Theater things that don’t make sense: Vol. 9

I got pitched an opportunity today to be a part of a group sales catalog that was being distributed to thousands of potential group sales buyers.  All that I had to do was buy an ad.

Seems like a pretty good deal, right?

It is . . . and I took it . . . along with the 2-3 other similar opportunities that I’ve been presented over the last several months from different group sales companies.

But here’s what I can’t get out of my craw . . .

See, the companies that put these catalogs together get Producers like me to pay for the costs of the catalog itself, the distribution, etc. and there’s probably even some money left over for a profit.  But when their clients pay for the tickets, they get a commission, so in a nutshell, I’m paying to make them money.

Shouldn’t they be responsible for advertising their own product?  Without shows, don’t they disappear?

I hate to begrudge someone a killer business model like the above, because these companies have done a great job in convincing us pay for their marketing.  But I can’t help but wonder when this practice started . . . and why it continues.

Like I said . . . I paid it . . . and I do think it is worth it.

And I will keep paying it . .  as long as there are consistent results.  If not, then we may have to find a more economical way around it.

 

(Got a comment?  I love ’em, so comment below!  Email subscribers, click here, then scroll down, to say what’s on your mind!)

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Comments
  • Scott says:

    Have you thought about the rewards programs usually attached to your credit card? Same model. You pay $25+ a year to get back points equal to about 1.5% of the sales generated by your purchases. The credit card company / bank also gets 1.5%. The merchant is charged 3% for being able to accept their form of payment, which they have to do to remain competitive. So, you’re paying $25+ a year to be a part of a rewards program that generates 1.5% of all your purchases back to the bank. The merchant to make back the 3% they have to pay to the bank adds that cost onto the purchase price of the product.
    The whole model is unfairly slanted to the banks. It’s a good deal only for the banks. A split for those of us who agree to play this insidious game and a complete loss to those without a credit / debit card with the program.

  • Very interesting point made here. I think that since the online world is in the process of re-imagining the catalog model, perhaps we should start doing the same. If we can make ads that are even more targeted, we should be able to move beyond catalogs and start sending to RSS feeds, and be part of kindle and ipad downloads truly tracking the advertising spend. The point you make here about the commission is revealing a problem with the system. I would hope that someone in group sales who is incredibly savvy might recognize this is an opportunity to create something that works better for the producers and find a nice blue ocean in the market place. My guess is that if someone came to me with a catalog where I bought an ad and got participation in those commissions, I’d be much more likely to up my spend. Basically a rev share model similar to amazon associates where if they do better, we all do better. Cheers!
    http://www.oneproducerinthecity.typepad.com/

  • Margie Goldsmith says:

    So, why can’t you offer 10% off at the box office to any tri-state local person who can prove it with a license or other I.D.? And advertise it LOCALS ONLY — in local pubs — and get editorial on it in AM NY and Metro NY?

  • Clair Sedore says:

    I live in Toronto, Canada and when I spend a week in New York City, I literally live in the dark,usually 10 shows in a week, and I am sure there are not too many locals who go to that number of shows?
    Clair Sedore
    world-theatres.com

  • lois says:

    Maybe Broadway is getting such a small percentage of New Yorkers as compared to “out-of-towners_, because the “o-o-t” are the target of what is on Broadway – big, flamboyant, Las Vegas-type “stuff”. Bring things from Britain and “let’s change it for the American audience” – that alone should tell you something. Let’s change Porgy and Bess – we know what Gershwin REALLY wanted to say, On a Clear Day – we know better than Lerner and Lane, etc, etc, etc….it’s the same dumbing down and I believe New Yorkers aren’t interested. Out of towners go because they believe that’s what you have to do……

  • Larry Murray says:

    There is a cost to finding and selling a ticket buyer, whether sold one at a time or in groups. There is also the fact that empty seats represent revenue lost forever. Producers have to make choices based on these costs vs. revenue generated. Some feel the cost of newspaper advertising is too high and unfair. Others don’t like the middlemen.
    Like it or not, it’s just a series of marketing decisions, and the right combination and a good show usually equals a decent return on the investment. I never focused on the money others were making, only on what I needed to keep performances going and in the black.

  • If you perceive that this is a good deal for you, then I’m not sure what cause you have to complain. If you want to capture more of the economic surplus for yourself, then try to negotiate down the price or go with a catalog that reaches the same value customers at a lower price, or a higher value customer base for the same price, if you can find one.
    As for Michael’s idea, I agree there is an opportunity to leverage technology and start competing on price. But it certainly is not “blue ocean” in a crowded market like this. Give it a shot, and you’ll see that ocean get very red, very fast. If one catalog starts competing on price, then they will all have to do it. And within a year or two, they will have competed away most or all the profit from ad sales. They know this, so they keep it the way it is. No established player wants a price war. And newcomers rarely have the established revenue streams and cost efficiencies to be able to afford one.

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