Webinar Recap: Addressing Business Model Constraints through Digital Innovation (A Case Study from Boston Baroque)

November 16 (Replay at end of page)

On November 16th, we were delighted to have Emily Kirk Weddle, Director of Marketing & Digital Content at Boston Baroque, join us for a webinar about the organization’s digital content innovation during the pandemic and beyond. She shared Boston Baroque’s story of the strategic shift they’ve undertaken to extend the reach of the organization’s digital content and build it into a meaningful new revenue stream.

According to one Boston Baroque team member: “Arts organizations don’t place enough value on how people want to consume what we have to offer… Boston Baroque’s digital journey has been about finding other ways that consumers value what we have to offer and delivering it to them.”

Continue reading for a full recap of the session, which included an overview of ABA’s own case study on Boston Baroque’s digital innovations and a Q&A with Emily about her team’s development of a forward thinking digital strategy.

To set the context for the conversation, ABA’s Chief Research Officer, Pope Ward, outlined the current promise and challenge of digital in the arts.

Digital provides potential ways out of the current cost challenges inherent in the cost model of the arts — including high fixed costs, limited performance runs to recoup costs, and frequent disconnects between the costs of a performance and the revenue it brings in. Digital content can extend the size of your audience, allowing reach to fans who live far away or no longer feel comfortable attending in-person performances. It also can extend the time that a performance is available for consumption, allowing for multiple viewings.

Of course, digital also presents its own challenges. It requires:

High quality audio/visual capture, which raises costs
New skill sets on your team — likely meaning additional outside partnerships
Attention to licensing agreements

And, perhaps most importantly, a new understanding of what audiences want — which can vary widely for digital audiences from those who attend in person.

Boston Baroque’s Digital Story: Starting Strong

So, how did Boston Baroque develop their digital strategy?

Their journey started even before the pandemic, when they inked a deal with Amazon Prime for streaming concert video content. When COVID-19 hit, the organization decided to lean into this new channel — and bet hard on their digital strategy. Instead of paying artists cancellation fees, they paid them for the rights to their past work, to continue presenting these pieces virtually.

At the time, an industry-negotiated IMA side letter allowed free use of digital content for 120 days, which is a useful structure to keep audiences warm with digital content during the shutdown. But Boston Baroque had the vision to create a long-term digital asset that it could monetize and to continue to pay artists for their work. The orchestra therefore started by paying for the rights to 14 past productions so it could generate an immediate stream of value.

Leaning into Digital for the Long Term

As it became clear that the pandemic was going to be longer than we’d all hoped, Boston Baroque invested in a flexible digital season — one that could convert to in-person when appropriate, but that delivered real value in the meantime. Another partner became crucial here, this time WGBH in Boston, a powerhouse classical music station that had invested in a world class video and audio recording facility.

For their first fully digital season, Boston Baroque built monthly programming around the archived productions for which they had licensed the perpetual rights. Virtual audiences could subscribe to the whole season, or they could buy tickets for individual productions.

In addition to the performances, virtual audiences could access “director’s cut” content from Boston Baroque founder, Martin Pearlman, as well as highly-produced documentary content from an Emmy-nominated filmmaker. Over this period, Boston Baroque’s number of “digital households” increased by nearly nine times.

To produce such high quality content, there are added costs. The first is perpetual licensing from artists, which adds about 10% to production costs. The second is the higher costs associated with high quality recording of audio and video with multiple cameras — that adds another 25% to the cost of production.

With this in mind, Boston Baroque’s next step was to monetize.

From “Eyeballs” to Monetization

Whereas the first phase of the organization’s digital strategy was focused on reach — gaining new listeners and viewers — the next step was to turn this into a valuable revenue stream. While Amazon Prime was a powerful tool for reach, the company took a majority of the profit from video streams and did not share any audience data.

For their 2021-22 season, the orchestra committed to a hybrid release of every production. They also released their entire season on the classical music streaming platform IDAGIO, which gave them a way to capture much more revenue and customer information. They were the first baroque orchestra to stream their entire season on IDAGIO.

Boston Baroque used marketing to underscore the value of what digital audiences were getting. They allowed free access for a short time after each production and then put it behind a firewall. And some content was only available to subscribers, bolstering the value of signing up for a full subscription. The digital subscription was priced at $200, with the option to add in-person tickets. By the end of this second season, about 30% of Boston Baroque’s income came from digital content.

The Results of Committing to Digital

The value of Boston Baroque’s digital strategy has been tremendous.

Since the start of the pandemic, the number of households consuming their digital content jumped nearly nine-fold from 4,000 to 35,000. And the geographical reach is remarkable — they now have consumers in 117 countries and on 6 continents.

A less tangible but equally important benefit has been the acquisition of capabilities to scale. They’ve built the digital capability to create content at a level that meets the highest production standards and customer expectations. As a result, many for-profit distributors have reached out proactively to Boston Baroque to see if they’d be willing to provide content.

The team has learned a great deal through this initiative as well, including:

The nature of online demand
How to produce
How to market
How to price
How to distribute

And, finally, the financial pay-off — today, nearly a third of Boston Baroque’s income now comes from digital revenue.

Looking Ahead

Boston Baroque will continue with several experiments as they continue their investment in digital, including:

Pay-what-you-will pricing structures to understand price sensitivity.
Greater optionality of subscriptions.
Understanding gaps in the market based on audience motivations, such as music for studying or weddings.

With this context, we turned to Emily to learn from her experience leading this strategy.

Pope Ward: Tell us about those first decisions to invest heavily in digital when the pandemic started.

Emily Kirk Weddle: When we started those conversations we had no idea what the path forward would be — it really boiled down to having a sense that this was going to last longer than we initially thought. We knew the 2020-21 season wouldn’t have in-person audiences and the gravity of the situation made us want to invest longer term, instead of putting a band-aid on things. We decided to invest in the productions we had and in our musicians, paying them for their work and contributions to what would be a full digital system.

We were in a unique position cost-wise — we have to pay out artist licensing fees per our union agreement, but we don’t have to pay other licensing fees because, as a Baroque orchestra, we perform music that is in the public domain.

I was new at that time, having joined the organization in 2019, and had to become a producer, which was a totally new skill set. It’s important to be flexible and entrepreneurial.

What did you learn from that moment of having to become a producer, instead of a traditional head of marketing?

A lot of my job changed to actually being on the production side. In the more traditional classical music model, departments are much more siloed. Now, I was watching our full-length concerts and operas alongside our music director and giving my own input from the consumer perspective, which is a really important voice alongside, of course, the musicians’ voices. I have a degree in music and art history, and the art history background actually really helped because visuals are what make you stand out — and Boston Baroque really invested in them. Through this experience I developed an innate sense of what content people would enjoy.

Part of that included your relationship with GBH — we’d love to hear you talk about that alongside the cost structure.

We’ve talked about artist licensing fees, but there are also production fees. Another vital part of our success has been our partners, and GBH is one of the best partners we’ve worked with. They are full, equal partners in the production of our live streams of new content.

GBH is our public television in Boston, so we’ve worked with their production group alongside CRB, the classical music station, to start streaming from the TV studio. That is a really different look than the archival streams we had from a traditional concert hall. From our first streams without an audience, we realized just how much better everything looked. We had cameras of a wonderful quality, amazing cameramen who have worked on award winning shows, and a great lighting director and audio engineers. We worked in tandem with them to build a timeless visual style for our live streams.

Did you learn anything from your audiences that caused you to evolve how you recorded video and audio over time?

We definitely didn’t know all that from the beginning when we were doing our own streams, so I think this is where our IDAGIO partnership comes in. They use Vimeo OTT, which has high quality surround sound and close to 4K visuals, and we heard feedback from our audience that this was a step up. We were capturing all that high quality video and audio content at GBH, but the actual streaming platform needed to match that quality to take it to the next level.

That was the biggest thing we heard. Matthew Principe, our live stream director, has a really wonderful look, balancing capturing the musicality of the works being performed with a good mix of wide, mid, and up-close shots.

As a consumer myself, I personally appreciate the point of view you can access through digital — you could never see our organist’s hands at an in-person concert! We now have a lot of audiences who like to both come in-person and watch the stream — these are two different experiences. That’s been vital for us too, no matter how you join Boston Baroque you’re going to get the same level of quality and investment from us.

Thinking about it now, would Amazon be your first move again in terms of reach?

I would do the partnership with Amazon Prime all over again, yes. When we originally would put an on-demand concert on Prime, anyone with Prime could watch it for free and that brought in the 35,000 households we never could have had otherwise. Just by skyrocketing our visibility and incorporating free-ish online content in strategic ways, it helped bring us to the level where our other partners got interested.

We’ve now switched to a model where you can rent any of our performances on Prime. Of course, if your cost goes up your reach goes down, but you revenue also goes up — we still have people renting our Messiah!

The thing with Amazon, YouTube, Spotify — those are all reach strategies. That allows us to be heard in 117 countries. But we’re not accessing our data, other than putting our ads on those platforms. We can’t understand who those people are to get them to interact with us in other ways. That’s part of a long-term strategy for us — I want the person who listens to us all day while they work to buy a $9 ticket for a live stream.

IDAGIO, on the other hand, is more about revenue. We have paying audiences in 55 countries through the platform, which is way more than pre-COVID, when we were much more regional. Our story is really speaking to a lot of donors and investors who see that this is a path forward in classical music as a way to become a more sustainable business model and industry.

You started with reach and then moved to monetization and audience capture — how did you think about where to go in order to bring that strategy to life?

IDAGIO was something we wanted and our success with Prime got their attention and allowed us to negotiate a deal. For a live streaming platform (other than building one ourselves, which we did not want to do), IDAGIO seemed like the premiere option. So it was a mutual coming together in that moment.

They’re really supportive of artists in their financial structure — if we sell a ticket, we receive 80% of the revenue, if they sell the ticket we receive 50%. They are also an audio streaming platform, so the hope was to be able to convert those audiences who are streaming our 26 commercial recordings into watching our video content, and the IDAGIO partnership allowed us to do that in a very targeted way.

How has your marketing strategy shifted over time?

When I started in 2019, one of my first priorities was to build a website that was designed to get people to buy in-person tickets. Come 2020, we had to adjust that web design strategy to be optimized for watching digital content. Using Squarespace, we were able to change our website quickly and efficiently. It was a big change from selling as the priority to balancing providing content with training audiences to value it to a point where we could start selling it.

Over the past two seasons, we’ve embarked on an integrated marketing strategy to enable the consumer with all the options we have — we value every option available to them. Our tagline is, “we look forward to seeing you at Boston Baroque in whatever medium you choose.” Our marketing strategy just increased in the sense of having so many options and wanting to communicate them to the appropriate audiences, without assuming that what someone has done in the past is what they’ll do in the future. We’ve seen more people become comfortable with being back in the concert hall, so I never want someone who only participated virtually in past seasons to only receive information about virtual performances, and vice versa.

Are there elements of the hybrid offer that you find especially important?

I think as we talk about subscriptions, we’ve been a bit different from the rest of the industry. As many people know, the subscription model was slowly depleting over time — we were seeing fewer people subscribing to a whole season, and COVID accelerated a lot of those trends. With the support of senior leadership and our board, I decided to cut ties with that model. It wasn’t working for us, and to stay competitive you need to change your product to fit with what consumers want. Instead of trying fit the 19th Century model into the 21st Century, we’ve been able to innovate in a lot of ways.

We decided that for our fully virtual season, we would have a fully virtual package. Then, when we returned, we offered a hybrid subscription model. This worked for the first two years — a lot of people wanted that digital insurance if they couldn’t make it in person.

Last year, we saw a little dip in subscriptions, so instead of saying, “let’s just keep doing our model,” we said, “what’s that about?” It turns out, people want to come back. So we now have a three-tier model of subscriptions. We aren’t saving people’s seats. Instead, you get a base of in-person tickets and a pre-sale period for subscribers only, and you can layer digital content on top. This enables the consumer to do what works best for them.

And if people want to downgrade their subscription, that’s fine too! As long as they keep Boston Baroque in their life in some form, we’re happy. That has been really game changing for the organization, and has made us really unique. It allows consumers to purchase tickets only to the shows they really want to come to. We have a 120% subscription renewal rate this year with the new model — it goes to show that you have to continue to innovate.

What lessons have you learned through your experimentation with pricing?

People value digital content! Our average digital ticket price is about $20, and our entry level to a digital concert is $25. This revenue stream has potential — it’s still lower than in the hall, there will always be a differential there, but it’s enough to be valuable.

We continue to work on marketing by emotions and activities. Our inspiration for this was the fact that our highest earner is a CD of wedding music.

We also think about repackaging our audio content alone. Last year, we released a recording of Joseph Bologne’s violin concerto as an audio recording on our own, because we’d captured it. The film “Chevalier” was coming out, and it was the perfect time to get included in those playlists that were rounding up his music.

A final question from the audience — what kind of data do you find most informative, and is watch time one of them?

IDAGIO gives us contact information of everyone who has purchased, so we can survey them, remind them of upcoming events, and convert them potentially to be our own ticket buyers. We also get information about reach, which is vital — they track all the countries where people are accessing our content.

We don’t get a lot of insight on watch time, but at least from conversations with our subscriber base we see most people actually tuning into live streams or watching the on-demand version very quickly after it has aired. People want to be part of the experience. That’s an interesting insight because it’s how we sell the in-person content. We should be observing people like Taylor Swift, how she created a second experience for her fans by showing her concert in movie theaters, and trying to incorporate those strategies into our own!

Thank you to Emily Kirk Weddle and Boston Baroque for their participation in our webinar today. You can view the full recording of our webinar below, and access past ABA Live! recordings and recaps here.