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An example from the past season, the marketing of Satyagraha, illustrates how inspired marketing can work. Philip Glass's work is, for many, an acquired taste. If you add to that hurdle the fact that the Satyagraha libretto is written entirely in Sanskrit and that Met Titles are not used during the performance, it provides a marketing challenge of the highest level.

As the 2007-08 season began, here's what happened: Seven performances of Satyagraha was scheduled for the spring of 2008. Many subscribers who found Satyagraha included in their series decided to opt out of the Glass opera -- they traded in their seats for other operas. And single-ticker buyers turned out to be equally cool to the prospect of watching a Sanskrit work. Normally, as a season progresses, single-ticket sales start out filling up the house. But a funny thing happened in this case. The forecasted box office of Satyagraha started declining, and at an alarming rate. The more time that passed, the worse the box office ahead looked. If this continued, there was a chance the opera would play to near-empty houses.

So a marketing task force was put together. For a modest budget, aided by contributions from a board member, the team was able to create dozens of different marketing initiatives designed to attract specialized audiences. New-age magazines yoga groups, anti-apartheid organizations, India groups, South African organizations, et al.

It worked. By the end of its run, Satyagraha had sold out its run. (By the way, it was a terrific production. I like to quip that Satyagraha is now my favorite Sanskrit opera.) Next year, the same team will have an opportunity to apply its narrow-focus marketing techniques to selling the John Adams opera, Doctor Atomic -- a contemporary work about the creation of the atomic bomb.

(3) New Sources of Revenues -- HD Telecasts

The final and most exciting major initiative began two years ago -- live high-definition telecasts to theaters around the world. For 77 years, the Met has broadcast Saturday matinees performances to 11 million radio listeners in 42 countries. But, strangely, the Met actually has to pay many of the radio stations around the world to carry the broadcasts -- fees that amount to millions of dollars annually. (The irony of non-profit radio -- the Met owns the content, but has to pay to have its content broadcast!) Fortunately these radio broadcast costs have been underwritten by major corporate contributors (originally and for many years Texaco; for the last two years Toll Brothers, foundations and others).

With television, however, the economics are different from radio. The new HD telecasts cost on the order of $1 million each to produce and televise worldwide. They are shown in movie theaters that are equipped with satellite links and high definition projectors. But unlike radio, it's the the viewers who pay for the privilege of watching.

In the first season, 2006-07, six operas were telecast to about 325,000 viewers (these numbers include encore, non-live, repeat telecasts). This past season, eight operas were watched by 920,000 people in 23 countries who paid an average of $22 each. The Met splits the receipsix operas were telecast to about 325,000 viewers. Next year, eleven operas will be televised to an even larger number of screens and viewers.

The benefits of this initiative are potentially dramatic, for several reasons. First, revenues just about covered costs in the 2007-08 season; next year revenues should easily exceed costs, and thus become a contributor to the bottom line. Second, it is a terrific source of audience development. After just two years, more people now watch the Met Opera in movie theaters that in the opera house itself (around 850,000). Presumably many of the attendees will graduate from watching the opera in a movie theater to experiencing it at the Metropolitan Opera House. And finally, the HD program is public relations bonanza. The performances are covered by the local media in cities around the world as if the operas were actually held in those locales. The press clip file of the Met now has grown from magazine thickness to that of a telephone book.

The experience of watching an HD live telecast of the Met Opera is remarkable. In many ways it is an improvement over seeing the opera in person. Heresy? No, not really. To start with, the close-ups of the singers on the screen are simply not available in the opera house. Also unique are the live interviews with the performers during intermissions; many are caught just as the curtain falls and they head backstage. Or they're interviewed in their dressing rooms. And the specially produced documentaries shown during intermission -- for example, how the opera was rehearsed -- are insightful. Moreover, the high-definition images, color, and sound are all at the highest level. (Well, almost always. There have been times when the theater's equipment crashed, or went out of adjustment, or whatever. But, hey, they're still early on the learning curve.). Oh, and a final note of differentiation -- you can munch popcorn during the performance.

By the way, even though the telecasts are shown a month or so later on PBS, there is simply no comparison between seeing them in the theater and on a home TV system -- the giant screen imparts a totally different experience.

Needless to say, the Met's HD telecasts have been so successful that they have attracted competition. Already, La Scala and the San Francisco Opera have begun transmitting a limited number of their productions to theaters -- but not live. Their results so far have been dismal. A recent showing of a San Francisco Opera telecast in a New York theater had three people in the audience. By contrast, the Met's theaters are mostly sold out, and many of the theaters have added additional screens to accommodate the crowds.

The HD telecasts have created a salutary byproduct. It may be my imagination, or it may be real, but the singers at the Met, both male and female, seem to be getting slimmer. It's one thing to be a plus-size on the stage, but having one's one's image projected around the world on forty-foot-wide screens makes even the most confident superstar head for the gym.

Measures of success

Well, it's been two years now since the Met embarked on its new initiatives. What are the results? Here are three measures of success: box office, sell-outs, and subscription rates.

Box office improving strongly

The box office results for the last two years showed a dramatic improvement, rising seven points to 84% in 2006-07 and a further four points to 88% last year (maroon bars). Because each percentage point translates into roughly $1 million of revenue, the uplift to the Met bottom line is meaningful.

(These box office figures are for percentage of total dollar capacity. The actual number of seats filled is about six percentage points higher, or very close to 100% capacity. At every performance there are some discount seats and complimentary seats.)

2008-06-18-B.O.2008.png


Sell-outs increasing rapidly

The second measure of success can be seen in the chart below on sold-out houses. After year-by-year declines earlier in the decade, sell-outs fell to a low of 10% in 2005-06. But just two years later, 58% of the season's performances sold out.

2008-06-18-Sellouts.png

Besides the revenue impact of selling out the house, there are other important benefits. Sell-outs create buzz and excitement. It stimulates both the performers and the audience to see every seat in the house occupied. Sell-outs add to pricing strength. And, of course, everyone wants to go to a show that he can't get tickets to. Finally, sell-outs are a boon for selling subscriptions and for increasing philanthropy. For a number of years, when you could buy a ticket for just about any performance at any time, there was diminished incentive to subscribe or to make a donation. That's no longer the case; if you don't have a subscription, you may not have a chance to see the show you want. And now, these pressures increase the likelihood of donations in the hopes of getting better seats or subscriptions.

Subscriptions growing

In the early years of the decade, the number of full-series subscribers were diminishing. Because of little incentive to subscribe - tickets were freely available last minute - subscription levels declined every year (orange bars). That all changed in 2006-07, when subscription levels stopped dropping. Then, in 2007-08, full-series subscriptions rose 12.6% (maroon bar). Few other cultural organizations have shown that much growth in subscriptions in recent years, and fewer still double-digit growth.

2008-06-18-subgrow2008.png

Case Study Conclusion: The Battleship Has Turned

There seems to be enough data now to demonstrate that the Battleship Met has indeed turned around. Just two years ago, every indicator for the Met Opera was pointing down. And now they're all pointing up -- attendance, subscriptions, sellouts, philanthropy. And if one looks at that ephemeral quality associated with success -- buzz -- the Met now has it again. In fact, the Met has become the hot cultural ticket in town.

Yes, it's costing more money to effect these changes, but the increases in revenues -- from philanthropy, box office, and telecasts - are likely to offset these costs in the future.

Even though opera is an anachronism, a centuries-old art form replete with some of the creakiest plots imaginable, in 2008 opera - at least the Met Opera-- is where the action is. The Met has begun a new act. Who woulda thunk it?
 
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