"ALTERNATIVES TO SUBSCRIPTION MARKETING"
Remarks by Thomas Cott
Director of Marketing & Special Projects, Lincoln Center Theater

Delivered May 11, 2000
at the International Conference on Arts Marketing in Madrid, Spain

 

Good afternoon. Thank you for inviting me to speak with you today. I am very happy to be visiting Madrid for the first time and I look forward to many return trips to this beautiful city in the future.

You've just heard from my friend David Steffen how subscription works.  This traditional way of marketing the performing arts has been used effectively by both commercial producers and non-commercial producers such as his company, the Roundabout Theater, for decades. However, with all due respect to him and the many other talented marketers who use subscription, I am here to suggest some alternative marketing ideas, using Lincoln Center Theater -- the company where I've worked for the last 15 years -- as an example.

Lincoln Center Theater is one of America's largest not-for-profit theater companies and yet we haven't offered subscription for 13 years. I'll explain the reasons why in a moment, but first let me say that if I leave you with only one idea today, it is this:

There is no single, magic way to market the arts!

Subscription is not a panacea, nor is any alternative idea I may mention today. The way we do marketing at Lincoln Center Theater evolved out of our own particular situation. And therefore, our way of marketing might work for you, but it also might not. The important thing is not to do exactly what we do, but to open your minds to different ways of marketing.

Subscription is very effective in some ways. Many theaters sell out their season on subscription and are quite happy. But I believe that it is not enough just to sell tickets.
I think it is equally important to find an appropriate audience for whatever you are producing, whether it be theater, music, dance, opera, whatever. And it is nearly impossible to do this when you use subscription -- which, by definition, limits your audience to the same insular group of theatergoers who attend over and over again.

I have a fundamental problem with the concept of creating an exclusive or elite audience that receives not only substantial discounts but many other benefits, merely because they can afford to pay often large sums of money up front to guarantee their attendance. Outside my theater, there is a wall with the following inscription on it: it reads, "the arts are not for the privileged few, but for the many." By moving away from subscription, we have tried to open up our doors to more than just the privileged few and welcome in many people who don't typically go to the theater.

But to understand why we decided to abandon subscription marketing at my theater, I need to tell you a little bit of history. First of all, you need to know about Lincoln Center, which is the world's largest performing arts center. Most people think Lincoln Center is one place, run by one central governing board. But in reality, it is made up of seven buildings that are home to 12 separately managed arts organizations. They include two opera companies, two ballet companies, a symphony orchestra, a jazz orchestra, a chamber music group and us: Lincoln Center Theater.

Our name can be confusing. We are called 'Lincoln Center Theater' and therefore many people assume we are responsible for everything that happens at 'Lincoln Center' but we are only involved in the production of plays and musicals. We do this mainly in our two home theaters: upstairs is the Vivian Beaumont Theater, which has 1,100 seats, and downstairs is the Mitzi E. Newhouse Theater, which has 299 seats. Both of these spaces, by the way, were named after prominent philanthropists who made sizeable contributions towards the construction costs of our building.

Like the Roundabout Theater, Lincoln Center Theater is a not-for-profit company, which means we rely on tax-deductible contributions to supplement the revenue we earn at the box office. This year alone, we are going to raise about $11 million -- mostly from individuals, foundations, and corporate sponsors. We also receive a very small amount of financial support from the government. In all, our fundraising efforts will supply about one-third of the money we need to cover this year's total expenses of about $35 million. The remaining 70% or so comes from ticket sales and other earned revenue.

Our company is different from our other colleagues at Lincoln Center and most other not-for-profit theaters, because we also regularly produce shows away from our home at Lincoln Center, in theaters located in the commercial district known as Broadway. But I will come back to that in a few minutes.

We are also different because our company did not even exist when Lincoln Center was first built back in the early 1960s -- unlike most of the other residents of Lincoln Center, including the Metropolitan Opera and the New York Philharmonic. These companies existed for decades before Lincoln Center was created, and their buildings at Lincoln Center were designed with their specifications.

Our theater building, on the other hand, was already being designed while the founders of Lincoln Center were still creating the company to fill it. This turned out to be a harder task than anyone imagined. At first, they hired a producer and a director from the commercial theater world to establish a new, non-commercial repertory company at Lincoln Center. Unfortunately, these two men were unable to sustain the operation for more than two years. Over the next two decades, three other managements were brought in to run the building, but none succeeded for very long. Starting in 1980, the building was closed for several years and many in New York wondered if it would ever reopen.

In 1985, our company -- Lincoln Center Theater -- was established and, 15 years later, we are still happily in business, with a long, prosperous future ahead of us. Why have we succeeded while our four predecessors did not? A big reason, I believe, is because we decided early on not to produce the way most not-for-profit theaters do -- with a subscription season, with plays that run only for an allotted brief time period.

Instead, we chose to be more flexible and let our more popular productions extend beyond their originally announced limited engagements. The profits we have earned from these extended runs are the crucial ingredient to our longevity. Without our long-running hit shows, I don't think we would still be in business today.

Now, I need to explain that when we first began in 1985, we did start with a traditional subscription system. After all, subscription was, for many decades, the proven method to draw an audience and gain financial security from pre-paid season ticket sales. There were long discussions between our board of directors and senior managers on alternatives to subscription. But these ideas were rejected initially, because it seemed hard enough to get the theater operating again after being closed for a number of years.

Also, there was a lot of pressure on us, since we were re-opening in such a highly visible cultural landmark in New York. The city's most influential newspaper, The New York Times, wrote in their preview of the 1985 season that "the most significant artistic event of the coming year is the return of live theater to Lincoln Center."

Therefore, we decided that a traditional subscription plan seemed to make the most sense, at least for the beginning. But to counteract the high expectations, we only began with a modest, two-play subscription at the smaller of our two theaters, the Newhouse. We did mount an extensive sales campaign, however, including:
· Full-page advertisements in The New York Times;
· Large posters in the New York City subway system;
· Telemarketing calls to people with a history of regular theatergoing; and
· A letter sent to tens of thousands of recent ticket buyers to Broadway shows and the other performing arts companies at Lincoln Center

This elaborate marketing campaign was linked to a simultaneous outreach to the press, which generated a lot of free publicity about our new company. All of this work, of course, was designed to sell more than just our first two productions. Our company needed to establish its identity and set a tone for future seasons.

About 5,000 charter subscribers joined, filling most of the available seats for our first season. However, it soon became apparent that subscription was not going to work for us, after all. From an administrative point of view, the subscription system was too constricting. For example, our second production -- a revival of an American play from the 1970s called The House of Blue Leaves -- became a surprise hit with audiences and critics alike. Based on its great popularity, we did not want to end the run of the play just because we had to bring in the next subscription offering that was scheduled to begin.

And so we decided to move the production to our larger auditorium, the Beaumont Theater, where it had an extended run and won most of the major theater awards that year. The following season, we moved The House of Blue Leaves once more, to a theater in the Broadway district, the first of many plays we have produced on Broadway.

Another problem we had with subscription was that it limited us to a certain number of plays each season. During our first year, we began our now long-standing practice of adding in short runs of more unusual fare -- such as comedy acts and performance art. We present these side attractions in between the runs of our main productions or sometimes during the runs of our main productions on the nights when they are not performing, using the same set as a backdrop.

During our second season, we expanded our productions to include shows in both the Beaumont and Newhouse Theaters. Once again, we offered a traditional subscription plan -- but this time, there were terrible administrative headaches, when we had to reissue thousands of subscriber tickets for two of the productions we had announced. (These shows had to be rescheduled because key artists involved in these shows became unavailable for the original dates.) Also, two other productions had to be completely cancelled and vouchers for the next season were issued to the subscribers, who were understandably unhappy with us.

But we were unhappy with the subscribers, too. Gregory Mosher, who was the artistic director of Lincoln Center Theater for the first six years, felt strongly that the broad range of plays he wanted to produce were not well served by a subscription audience. Our subscribers were extremely homogeneous: nearly all were white, affluent and older. While this is a common demographic profile for subscriber audiences, it was a poor match for our varied programming. Lincoln Center Theater's productions have always been an eclectic mix of new and old material, using traditional and more adventurous theater styles. Our second season was no exception. In that year, we produced:
· a festival of five South African dramas;
· a multi-media music theater work;
· a New Vaudeville comedy act;
· a revival of an American play from the 1930s;
· a Shakespeare play; and
· new works by the veteran American playwright Arthur Miller, the Nigerian author Wole Soyinka (who had just won the Nobel Prize) and a young American newcomer named Roger Hedden.

It was wrong to expect there would be one single audience interested in such a variety of attractions, but the subscription system forced people to buy tickets for most or all of these shows. As a result, the subscribers' reaction was good for some, indifferent for others, and hostile for the rest.

Also, we had a strong desire to diversify the audience, to bring younger people and people of different ethnic and racial backgrounds who would relate more directly to the subject matter depicted on stage. New York City is famous as a melting pot of the world's cultures, but we were failing to attract most kinds of people to our door.

Moreover, we felt we had an obligation to the writers, directors, designers and actors working at our theater to attract an audience that could connect with the shows they created. Even though our subscribers were avid theatergoers, they were not necessarily a good audience for many of our productions, because they did not usually relate to a play's subject matter or production style. And since the subscribers held the bulk of the seats during the run of a show, it created a vacuum of audience response that was sorely missed by the artists working on the plays.

On the other hand, we could not afford to discard our core audience entirely -- or the financial security that came with subscription. Despite the recent success of The House of Blue Leaves, we were still a young company with fragile financing. And so a new marketing plan evolved, almost as an afterthought, during our second season. A test was made in the subscription brochure we mailed out. On the back page, we included a small paragraph on the order form which announced an alternative choice to subscription, which we called Membership.

Nearly 12,000 subscribers signed up for our second season, including about 2/3 of the charter subscribers from the first year. We again heavily promoted our subscription plan with large mailings of brochures in the spring and fall, full-page ads in The New York Times and telemarketing. But the Membership option also attracted over 3,000 people, despite the very quiet nature of our announcement.

In retrospect, it is easy to understand the appeal of the Membership offer, which required only a small annual fee to join -- $25, which was a fraction of what we charged for a full season's subscription (which cost anywhere from $55 to $130). And Members then had the option to buy tickets for any or all of our productions during the next twelve months for only $10 -- a great savings over regular ticket prices, and not much more than the price of going to see a movie. Also, Members were not obligated to see any of our shows, unlike subscribers who had to commit to a season of plays.

Members also enjoyed priority ordering before the general public, access to a special Members-only telephone service for ticket ordering and information, and free copies of the Theater's magazine, published three times a year. (As an unadvertised benefit, both Members and subscribers also received discount ticket offers which we arranged throughout the year with other theater producers around town.)

Because Members picked which of our shows they wanted to see, their reponse at individual performances was noticeably more positive than many subscribers, who attended simply because they had tickets as part of a series, not because they had a particular interest in a production. Even bad reviews did not dissuade Members from buying tickets (presumably because the ticket price was so low that they could afford to be adventurous). On the other hand, some subscribers didn't use their tickets at all, leaving empty seats.

It should not come as a surprise, then, that we immediately gravitated towards the Membership idea. We mailed a letter promoting the Membership idea to a targeted list of theatergoers we knew had limited incomes. This mailing did very well and, by the end of the season, we had more Members than subscribers! It was only a matter of time before management concluded that Membership's advantages outweighed those of subscription. Yes, there would be a financial gamble involved, because Membership might provide less initial income than subscription did at the beginning of each season, but we projected that our cash flow would not be seriously compromised.

Since Members did not buy tickets to every production, we felt we could safely enroll many more Members than subscribers. The theory was that, if we could sign up enough Members, the revenue from their annual fees could come close to the revenue from subscribers -- which is exactly what happened.

In our third season, we discontinued our subscription plan entirely and only offered Membership. There were some angry subscribers from the first two seasons who hated losing their guaranteed same seats for each new production, but most subscribers converted to Member status without incident.

We once again aggressively advertised, this time pushing the Membership idea. We wanted to emphasize how inexpensive it was for Members to see our plays, so we used a photograph of a ten-dollar bill and the slogan "This is as cheap as it gets -- and as good." We printed this on brochures, newspaper ads and subway posters. We also went on the radio with a series of humorous ads, featuring two fictional women named 'Mitzi' (named after our Mitzi E. Newhouse Theater) and 'Viv' (for the Vivian Beaumont Theater). We hired two comedy writers who wrote and performed these ads praising the virtues of being a Member of Lincoln Center Theater.

At the conclusion of all of these efforts, our Membership nearly tripled in size from 11,724 people the previous year to 32,800 people by the end of the third season. The campaign was so successful that we didn't even need to spend any money to sell Memberships during the following two seasons! Renewal rates for Memberships were unusually high, about 95% of Members renewed each year, and any Member who left was easily replaced by someone new, thanks to existing Members who encouraged their friends and families to join.

The success we achieved with the Membership plan was diminished, however, by the fact that the vast majority of Members had the same demographic profile as our original subscriber base: that is to say, they were mostly white, affluent and older. This is partly because so many of our original subscribers had become Members. And it was also due to the fact that we had mostly advertised Membership to traditional theatergoers, the majority of whom are also white, upper middle class and older, using conventional media like The New York Times.

Over the first few years, we were able to get younger and non-white theatergoers to buy single tickets for some of our shows -- especially for our production of the South African musical Sarafina! But we still had not achieved diversity in our core audience of Members. So in our fifth season, we decided to create a marketing campaign to do just that. The first thing we did was hire an outside company to do some research. At our request, they interviewed a series of small groups -- each group was comprised of ten people who were not currently Members but who were deemed to be prospects, based on their prior purchase of tickets to cultural events. They were of various races and ethnic backgrounds, and they were all 20 to 29 years old, including one panel of college and graduate school students.

The participants in each panel discussed their attitudes and opinions on various forms of entertainment, including sports, movies, video rentals, music, dance and theater event. They spoke about the factors that helped them decide how to spend their leisure time.

The facilitator then specifically discussed Lincoln Center Theater and our Membership offer. Some had heard of or even attended our past productions, but they knew nothing about Membership or how it worked. They were shown two test brochures and expressed their views about what would entice them to become a Member.

Although this kinds of focus group research only provides a qualitative reading -- unlike quantitative measurements like polling, where a small sampling can represent the opinions of a larger population -- this study did confirm many of our assumptions. For example, most of the panelists had an interest in live theater, but because of high prices and difficulty in obtaining seats, they only considered going to the theater for special occasions like a birthday or anniversary.

Also, the panelists perceived that theater catered to a mostly older audience and was usually not relevant to their own experience. However, once they learned of the actual shows produced by Lincoln Center Theater, the number of familiar actors who worked on our stages, and how cheaply and easily they could obtain tickets through the Membership program, many panelists were interested in joining.

Our next task was to figure out how to communicate the benefits of Membership to a wider group of prospects, without the luxury of a long discussion. We recognized that a bold offer was necessary to get people's attention. Many approaches were considered, but ultimately it was decided to keep the campaign simple and direct.

Since price was a major barrier for our target audience, we created an introductory promotion where the first year's Membership fee of $25 was waived for qualifying prospects, with the hope that their experience would be so positive that they would then become fee-paying, regular Members in the future.

Introductory or 'Intro' Members would receive all the usual Member privileges and benefits for a full year, which would begin when they purchased their first ticket to one of our shows, using a tracking code. The promotion was tied to the purchase of tickets, because we wanted these Members to take an active role in the promotion. Also, this way we would know the Intro Members would see at least one show during their first 12 month period.

The plays we decided to produce that season proved to be a key help in promoting the Intro Member offer, because a number of the productions had natural appeal to the target audiences for the promotion. These shows were the entry point for most Intro Members. We then tried to convince them to buy Member tickets for other plays during the year, which were of less obvious interest to them. That technique worked especially well with the play Six Degrees of Separation, a long-running show from the previous season.

To ensure that only people in our target groups learned of the special offer, no announcement was made to the general press, nor were ads placed in the usual mainstream newspapers and radio stations. It was imperative not to communicate the details of this promotion through regular channels, for fear that an offer this good was ripe for abuse by those outside the target market for the campaign. More to the point, the research we did showed that our prospects did not generally follow mainstream media anyway, so we opted for an unconventional approach to spread the word.

Originally we came up with a plan to place ads in community newspapers, and on targeted radio and cable television stations. But this expensive promotion was not necessary, because word-of-mouth spread in our targeted communities amazingly quickly once we did only a few simple things:
· We placed an ad in a magazine aimed at African-Americans involved
in the performing arts;
· we sent letters to people who had taken advantage of a discount single ticket offer for two of our recent productions with African-American casts;
· we included inserts in the programs for our productions with African-American casts;
· we announced the promotion on a popular college radio station;
· we distributed leaflets at cultural events attended by our targeted groups; and
· we promoted the offer through our own group sales department, which had a heavy percentage of clients who were African-Americans or college groups.

By the way, group sales has proven to be a remarkably effective method of attracting non-traditional theatergoers, since these audience members are not always comfortable attending the theater on their own, but are happy to come with groups of friends, co-workers and/or family members.

But let us get back to the Intro Membership promotion. Like a pyramid, our efforts reached an increasingly wider network of people as word spread. We achieved our goal very quickly. In less than six months, we had enrolled about 10,000 new Intro Members.

A new dilemma arose, however. Because some of our productions are presented at the Newhouse Theater, which has a relatively small seating capacity, we concluded that we could not solicit an unlimited number of new Members. If our Membership grew too large, there wouldn't be enough seats to accommodate Member demand for tickets at the small theater.

By the end of that season, we decided to suspend Member enrollment, but not before the campaign had signed up a total of 13,842 Intro Members, bringing our total Membership to about 47,000 people.

To determine demographic information about the Intro Members, we mailed 3,000 surveys to a random sample. The format of the questions and categorized responses used in this survey matched a questionnaire we had mailed a few years before to the regular Members that we had previously enrolled. We used this same survey so that we could have a fair basis of comparison between the two kinds of Members.

The survey results revealed a substantial saturation of our target audiences. One of the most notable statistics was that 44% of the Intro Members were African-American, compared with only 3% of regular Members.

In addition, we learned that Intro Members were much younger -- almost 2/3 of Intro Members were 25 to 44 years old, whereas only 1/3 of regular Members were in that age range. Not surprisingly, more than half of Intro Members were single, whereas almost half of regular Members were married. And Intro Members had much lower household incomes: only half of the Intro Members earned what the regular Members earned.

The survey results also confirmed that widespread interest in the program could be generated cheaply and discreetly through word-of-mouth. Over 73% of the Intro Members reported learning about the program through a friend or relative, surpassing our most optimistic predictions. The survey also left room for comments, which were so uniformly positive that they sounded as if we had written them ourselves!

One last significant piece of information we learned from the survey was that 56% of these Intro Members had previously only been to the theater "every now and then",
"on special occasions" or "never" -- indicating that we had broken through to a whole new breed of theatergoer. On the other hand, six months into the promotion, when the survey was taken, only 24% of the Intro Members had bought tickets to more than one play, even though four shows were on sale during this period.

While it was surely valuable to the Theater to have these new theatergoers attend even just one play during their introductory year, it would be a hollow victory for us if they all disappeared after twelve months and only one play. Thus, the true test of our promotion rested on whether or not the Intro Members would see more shows and become part of the ongoing Membership program once the promotion had ended.

We didn't really know what to expect, since there had never been a theater promotion like it in anyone's memory. Because Intro Members were not regular theatergoers, it was likely that most would not continue past the first year. Over the course of that season, we wrote to the Intro Members just before their first year was ending and invited them to re-join, this time paying the $25 annual fee. Happily, about 4,000 of them, or about 1/3 of the total group, renewed as fee-paying Members, establishing a longer relationship with our theater.

That promotion took place in 1991 and 1992. And the Membership continues to grow and expand. Since then, we have done other, similar outreach efforts to targeted audiences, both to diversify our Membership and to attract single ticket buyers and group sales to our productions. Twice more, we have had to suspend enrollment in our Membership whenever we reach a total of 50,000 people -- which we feel is the most we can enroll without endangering the value of the Membership. Renewal rates continue to be very high, about 90% on average each year. We haven't solved all of our problems, needless to say, but we have been much happier with the Membership program and can not imagine going back to subscription.

Over the years, I have spoken to representatives of performing arts companies from all over the world, and whether they live in Mexico or Malaysia, Japan or South Africa, the issues they have raised with me always seem to come back the same questions:
· how do we find new audiences,
· how do we interest the young in what we're doing,
· how do we run a theater without subscription?

I hope my remarks will inspire you to think of alternatives to subscription, whether you try a variation of our Membership program or something entirely different. After all, there is no single formula to success or everyone would use it! One thing is clear, though: subscription does not generally attract the young or the less affluent and audience diversity is urgently needed for the performing arts to flourish.

What I've discussed today is only one way to lure these non-traditional audiences. The key ingredients are affordable prices, easy ordering methods, detailed and timely information about what is being offered, and most important of all, artistic work that has a connection to the lives of the audience members. A new generation of artists are creating and rediscovering works that appeal to a new generation of audiences. Arts marketers must devise ways of doing the same.

Decades ago, the American arts promoter Danny Newman -- who is the godfather of the subscription idea -- declared that "Subscribe Now!" should be the battle cry of all
arts marketers. But I say the time has come for a fresh start and a new battle cry:

"NEW AUDIENCES NOW!"