examining data, not anec-data, to find loyalty models and other products that are suited for the limitations of live performance and the equity goals of our organizations.
The Verdict
So, at TRG Arts, we believe that subscription models, including fixed-seat, are among the many viable tactics to build RFMG and provide stabilizing revenue, but the verdict is yours to make. Is there still a role for subscription to play in the business models of your arts and cultural organization, or are you looking to phase it out entirely? We invite you to join the conversation by repost this article and tagging TRG Arts on LinkedIn with your thoughts.