I've been having trouble working out how I want to model "reservations".
Part of the problem is, I couldn't really see the use case for it. If what you deal with are paper tickets and you don't have a website and you can't take credit cards, then I can see why you'd want to let someone phone up and make a reservation, and then swing by when convenient and hand over the cash and get the pieces of cardboard. But what are reservations for in a web based system?
The trouble is, the only time reservations matter is if you're going to sell out. If you aren't selling out, then reserving seats doesn't do anything. Well, I suppose that it might mean you get to sit closer to the exact seat that you want, but if you didn't bother making a reservation, then you'd still be able to buy a seat somewhere.
If you do sell out, and someone has an unpaid reservation, then you're probably turning people away. People who have real money that they're prepared to give you now, but which you won't take, because you're promised the seats to someone else who may or may not get round to collecting the reservation.
In some ways, I can look at reservations as being firm orders, that are easy to "refund" (as you've never taken any real money). So I could treat "reserved" seats as being paid for on account, like seats for an agency. You buy the seats on account, and then at some point before the start of the show you either settle the account, or you cancel the tickets and let them go back on sale.
In other ways, reservations are a bit like a really long lived basket. You put a pair of tickets in your shopping basket, so that no one else can get at them, but instead of either checking out there or then, or the basket expiring after the standard 20 minutes, you let the reservations sit there... and then you let someone reconnect to that basket and complete the transaction later on.
Both options seem like a lot of hassle, and I can't see what's in it for the venue to allow it. It's never going to increase sales or revenue, you're just giving the public one more way to annoy you.
But recently, I found the use case that makes sense to me. And it's all about where the seats are, and not getting seats at all. Suppose you're going to the show with your friends: you want a ticket for yourself, you don't want to pay for their tickets, but you do want to be sure that you'll be sitting next to each other. Being able to complete a transaction for yourself, and at the same time reserve the seats for your friends. Or, if it's a GA performance that's selling fast, being able to get your tickets and be sure that your friends will get theirs. And this REALLY adds value when combined with social networking. If the automated post to the Facebook wall doesn't just say "I'm going to see $show" but "I'm going to see $show, the 4 seats next to me are reserved for 12 hours, click here and enter $code to purchase these tickets" strikes me as an acutally useful way of integrating with Facebook and adding more value than timeline spam.
Sunday, 26 February 2012
Friday, 24 February 2012
Going live
The two things I worry most about in an implementation are:
1. Payment Systems
2. Data
There are lots of other things that need to be done - branding the site, writing reports, setting up the database, etc. - but those are all
* More directly under our control
* Capable of temporary stop-gap solutions (if the site design isn't perfect, you can choose to go live with it slightly ugly and have it fixed the next day).
Payment systems are troublesome because some banks and payment gateways require long testing periods before they will activate an account, and there's almost no pressure that one can bring to bear on them that will speed things up at all. Starting the process of getting a Merchant ID from scratch can be slow, and getting the set up correct for Card Present, Mail Order / Telephone Order (MOTO), and eCommerce, all of which have different requirements, can be complicated .
Data is a worry because once you have some sales on the new system, you can't just switch it off and fall back to the old system if anything goes wrong. If the new system knows that seat A15 has been sold and the old one doesn't, and you don't want to do a reverse data conversion from the new system to the old one (which, trust me, you don't), then you're committed.
But there are effectively three states of data in the system. It's all the same data - who bought what - but some of it is "Sales for performances well in advance", where what's important about it is that you don't sell the same seat twice, some of it is "Sales that people are going to collect today", where what's important is that you need to be able to swipe a credit card and retrieve and print an order, and some of it is "Historical Sales", that you are going to use for marketing.
Doing a full overnight conversion means that the next days staff will come into the venue and
* Have to sell advance tickets off a new system - and trust that advance availability is correct
* Have to retrieve and print tickets that were sold on the old system, off the new system
* If anything goes slightly amiss, which it will, deal with customer service and refunds and cancellations on the new system
* Have to deal with all of this in a totally new user interface
which is a lot to deal with no matter how much training there has been, and if a data problem comes to light, say, in the evening whilst tickets are being collected, it's too late to redo the conversion, because the database has that day's sales in it.
Therefore, to mitigate all these risks, I'd prefer to run the two systems side by side, with a cut off date of N months ahread such that performances after that cut off date are in the new system, performances before that date are in the old system. I have seen on many occasions dataconversions that cause an ongoing series of bugs that are never fully resolved, but which eventually "go away" simply because all of the converted performances have happened; it would have been better not to have tried at all.
Running the systems side by side is more effort for staff, because they'll have to switch between systems whilst selling tickets. It's more effort for reporting, because sales will be recorded in two separate systems. It's more effort in the intim period for online sales, because we'll need to show two sets of content on the website. But I think it gives a better result at a lower risk.
So.
First we pick a "cut over date". No more performance get put on sale in the old system that are after the cut over date.
And start talking to the bank about getting an internet merchant id, and talking to payment gateway providers. I will happily integrate with any payment provider, but so far the ones I've found friendliest to deal with are http://www.securetrading.com/
And we start the process of branding and skinning the software so that it fits in with the existing site.
Then we set up the new system with all the performances after the cutover date and test and make sure everything's happy. If this takes longer than expected, the cutover date can be slipped and more performances put on sale in the old system.
Once the internet payment solution is sorted, and the site skinning and branding done, we start selling performances that are after the cutover date on the new system. This should still be about 2 months distant, as you'll have needed to do advance sales on the old system. Therefore, there's plenty of time to sort out any problems with delivery and reporting, as there won't be the emergency of "someone's bought a ticket for a show tomorrow and the email hasn't arrived help!"
During this period, the marketing function in the old system won't have access to sales data for tickets sold in the new system. I hope that's not a showstopper; we can do incremental conversions of historical data for marketing and run marketing off of the new system if we have to.
Eventually, we reach the cut over date. The audience for the first show sold on the new system arrive, present their tickets, and are admitted. The old system can be switched off. The final historical marketing data from the old system can be converted. The new system is entirely live, with no scary crunch conversions and plenty of room for maneuver.
1. Payment Systems
2. Data
There are lots of other things that need to be done - branding the site, writing reports, setting up the database, etc. - but those are all
* More directly under our control
* Capable of temporary stop-gap solutions (if the site design isn't perfect, you can choose to go live with it slightly ugly and have it fixed the next day).
Payment systems are troublesome because some banks and payment gateways require long testing periods before they will activate an account, and there's almost no pressure that one can bring to bear on them that will speed things up at all. Starting the process of getting a Merchant ID from scratch can be slow, and getting the set up correct for Card Present, Mail Order / Telephone Order (MOTO), and eCommerce, all of which have different requirements, can be complicated .
Data is a worry because once you have some sales on the new system, you can't just switch it off and fall back to the old system if anything goes wrong. If the new system knows that seat A15 has been sold and the old one doesn't, and you don't want to do a reverse data conversion from the new system to the old one (which, trust me, you don't), then you're committed.
But there are effectively three states of data in the system. It's all the same data - who bought what - but some of it is "Sales for performances well in advance", where what's important about it is that you don't sell the same seat twice, some of it is "Sales that people are going to collect today", where what's important is that you need to be able to swipe a credit card and retrieve and print an order, and some of it is "Historical Sales", that you are going to use for marketing.
Doing a full overnight conversion means that the next days staff will come into the venue and
* Have to sell advance tickets off a new system - and trust that advance availability is correct
* Have to retrieve and print tickets that were sold on the old system, off the new system
* If anything goes slightly amiss, which it will, deal with customer service and refunds and cancellations on the new system
* Have to deal with all of this in a totally new user interface
which is a lot to deal with no matter how much training there has been, and if a data problem comes to light, say, in the evening whilst tickets are being collected, it's too late to redo the conversion, because the database has that day's sales in it.
Therefore, to mitigate all these risks, I'd prefer to run the two systems side by side, with a cut off date of N months ahread such that performances after that cut off date are in the new system, performances before that date are in the old system. I have seen on many occasions dataconversions that cause an ongoing series of bugs that are never fully resolved, but which eventually "go away" simply because all of the converted performances have happened; it would have been better not to have tried at all.
Running the systems side by side is more effort for staff, because they'll have to switch between systems whilst selling tickets. It's more effort for reporting, because sales will be recorded in two separate systems. It's more effort in the intim period for online sales, because we'll need to show two sets of content on the website. But I think it gives a better result at a lower risk.
So.
First we pick a "cut over date". No more performance get put on sale in the old system that are after the cut over date.
And start talking to the bank about getting an internet merchant id, and talking to payment gateway providers. I will happily integrate with any payment provider, but so far the ones I've found friendliest to deal with are http://www.securetrading.com/
And we start the process of branding and skinning the software so that it fits in with the existing site.
Then we set up the new system with all the performances after the cutover date and test and make sure everything's happy. If this takes longer than expected, the cutover date can be slipped and more performances put on sale in the old system.
Once the internet payment solution is sorted, and the site skinning and branding done, we start selling performances that are after the cutover date on the new system. This should still be about 2 months distant, as you'll have needed to do advance sales on the old system. Therefore, there's plenty of time to sort out any problems with delivery and reporting, as there won't be the emergency of "someone's bought a ticket for a show tomorrow and the email hasn't arrived help!"
During this period, the marketing function in the old system won't have access to sales data for tickets sold in the new system. I hope that's not a showstopper; we can do incremental conversions of historical data for marketing and run marketing off of the new system if we have to.
Eventually, we reach the cut over date. The audience for the first show sold on the new system arrive, present their tickets, and are admitted. The old system can be switched off. The final historical marketing data from the old system can be converted. The new system is entirely live, with no scary crunch conversions and plenty of room for maneuver.
Wednesday, 22 February 2012
Software as a Service
There are two ways to sell box office ticketing software: you charge a license fee, usually based on the number of users or something similar, and then charge an annual support fee on top of that, or you sell it as a service.
I'm selling mine as a service, because I've seen what happens over the lifecycle of a business that sells this sort of enterprise software based on license fees, and I don't believe it's in anyone's interests.
This is largely based on my experience at Artifax Software, but I experienced the tail-end of the same process at Galathea.
You start off getting your first few customers, selling your first few licenses. You get a nice pile of money in the bank, and you start to think, "Hey, this is going to work!". Once your sales pipeline gets moving, you feel like you've got enough of an income stream to start hiring staff.
So you've got a couple of programmers and a few support staff, and you're selling enough licenses to pay the wage bill at the end of the month. The trouble is, the more licenses you sell, the more support staff you're going to need to cover that number of customers. Now, your 15% annual support fee should in theory cover the increase in support staff you need, and the development costs associated with making the next version, but one day you blink, and before you know it you're using your license revenue to keep on paying your support and development staff.
At this point, it's clear that you've got to keep on making more sales in order to support the staffing levels you need to provide your customers with the service they expect. And the more sales you make, the more staff you need. And the more staff you have, the more sales you need.
It gets worse, because the accelerating need for new license sales means you have to start branching out into new markets. Which means more functionality: more developers, more complexity in the code, more bugs, more support staff. Now, every new sale means adding features to the product, not just using the intellectual property you have developed. But you make the sale on a promise of functionality because you need the money, and then you hope to catch up with the development before the next new customer comes along... adding more developers as needed.
What you get at the end of cycle is software that has been stretched to work in too many different markets. Revenue is drying up because you are literally running out of new customers to sell new licenses to. Your reputation for quality is going down because you have half finished functionality left right and centre, and your reputation for support is going down because the software is now hugely complex and you can't pay the support staff you need on the support revenues you're getting.
When I was at Galathea, my 5 biggest problems were a racecourse, a football club, a stadium, a theatre group, and an cultural institution. They all sell tickets, but they all care about totally different things, and none of those things worked properly because they'd all been done in a rush. The racecourse cared about fraud, touts, and access control. The football club cared about season ticket renewals. The theatre group cared about selling huge volumes of seated tickets at a steady rate. The stadium cared about selling huge volumes of general admission tickets in 30 minutes flat. And the cultural institution cared about memberships and the way that membership perks interacted with every other aspect of the system.
Software as a Service may look more expensive in the long run: if you add up all those per ticket fees over 5 years, it might be less that some up-front-licenses, support fees, and a couple of servers. But the SaaS business model means that your supplier isn't going to be panicked into making unwise sales and rushed development, and it means they're going to care as much about keeping you on board in 5 years time as they are the day you sign on the bottom line. Which is what everyone wants.
I'm selling mine as a service, because I've seen what happens over the lifecycle of a business that sells this sort of enterprise software based on license fees, and I don't believe it's in anyone's interests.
This is largely based on my experience at Artifax Software, but I experienced the tail-end of the same process at Galathea.
You start off getting your first few customers, selling your first few licenses. You get a nice pile of money in the bank, and you start to think, "Hey, this is going to work!". Once your sales pipeline gets moving, you feel like you've got enough of an income stream to start hiring staff.
So you've got a couple of programmers and a few support staff, and you're selling enough licenses to pay the wage bill at the end of the month. The trouble is, the more licenses you sell, the more support staff you're going to need to cover that number of customers. Now, your 15% annual support fee should in theory cover the increase in support staff you need, and the development costs associated with making the next version, but one day you blink, and before you know it you're using your license revenue to keep on paying your support and development staff.
At this point, it's clear that you've got to keep on making more sales in order to support the staffing levels you need to provide your customers with the service they expect. And the more sales you make, the more staff you need. And the more staff you have, the more sales you need.
It gets worse, because the accelerating need for new license sales means you have to start branching out into new markets. Which means more functionality: more developers, more complexity in the code, more bugs, more support staff. Now, every new sale means adding features to the product, not just using the intellectual property you have developed. But you make the sale on a promise of functionality because you need the money, and then you hope to catch up with the development before the next new customer comes along... adding more developers as needed.
What you get at the end of cycle is software that has been stretched to work in too many different markets. Revenue is drying up because you are literally running out of new customers to sell new licenses to. Your reputation for quality is going down because you have half finished functionality left right and centre, and your reputation for support is going down because the software is now hugely complex and you can't pay the support staff you need on the support revenues you're getting.
When I was at Galathea, my 5 biggest problems were a racecourse, a football club, a stadium, a theatre group, and an cultural institution. They all sell tickets, but they all care about totally different things, and none of those things worked properly because they'd all been done in a rush. The racecourse cared about fraud, touts, and access control. The football club cared about season ticket renewals. The theatre group cared about selling huge volumes of seated tickets at a steady rate. The stadium cared about selling huge volumes of general admission tickets in 30 minutes flat. And the cultural institution cared about memberships and the way that membership perks interacted with every other aspect of the system.
Software as a Service may look more expensive in the long run: if you add up all those per ticket fees over 5 years, it might be less that some up-front-licenses, support fees, and a couple of servers. But the SaaS business model means that your supplier isn't going to be panicked into making unwise sales and rushed development, and it means they're going to care as much about keeping you on board in 5 years time as they are the day you sign on the bottom line. Which is what everyone wants.
Thursday, 2 February 2012
Monday, 28 November 2011
First come first served
Is the natural, normal way of selling tickets: as fast as you can, until there are none left.
But when the demand is very much higher than supply, and everyone knows it, everyone's worried there will be none left, so try to secure tickets as soon as possible. The Principal of Scarcity - "we want what we’re afraid we can’t have" - means that the risk of not being able to get tickets when we do want them turns into an even stronger desire to get tickets in the first place. Everyone hits the websites and phones the second they are open, servers start to melt, and hilarity ensues.
This is especially awkward when the event in question is publicly funded, or for other reasons the limited stock of tickets must be seen to be allocated "fairly"; one's ability to get to the computer and press F5 repeatedly at the crucial moment is not a particularly fair measure on which to allocate tickets.
Dynamically raising ticket prices based on speed of demand might blunt this inital surge, but is still basically FCFS.
Selling tickets at auction can work. I've mostly seen it done for certain charity events, where the point is to show off how rich and generous you are by bidding way over the top for tickets, of course in the name of a good cause. When TicketMaster put a large proportion of its allocation for a some concerts directly on its aftermarket auction site TicketsNow without first offering them to the public at face value, people were understandably upset: a Class Action lawsuit, (recently settled, it appears) was the result. But if the event promoter deliberately chose to auction the tickets in the first place then there would be much less to get cross about.
The other option is the ticket ballot or lottery. Glastonbury Festival's adoption of the ticket ballot has changed the annual scrum of ticket buying panic into a much more orderly affair. Registering in ones own time means the systems are not overloaded, and being able to batch-process the orders also means that the credit card authorisation service, often a bottleneck for large onsales, is no longer a problem: having selected the winning applications from the ballot, the authorisation no longer has to be done in real time.
A brilliant example of how to completely cock this up is the 2012 London Olympics. Because the tickets are divided between all of the different events, each drawn from the ballot separately, the ballot does not diffuse the innate human psychological timebomb that is the principal of scarcity. Rather than putting their name down for only the events they wanted, and waiting patiently for the ballot as with a Glastonbury ticket, many people wanting tickets - or, more accurately, worried that they wouldn't get tickets - applied indiscriminately for everything. I was told an anecdote last night about a couple who applied for £10,000 worth of tickets, and who then got "lucky" (or unlucky) in the ballot, and who now find themselves obliged to attend a large number of Olympic Figure Skating Quarter Finals and the like, tickets with a face value of £5,000, and no opportunity to either resell them or return them to the box office. In this case the natural response of someone trying to maximise their chances of getting a ticket for something worked very much at odds with the process, and I expect the Olympic audience is going to be largely comprised of people who really wanted tickets for something else, aren't very interested in the event, but have shown up because they've had to pay for the tickets anyway and don't want to "waste" the money.
A simple fix would have been to offer Olympic Ticket buyers a list of events in order of preference, and if their number came up, they would get tickets for the top not-sold-out event on their list. That way, they'd be buying a predictable number of tickets rather than a potentially large liability, for events that they actually wanted to see.
An innovative use of the ballot - and one which worked well, though I've not seen it used since - was the Live 8 concert. Wikipedia says:
Although the concerts were free, 66,500 pairs of tickets for the Hyde Park concert were allocated from 13 to 15 June 2005, to winners of a mobile phone text message competition that began on Monday, 6 June 2005. Entry involved sending the answer to a multiple choice question via a text message costing £1.50. Winners were drawn at random from those correctly answering the question. Over two million messages were sent during the competition, raising £3m. Thus entrants had a roughly one-in-28 chance of winning a pair of tickets.
That works out at £45 raised per ticket, quite a reasonable selling price. What's nice about this approach is that
1. You're raising money from all the people interested in tickets, not just the ticket buyers. This is nice because a lot of the costs of provisioning web servers and call centres are proportional to the number of people interested in tickets, and not the number sold. If Madonna decided to play the Barfly, then you'd still get a million people on the website, even though there were only a hundred tickets available.
2. People know what they're buying - a chance at a ticket, not an actual ticket - and can spend exactly as much as they want to.
3. People not prepared to spend a lot still have a chance at a ticket. You could have just sent one text message for the Live 8 tickets, and hoped you got lucky, and if you did you'd get a pair of tickets for a bargain £1.50. So poorer people are not excluded.
4. People prepared to spend a lot can still do so. If you really wanted tickets and you'd spent £45 on text messages, you'd have a pretty good chance of getting in. So richer people can still hand over more of their cash.
But when the demand is very much higher than supply, and everyone knows it, everyone's worried there will be none left, so try to secure tickets as soon as possible. The Principal of Scarcity - "we want what we’re afraid we can’t have" - means that the risk of not being able to get tickets when we do want them turns into an even stronger desire to get tickets in the first place. Everyone hits the websites and phones the second they are open, servers start to melt, and hilarity ensues.
This is especially awkward when the event in question is publicly funded, or for other reasons the limited stock of tickets must be seen to be allocated "fairly"; one's ability to get to the computer and press F5 repeatedly at the crucial moment is not a particularly fair measure on which to allocate tickets.
Dynamically raising ticket prices based on speed of demand might blunt this inital surge, but is still basically FCFS.
Selling tickets at auction can work. I've mostly seen it done for certain charity events, where the point is to show off how rich and generous you are by bidding way over the top for tickets, of course in the name of a good cause. When TicketMaster put a large proportion of its allocation for a some concerts directly on its aftermarket auction site TicketsNow without first offering them to the public at face value, people were understandably upset: a Class Action lawsuit, (recently settled, it appears) was the result. But if the event promoter deliberately chose to auction the tickets in the first place then there would be much less to get cross about.
The other option is the ticket ballot or lottery. Glastonbury Festival's adoption of the ticket ballot has changed the annual scrum of ticket buying panic into a much more orderly affair. Registering in ones own time means the systems are not overloaded, and being able to batch-process the orders also means that the credit card authorisation service, often a bottleneck for large onsales, is no longer a problem: having selected the winning applications from the ballot, the authorisation no longer has to be done in real time.
A brilliant example of how to completely cock this up is the 2012 London Olympics. Because the tickets are divided between all of the different events, each drawn from the ballot separately, the ballot does not diffuse the innate human psychological timebomb that is the principal of scarcity. Rather than putting their name down for only the events they wanted, and waiting patiently for the ballot as with a Glastonbury ticket, many people wanting tickets - or, more accurately, worried that they wouldn't get tickets - applied indiscriminately for everything. I was told an anecdote last night about a couple who applied for £10,000 worth of tickets, and who then got "lucky" (or unlucky) in the ballot, and who now find themselves obliged to attend a large number of Olympic Figure Skating Quarter Finals and the like, tickets with a face value of £5,000, and no opportunity to either resell them or return them to the box office. In this case the natural response of someone trying to maximise their chances of getting a ticket for something worked very much at odds with the process, and I expect the Olympic audience is going to be largely comprised of people who really wanted tickets for something else, aren't very interested in the event, but have shown up because they've had to pay for the tickets anyway and don't want to "waste" the money.
A simple fix would have been to offer Olympic Ticket buyers a list of events in order of preference, and if their number came up, they would get tickets for the top not-sold-out event on their list. That way, they'd be buying a predictable number of tickets rather than a potentially large liability, for events that they actually wanted to see.
An innovative use of the ballot - and one which worked well, though I've not seen it used since - was the Live 8 concert. Wikipedia says:
Although the concerts were free, 66,500 pairs of tickets for the Hyde Park concert were allocated from 13 to 15 June 2005, to winners of a mobile phone text message competition that began on Monday, 6 June 2005. Entry involved sending the answer to a multiple choice question via a text message costing £1.50. Winners were drawn at random from those correctly answering the question. Over two million messages were sent during the competition, raising £3m. Thus entrants had a roughly one-in-28 chance of winning a pair of tickets.
That works out at £45 raised per ticket, quite a reasonable selling price. What's nice about this approach is that
1. You're raising money from all the people interested in tickets, not just the ticket buyers. This is nice because a lot of the costs of provisioning web servers and call centres are proportional to the number of people interested in tickets, and not the number sold. If Madonna decided to play the Barfly, then you'd still get a million people on the website, even though there were only a hundred tickets available.
2. People know what they're buying - a chance at a ticket, not an actual ticket - and can spend exactly as much as they want to.
3. People not prepared to spend a lot still have a chance at a ticket. You could have just sent one text message for the Live 8 tickets, and hoped you got lucky, and if you did you'd get a pair of tickets for a bargain £1.50. So poorer people are not excluded.
4. People prepared to spend a lot can still do so. If you really wanted tickets and you'd spent £45 on text messages, you'd have a pretty good chance of getting in. So richer people can still hand over more of their cash.
Tuesday, 15 November 2011
Accessibility
By which I mean "getting people who don't normally go to the theatre* to go to the theatre", and not "compliance with the W3C's AA standard". Audience Development, in other words.
* Please replace "Theatre" with your art form of choice: Gig, concert, ballet, mime, opera, site specific devised physical community installation, etc.
Also, this is more opinion-y than analytical. And they aren't very rigorous opinions, and I'll make some sweeping generalisations which will certainly be wrong in some respect.
My starting point is a set of feelings and opinions that I believe many of my friends and people like them share:
* That theatre (slash "your art form of choice", I'll stop doing that now) is important and that if more people went to the theatre the world would be a better place.
* That not enough people go to the theatre
* That theatre is not and should not be for the posh people only
* That £10 tickets to the national theatre will somehow help this
* That they, as impoverished theatre makers, who need no encouragement to go to the theatre but aren't rolling in cash, are particularly keen on the £10 tickets and take advantage of them as much as possible, is pure coincidence
In short, that discount or subsidised cheap theatre tickets are important because they broaden the reach of the audience, conveniently ignoring the fact that discount or subsidised theatre tickets are mostly bought by people like them, who are very much in the choir (which is, in some sense, and this metaphor is horribly mangled, being preached to).
I think that access to the theatre is almost nothing to do with ticket prices, and therefore that allowing ticket prices for popular or sold out shows to float to their real market value, allowing promoters and venues and performers to make as much money out of them as they can, would not have undesirable side effects of making the art form intrinsically elitist. It's quite easy to find indisputably non-elitist art forms (let's pick on the X-Factor live, for example. Or football in general) that have ticket prices that seem to me to be massively out of proportion to the value of the performance, that sell very well indeed.
All of the people that I know who love theatre do so because they've been involved in making it. Whether they are now still working as actors or directors or lighting designers or critics, or have got other jobs and spend money on tickets, or have even gone to the trouble of sinking a couple of years of their lives into writing a new box office ticketing system from scratch (Monad Ticketing, thanks for asking), it starts with getting involved, not with cheap tickets.
So the subsidy - and selling a ticket you know you could get £50 for for a tenner is a subsidy, no matter where the money comes from, is in the wrong place. Instead, it should be going into making it easier to put on a show, less of a risk to put on your own little fringe thing whether or not you've been to drama school, cheaper to rent a space above a pub and try it out.
Therefore:
* Audience development is best served by subsiding the costs of putting on a show, not by subsidising ticket prices.
* Popular shows should implement dynamic pricing in order to make as much money as possible, and if this means that no tickets for popular shows are available in the lower price bands at all, that's not a problem.
* Unpopular shows should implement dynamic pricing in order to make as much money as possible, even if the last few seats are filled for next to nothing, because there is a certain price point at which people will go "well, we might as well see what it's like"
* Please replace "Theatre" with your art form of choice: Gig, concert, ballet, mime, opera, site specific devised physical community installation, etc.
Also, this is more opinion-y than analytical. And they aren't very rigorous opinions, and I'll make some sweeping generalisations which will certainly be wrong in some respect.
My starting point is a set of feelings and opinions that I believe many of my friends and people like them share:
* That theatre (slash "your art form of choice", I'll stop doing that now) is important and that if more people went to the theatre the world would be a better place.
* That not enough people go to the theatre
* That theatre is not and should not be for the posh people only
* That £10 tickets to the national theatre will somehow help this
* That they, as impoverished theatre makers, who need no encouragement to go to the theatre but aren't rolling in cash, are particularly keen on the £10 tickets and take advantage of them as much as possible, is pure coincidence
In short, that discount or subsidised cheap theatre tickets are important because they broaden the reach of the audience, conveniently ignoring the fact that discount or subsidised theatre tickets are mostly bought by people like them, who are very much in the choir (which is, in some sense, and this metaphor is horribly mangled, being preached to).
I think that access to the theatre is almost nothing to do with ticket prices, and therefore that allowing ticket prices for popular or sold out shows to float to their real market value, allowing promoters and venues and performers to make as much money out of them as they can, would not have undesirable side effects of making the art form intrinsically elitist. It's quite easy to find indisputably non-elitist art forms (let's pick on the X-Factor live, for example. Or football in general) that have ticket prices that seem to me to be massively out of proportion to the value of the performance, that sell very well indeed.
All of the people that I know who love theatre do so because they've been involved in making it. Whether they are now still working as actors or directors or lighting designers or critics, or have got other jobs and spend money on tickets, or have even gone to the trouble of sinking a couple of years of their lives into writing a new box office ticketing system from scratch (Monad Ticketing, thanks for asking), it starts with getting involved, not with cheap tickets.
So the subsidy - and selling a ticket you know you could get £50 for for a tenner is a subsidy, no matter where the money comes from, is in the wrong place. Instead, it should be going into making it easier to put on a show, less of a risk to put on your own little fringe thing whether or not you've been to drama school, cheaper to rent a space above a pub and try it out.
Therefore:
* Audience development is best served by subsiding the costs of putting on a show, not by subsidising ticket prices.
* Popular shows should implement dynamic pricing in order to make as much money as possible, and if this means that no tickets for popular shows are available in the lower price bands at all, that's not a problem.
* Unpopular shows should implement dynamic pricing in order to make as much money as possible, even if the last few seats are filled for next to nothing, because there is a certain price point at which people will go "well, we might as well see what it's like"
Tuesday, 8 November 2011
Dynamic Pricing
To recap:
Some shows sell out. This is lovely, but also difficult because in anticipation of this people rush to the phones and the website as soon as tickets go on sale, servers crash, phones melt, agencies fight to take allocations that they can then make guaranteed money from, touts buy tickets in advance and sell them on ebay, other touts buy tickets outside the venue and resell them and make the place look untidy.
Some shows don't sell out. This is a shame, because whatever the size of venue and level of performance, people put a lot of work into making things, and it would be nice if people came to watch. Also, every empty seat in the house is a missed opportunity; it would be better to sell it 50p than have it go empty, and even if you gave it away free the venue would still make money on drinks.
So here are the pair of statements guaranteed to annoy my friends who work in the arts:
1. Any show that sold out well in advance was too cheap.
2. Any show that did not sell out was too expensive.
For ticket in demand:
Firstly, all of the issues with the "aftermarket", as it is know (touts and fraud) come about because the venue or promoter is selling tickets for less than they are worth.
If Mr Punter really really wants to see a particular gig, or show, and is prepared to spend £100 on a ticket, when they were on sale from the box office at £50, and manages to acquire those tickets from a tout, then there is £50 that could have gone to the venue or the promoter or the performers - that instead has gone to a middleman whose only contribution was to join in with everyone else rushing the box office the minute the tickets went on sale. If those tickets had been on sale at a higher price, then fewer people would have wanted them, the on sale would have been slower, there might have been some left by the time that Mr Punter got out of bed, there would have been a smaller margin for Mr Tout to skim money from, and the venue/promoter/performers would have made more money. These are uniformly good outcomes.
For tickets with ample supply:
As Easyjet realised quite some time ago now, every unsold seat is a waste. You're putting the show on anyway, and if there are seats unsold 10 minutes before the curtain up, then you might as well sell them at any price as not. If, by dropping the last minute price from £10 to £5 or even 50p, you get one more person in, then that's a good outcome: more revenue, more audience, more bar take.
The objections
that I'm used to hearing, and expect to hear again, are:
1. Allowing prices to float to their market value would stop poor people from ever being able to go to the theater; or at least, good or popular theatre.
2. People who discover that the person in the neighbouring seat has paid dramatically less than them get cross and go and have a shout at box office staff and try and get some money back.
3. Letting some seats go very cheaply devalues the other tickets, and people start expecting them all to be that cheap.
Now, objection 1 is going to need a whole blog post of its own, on "Accessibility". The short response is that ticket price is the least of the barriers holding back the people that performing arts currently don't reach. The availability of cheap seats for some opera is not going to widen its audience; it just means that existing opera lovers buy up all the cheap seats first to save money. For cheap seats to make a difference, they need to be available as an impulse buy, because you might as well, and this isn't a possibility for a sold out show.
Objection 2 can be dealt with by observing that what you are paying for is not just the ticket; it is the certainty of having bought the ticket. If you are planning to take your wife to Phantom because you have taken her there every year of your married life, then you are going to buy that ticket as soon as it goes on sale and not run any risk of it selling out, and that is worth the difference to you. You wouldn't show up at TKTS on the night hoping for a half price ticket, because it would be devastating if there wasn't one. If ticket prices went up and down like airline fares, then the price you paid at the exact point in time you bought it was the right price for you, based on your need for definitely having a ticket, the risk that tickets might sell out, the risk that prices might go up, and the possibility that prices might indeed go down. Paying £50 for a ticket that someone else got for £10 does not mean you have been ripped off; it means that you valued knowing that you would have a ticket above turning up at the last minute and not being sure that you had one.
Objection 3 is the inverse of objection 1; instead of "Tickets would be too expensive", "Tickets would be too cheap". Certainly, someone who dedicated themselves to seeing lots of fringe shows picked at the last minute would not pay very much, and might start to regard a reliable west end spectacular as a waste of money. If they saw 50 fringe shows for the same price as one west end musical, they might well see 49 terrible wastes of time... and one amazing, magical, undiscovered gem more than good enough to make up for the rest. That's been my experience with fringe theatre, at least, and I'd heartily recommend it. Being able to take a chance on a random show because it costs less than a pint or two is qualitatively different from subsidised cheapseats at a big, expensive, popular sold out show.
So, I will argue that ideally, the last ticket to the show will be sold at the last minute before the doors open, having been selling slowly and steadily since the moment they went on sale.
If tickets sell at such a rate that they will sell out weeks before the performance starts, then the prices could be raised, sales would be slower, the box office would have to deal with less of a spike, and more money would be raised, increasing revenue to the arts.
If tickets sell so slowly that the house is only a quarter full, then prices could be lowered, sales accelerated, more people would go on spec, the audience would be larger and have more fun, the bar would sell more drinks, and again, more revenue into the arts.
An effective dynamic pricing module would, therefore, look at the rate of sale per day (or per hour, or per minute, for more sensitivity but adjusted for time of day), and estimate the date and time that all the tickets will sell out. If that is before the performance start, edge the prices up; if it's after, nudge them down.
An exploration of why dynamic pricing hasn't happened to theatre, rock and pop, and other performing arts, when it was implemented across, e.g. the airline industry 10 years ago, to follow in a later post...
Some shows sell out. This is lovely, but also difficult because in anticipation of this people rush to the phones and the website as soon as tickets go on sale, servers crash, phones melt, agencies fight to take allocations that they can then make guaranteed money from, touts buy tickets in advance and sell them on ebay, other touts buy tickets outside the venue and resell them and make the place look untidy.
Some shows don't sell out. This is a shame, because whatever the size of venue and level of performance, people put a lot of work into making things, and it would be nice if people came to watch. Also, every empty seat in the house is a missed opportunity; it would be better to sell it 50p than have it go empty, and even if you gave it away free the venue would still make money on drinks.
So here are the pair of statements guaranteed to annoy my friends who work in the arts:
1. Any show that sold out well in advance was too cheap.
2. Any show that did not sell out was too expensive.
For ticket in demand:
Firstly, all of the issues with the "aftermarket", as it is know (touts and fraud) come about because the venue or promoter is selling tickets for less than they are worth.
If Mr Punter really really wants to see a particular gig, or show, and is prepared to spend £100 on a ticket, when they were on sale from the box office at £50, and manages to acquire those tickets from a tout, then there is £50 that could have gone to the venue or the promoter or the performers - that instead has gone to a middleman whose only contribution was to join in with everyone else rushing the box office the minute the tickets went on sale. If those tickets had been on sale at a higher price, then fewer people would have wanted them, the on sale would have been slower, there might have been some left by the time that Mr Punter got out of bed, there would have been a smaller margin for Mr Tout to skim money from, and the venue/promoter/performers would have made more money. These are uniformly good outcomes.
For tickets with ample supply:
As Easyjet realised quite some time ago now, every unsold seat is a waste. You're putting the show on anyway, and if there are seats unsold 10 minutes before the curtain up, then you might as well sell them at any price as not. If, by dropping the last minute price from £10 to £5 or even 50p, you get one more person in, then that's a good outcome: more revenue, more audience, more bar take.
The objections
that I'm used to hearing, and expect to hear again, are:
1. Allowing prices to float to their market value would stop poor people from ever being able to go to the theater; or at least, good or popular theatre.
2. People who discover that the person in the neighbouring seat has paid dramatically less than them get cross and go and have a shout at box office staff and try and get some money back.
3. Letting some seats go very cheaply devalues the other tickets, and people start expecting them all to be that cheap.
Now, objection 1 is going to need a whole blog post of its own, on "Accessibility". The short response is that ticket price is the least of the barriers holding back the people that performing arts currently don't reach. The availability of cheap seats for some opera is not going to widen its audience; it just means that existing opera lovers buy up all the cheap seats first to save money. For cheap seats to make a difference, they need to be available as an impulse buy, because you might as well, and this isn't a possibility for a sold out show.
Objection 2 can be dealt with by observing that what you are paying for is not just the ticket; it is the certainty of having bought the ticket. If you are planning to take your wife to Phantom because you have taken her there every year of your married life, then you are going to buy that ticket as soon as it goes on sale and not run any risk of it selling out, and that is worth the difference to you. You wouldn't show up at TKTS on the night hoping for a half price ticket, because it would be devastating if there wasn't one. If ticket prices went up and down like airline fares, then the price you paid at the exact point in time you bought it was the right price for you, based on your need for definitely having a ticket, the risk that tickets might sell out, the risk that prices might go up, and the possibility that prices might indeed go down. Paying £50 for a ticket that someone else got for £10 does not mean you have been ripped off; it means that you valued knowing that you would have a ticket above turning up at the last minute and not being sure that you had one.
Objection 3 is the inverse of objection 1; instead of "Tickets would be too expensive", "Tickets would be too cheap". Certainly, someone who dedicated themselves to seeing lots of fringe shows picked at the last minute would not pay very much, and might start to regard a reliable west end spectacular as a waste of money. If they saw 50 fringe shows for the same price as one west end musical, they might well see 49 terrible wastes of time... and one amazing, magical, undiscovered gem more than good enough to make up for the rest. That's been my experience with fringe theatre, at least, and I'd heartily recommend it. Being able to take a chance on a random show because it costs less than a pint or two is qualitatively different from subsidised cheapseats at a big, expensive, popular sold out show.
So, I will argue that ideally, the last ticket to the show will be sold at the last minute before the doors open, having been selling slowly and steadily since the moment they went on sale.
If tickets sell at such a rate that they will sell out weeks before the performance starts, then the prices could be raised, sales would be slower, the box office would have to deal with less of a spike, and more money would be raised, increasing revenue to the arts.
If tickets sell so slowly that the house is only a quarter full, then prices could be lowered, sales accelerated, more people would go on spec, the audience would be larger and have more fun, the bar would sell more drinks, and again, more revenue into the arts.
An effective dynamic pricing module would, therefore, look at the rate of sale per day (or per hour, or per minute, for more sensitivity but adjusted for time of day), and estimate the date and time that all the tickets will sell out. If that is before the performance start, edge the prices up; if it's after, nudge them down.
An exploration of why dynamic pricing hasn't happened to theatre, rock and pop, and other performing arts, when it was implemented across, e.g. the airline industry 10 years ago, to follow in a later post...
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