Webinar Recap: Innovative Subscriptions and Memberships
January 19, 2022
After recently completing a member-requested project on innovative subscriptions and membership packages, we were delighted to extend the conversation and share our research findings during our first ABA Live! webinar for 2022.
In our discussion we reviewed the high-level findings of our research report, followed by a Q&A with research participants and guest moderators, Steve Tate and Seth Macari from Berkeley Repertory Theatre and Kory Kelly from Pasadena Playhouse.
ABA Research Key Findings
To set the stage for our conversations with representatives of Berkeley Repertory Theatre and Pasadena Playhouse, institutions that both offered pay-as-you-go membership packages, we first took a focused look at our key research findings.
While our research and interviews were exclusively set within the theater context, we believe our takeaways can offer great examples and lessons learned applicable across genres.
The decline in subscriptions generally
Looking at pre-pandemic data both in terms of revenues from subscriptions and actual numbers of subscribers, arts organizations were already facing some troubling figures. The 2017 Culture Track survey, run in the US by La Placa Cohen, highlighted the fact that arts organizations had seen a reduction in subscriber numbers, though those subscribers were actually paying more.
Our most recent Arts Executive Poll confirmed that these trends were exacerbated during the Pandemic, with a 15% reduction in subscriptions from pre-pandemic times. However, based on the conversations we had across our membership; we suspect 40% is perhaps a more realistic figure of the declines in subscriptions for this first in-person season since closure.
While the context of the global pandemic makes identifying best practices more challenging, this is also a good time for experimentation.
Different ticket package value propositions
After understanding the pre- and post-pandemic context for subscriptions and memberships, we then conducted interviews that helped us synthesize existing offers into three different value propositions, answering the questions:
What is the value proposition beyond ticket or entry discounts that organizations are offering?
What are the additional benefits people are signing up for that might be different across these three different package types?
We found that audiences have three distinct reasons to pay for a package beyond the discount and it seems like all three value propositions can co-exist peacefully. These are:
To support the organization
To secure fixed seats at selected performances (part of more traditional/ familiar packages)
To attend with flexibility and be able to pick and choose what and when
We focused on the first and last value proposition during the webinar, where we saw the most experimentation.
Offer 1: Supporting the Organization
Most organizations have some sort of annual fund or opportunity to donate. What we saw in our research is that many organizations are moving to fill in the ‘gray area’ between their annual fund and subscriptions. These types of offers typically sit in the ‘donation’ section of websites and provide a low-end entry point for frequent attendees to become supporters and get access to ticket discounts.
Offer 3: Attending with Flexibility
We have identified 4 categories of flexible attendance:
Pre-paid voucher for tickets.
Flex-Pass / Package of vouchers
Unlimited Access Pass
Ticket Discount Access
Can memberships and subscriptions co-exist?
In Capacity Interactive’s recent research on ticket sales at arts organizations that use both memberships and subscriptions (pre-pandemic), three findings emerged:
1) Offering membership on top of subscription increased overall revenue - especially from subscribers who added the extra package.
2) The two programs didn’t seem to cannibalize each other, as both tend to have core users from different generational segments. Older patrons preferred subscription and younger patrons preferred membership.
3) Unfortunately, income from members is definitely lower than that of subscribers. Members generally attend the same number of performances, even slightly more, but they pay less. These discount programs tend to be very generous.
What is the right number or complexity of packages?
One theme that came across loud and clear in our interviews is how easy it is for audiences to get confused by multiple packages. Language matters a lot, and we need to keep it simple. We had several organizations avoid the word “membership” since it means many things to people.
It can be very tempting to build a package for every need with the belief that different people want different things and the fear of losing out if we don’t offer a resonant package for everyone. However, many organizations found that the more offers they had, the more confused people were — a phenomenon called choice fatigue. The sweet spot seems to be two types of offerings.
How should we think about charging for memberships? (annual vs. monthly?)
We saw a lot of pricing experimentation this season looking specifically at whether to sell monthly memberships rather than annual.
Monthly subscriptions are great for an organization if members stick with them and fall into the habit of their monthly payment like with other subscriptions such as Netflix, gyms etc. The challenge with monthly subscriptions, however, is that you have to make it possible for people to drop — and you may find yourself recovering dropped customers monthly rather than annually.
The positioning of the membership makes a big difference in whether it is habitual for people.
Positioning your program as a donation that happens to give access to ticket discounts is often something people don’t tend to think too much about. However, if you position your program from a discount lens this encourages people to be in the mindset of getting the best bargain. They are therefore more likely to consider their usage month-by-month, joining when they are going to attend and dropping when they are not planning on attending.
After this high-level overview of our research findings, we moved into our panelist discussion.
Live Q&A: Exploring Ticket Packages
Tell us about your subscription packages? How have they evolved over time and what made you consider a membership approach?
Kory Kelly (Pasadena Playhouse):
When I first started, we were looking at a significant decline in our traditional subscription model, at about 50% over a five-year period. So, our first job was to stop that loss. The impetus behind our membership program at the time was to support more fully the artistic vision of the organization by doing a program that charged an annual fee and provided access to everything. We did this for a couple of years and saw numbers that were ok.
Fast forward a few years to the pandemic lockdown, we decided it was time to resurvey our patrons and see what was happening. Based on what we heard we decided to continue with traditional subscriptions, and we also brought in our Playhouse Pass. The Playhouse Pass is our access pass where you pay $100 any time of the year and the following 365 days you get access to advanced ticket purchase at $50 for the best seats in the house regardless of what the top price is, or it will always be less if we have a cheaper show.
Finally, we also separated our transactional ticket purchase from the contributed revenue portion which we call Play it Up. Play it Up is an opportunity for people to add on extra to get extra benefits such as access to the members lounge, etc.
Seth Macari (Berkeley Rep):
For a long time, we had three offerings, our full seven-play subscription, we had a main five-play subscription, and then we had a choose-your-own options of three shows and up. We had those basic three options for a while and then we decided we wanted to try to shake things up.
Steve Tate (Berkeley Rep):
What we found in the moment of Covid was that we needed some flexibility, and we needed a package where it was more of a pay-as-you-go model and somewhat more non-committal. With the original three buckets of categories, we took our traditional subscription package, and really focused it as much as we could to what we call Rep Seven-Play Package.
The other thing we offered during this Covid time is the only package that allows our quote-on-quote digital insurance, where if you do not feel comfortable going to a show in person at the moment you can access our recording online.
Our other package is a Flex Package, which is like the voucher kind of package. You are basically buying four tickets to attend one of our seasons shows.
Previously, Berkeley Rep just threw all their shows on sale at the same time at any given moment. With our Flex Package and our Rep Passport we were able to put structure to when we put things on sale with priority booking periods allowing these pass holders to book before the general public.
Steve, we know you had previous experience with a similar package, so we’re curious if you made changes or if there are lessons learned from that?
Steve (Berkeley Rep):
When I was at ATC, we had a few shows that were highly anticipated, and people took advantage of the membership just to get that early access. Similarly, we can see the same thing with our two special events at Berkeley Rep with Mike Birbiglia and Fran Lebowitz, where people bought those packages to get early access.
Of course, you can say that long term this is not a healthy model but right now this is a benefit that we are approaching for new audiences and for new acquisitions.
Kory, we’re curious again about your perspective on sales, and your expectations about renewals for memberships versus subscription packages?
Kory (Pasadena Playhouse):
We find that membership models that do not have fixed seating attached to them on a set schedule tend to have lower renewal rates, so we are focusing on ensuring our packages are as patron-centric as possible
The Playhouse Pass is almost a losing proposition for us, in the fact that if somebody buys the pass and then buys two tickets for one show, they’ve already made up their money. We are discounting significantly from that point of view, but what we are doing is hopefully becoming first in their mind because they have this money invested with us.
From Berkeley Rep what you are doing to encourage people to use their benefits?
Steve (Berkeley Rep):
We send personalized communications to those Passport and Flex members. Any time we have a priority on sale we send those folk an email saying the priority window is now open for activation.
Our Passport members and our Flex members are seeing that the value of their package and the prices of tickets they are purchasing is saving them significantly more than what we initially advertised because our dynamic pricing starts after the priority window. Our prices don’t adjust until we know how those priority on sales is going and this is a great benefit for them.
Can you all tell us how you have marketed your packages?
Seth (Berkeley Rep):
We elected to not use the word ‘membership’. We spent a lot of time looking at the language for these packages because we had two new packages introduced simultaneously. Our aim was to boil everything down to just a few select bullet points and terms that our patrons would be familiar with.
After many iterations, we finally boiled our descriptions down to whether you are going to keep your seats, whether you are going to have access to advanced booking and whether you’re going to have the unlimited exchange options with the focus on the flexibility.
We also provided our audiences early with the price ranges of the different packages, highlighting the savings up front. Back to your original question we are essentially using email communications to keep people updated. It’s the cheapest way to do it and people do open their emails so it’s our go-to for sure.
Kory (Pasadena Playhouse):
The opposite of what Berkeley Rep is saying here, is that we chose to embrace the word ‘membership’ and use that predominantly because years ago we started using the term ‘member-supported theatre’ and we felt the word ‘membership’ allowed people to feel like they belonged to something beyond just getting additional benefits.
As many theatres do, we used to have different prices on Tuesday, Wednesday, and Thursday and then for weekend matinees. We decided that it doesn’t matter the day of the week you're visiting and that became integral to our marketing as well.
As we near the end of our webinar, we would love final thoughts from the three of you, any words of advice or lessons learned for folks who are thinking about this and trying to rebuild loyalty in this period through packages?
Steve (Berkeley Rep)
I think we are all in the same boat where we are trying to experiment. Right now, we are starting the conversations as best we can. I also believe we are going to see some PTSD with our patrons from this past year and a half. The fact that we are changing shows, moving shows and cancelling shows will have lasting impact. And while we can keep traditional packages, we were already seeing a drop in them pre-pandemic, so we need to find ways to pivot.
Seth (Berkeley Rep):
What have we learned through this roll out? Well again it may seem silly but, keep it simple!
Kory (Pasadena Playhouse):
Like Steve said, loyalty is on the patron’s terms, so it’s important to ask people directly what they want. I also think it’s critical to go back to our core as organizations and build packages that resonate with the audiences we want to grow.