Planning for 2021: collecting and interpreting actionable insights

The Melbourne Symphony Orchestra used advanced conjoint analysis to inform their 2021 planning

For one orchestra, what began as a pricing survey for classical music concerts in 2021 also revealed wide-reaching insights into patrons’ willingness to pay for digital content, their real intentions about returning to performances in person, as well as preferences around repertoire, artist, and concert times.

How do you plan for a new season in the middle of a global pandemic?  What is possible given wide-ranging uncertainties?  And how do you make what is possible work safely and financially?

Melbourne Symphony Orchestra (MSO), one of Australia’s leading orchestras, were not going to wait for the circumstances to change.  Instead like so many other cultural organisations, they have assessed the situation, asked what is possible and come up with a plan for a new season of concerts for 2021. 

‘Would shorter concerts be financially viable?’

Having designed a range of possible scenarios for 2021 involving socially distanced concerts of shorter length without interval, there was still the question of whether this would be financially viable, and which of the factors which are within the MSO’s control were most likely to affect patron behaviour.

The Project

MSO commissioned Baker Richards to run a Patron Preference Analysis in order to test their audience’s interest in a proposed new season format and importantly find out how much they would be willing to pay for tickets to attend. 

Using a specialist primary research technique known as conjoint analysis, we worked with MSO to design a survey they would send out to their patrons to find out how valuable different elements of their offer were to different segments of their audience.  The survey guides participants through an experiment which can be used for forecasting, modelling and segmenting patron intentions.

The central scenario revolved around presenting participants with a high-level description of how the 2021 season might work, but with several changing elements in relation to:

  • Repertoire
  • Soloist
  • Time of concert
  • Ticket price

This way, MSO could see what the impact each individual element would have on demand. 

Participants were offered a variety of repertoire choices. Due to expected flight restrictions, the choice of Australian and international artists was also tested

RepertoireSoloistTimePrice
Classics (e.g. Beethoven)MSO soloist6pmModel varied according to responses
19th Century Favourites (e.g. Brahms)Australian-based artist7.30pm
20th Century Marvels (e.g. Prokofiev)Non-classical icon8.30pm
9pm
Variables tested in multiple combinations

The start time of the concert was important, as MSO wanted to test the possibility of having 2 concerts in the same evening, allowing enough time between the end of the first concert and the start of the second, to turn the venue around.  Traditionally concerts had started at 7.30pm, but even with a reduced overall length, starting a concert at 7.30pm and leaving enough time to present another, later concert would mean a very late start for the second performance.

A range of prices was tested for tickets to these concerts, ranging from $45 to $131, with customers initially split into two segments based on self-determined price sensitivity so that we could determine the optimum price of the lowest priced seats in the auditorium (for the price sensitive customers) as well as the highest (for the non-price sensitive customers).

‘Would patrons watch online and how much would they be willing to pay?’

In addition to testing interest in the live concerts, MSO also wanted to know what people would be prepared to pay to watch the concerts online from home either in addition to attending live concerts or instead of. 

This version of the case study does not include the results of the digital pricing analysis due to commercial sensitivity.  An updated version will follow once MSO have launched their digital programme.

Willingness to attend

Our findings were encouraging.  Firstly, most customers (70%) were interested in buying tickets for the proposed 2021 season, provided there were sufficient safety measures in place.  A further 6% were only interested in watching online from home and the rest were not interested at all.

Of those that were interested, the majority (80%) usually purchased mid to high priced tickets indicating less price sensitivity than the remaining 20%, who usually opted for the lowest priced tickets.  Knowing the proportion of non-price sensitive vs price sensitive customers helps inform decisions around the optimal number of seats available at each price point across the auditorium.  The next question is what those price points should be.

Graph: 70% of respondents would be interested in buying tickets for the kinds of concert MSO are planning for 20201. Only a small proportion would be interested solely in watching from home

The Revenue Maximisation Price

The revenue maximisation price is the point at which there is sufficiently high demand that either lowering or raising price would result in a loss of revenue, either because the additional demand at lower prices is not enough to counteract the loss in revenue from a lower price, or demand drops off too much as prices rise.

‘Do patrons attach the same value to a shorter concert?’

The price sensitivity analysis revealed that for the non-price sensitive segment, demand remains strong all the way up to $131 – the maximum price we tested – so much so that as a result the revenue maximisation price was at least $131, and the relatively small drop in demand from $76 – the lowest price we tested for this segment – to $131 suggests that it could possibly be pushed further.  Given prices for full-length MSO concerts in the past had a top price of $155 it was reassuring to know that customers still perceived a lot of value in a shorter-length concert.

Graph: For the high price group, demand is strong for the enthusiastic and interested segments regardless of price with the interested group only tailing off at $131.

For the price sensitive segment, the prices tested ranged from $44 to $75. Demand dropped off at 2 key thresholds: $50 and $75 but was sufficiently strong at $67 to result in the maximum amount of income.  $67 is higher than MSO’s previous low price but given the limited capacity from a socially distanced auditorium, increasing the bottom price to $67 helps to sustainably maximise income. 

Many organisations have felt under pressure to lower prices across the board – so we compared the impact on income from reducing the top price from $131 to $94, and the bottom price from $67 to $44 = this would produce a 30% drop in income and generate only an additional 2% in demand. If price is not the obstacle holding some patrons back from buying tickets, discounting is not the answer!

Repertoire, performer and start time preference

Price doesn’t operate in isolation and demand is also driven by the other elements of the offer, which in this case relate to repertoire, soloist and concert start time.  The importance of each of these elements along with price varies by customer.  Understanding this variation means you can pinpoint the most valuable elements of your offer in line with what your customers are looking for, ensuring you’re able to balance value sought with price offered. 

‘Should MSO rely on clasically popular repertoire in 2021?’

In terms of repertoire, the analysis demonstrated that “Classics” were twice as popular as either “19th Century Favourites” or “20th Century Marvels”.  This suggests that a balanced season should be made up of repertoire that is 50% “Classics”; 25% “19th Century Favourites” and “20th Century Marvels” to ensure an even spread of demand across all concerts.

The most popular choice for soloist were those drawn from MSO’s own players rather than other Australian-based artists or non-classical icons.  This is good news for MSO as it gives them the confidence to promote their own talented musicians.

The preferred time of concerts was 7.30pm by a clear margin compared to the next most attractive time slot of 6pm. Almost everyone was averse to a concert starting at 9pm.  But having a concert start at 7.30pm didn’t leave time afterwards for an additional concert in the same evening. 

So, what would be the impact on demand if rather than a single 7.30pm concert, MSO were to present a 6pm concert and an 8.30pm concert on the same night?  Assuming both were priced identically, presenting 2 concerts resulted in only a small increase in demand. However, where the costs of presenting an additional concert on the same night were marginal, and assuming that demand for any one concert would outstrip the restricted supply, then doubling capacity increases volume and helps audiences to feel safer, spreading demand across 2 concerts and maximising revenue.

In Conclusion

Having come up with a proposal for 2021, undertaken the appropriate research to test elements of the plan, understand patron preferences and identify the key price points, MSO are now equipped with the relevant evidence to make informed decisions about their next season. 

They have the confidence to set price points in line with their customers’ willingness to pay at both the top end ($131) and low end ($67).  And what’s more, by overlaying each customer’s willingness to pay against their preferred section of Hamer Hall, MSO are also able to determine what proportion of each section should be high and low priced.

They know what a balanced season would look like in terms of repertoire, that customers are more attracted by the prospect of seeing MSO soloists, and that there is potential to offer 2 concerts in the same evening at 6pm and 8.30pm (provided the turnaround logistics work). 

MSO undertook Patron Preference Analysis, for real-world concerts and digital streams.

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Patron Preference Analysis is based on market research which is usually only available at substantial cost. In recognition of the challenges facing the arts and cultural sector, this research is currently available for a low fixed fee. 

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