Is a revenue emergency taking hold of parts of the theatre sector? With many conflicting demands on theatre managers’ time, Robin Cantrill-Fenwick identifies three key trends to help keep theatres on track.
The role of a theatre manager is multifaceted, complex and laden with expectations. Balancing a wide range of demands – including your mission and vision, community engagement, the goals of funders, the law, the dynamics of the arts ecosystem, climate goals, staff expectations, freelancer expectations, producer expectations… It’s a great responsibility and it would be glib to say these demands never come into conflict.
Amid this whirlwind of duties, monitoring the commercial viability of the theatre is vital. If this slips away from you, all else is lost or, at least, in great jeopardy.
These days when it comes to ticketed events – the main driver of audience revenue in the theatre sector – we’re a long way from the days when the problem was that we didn’t have the data; often there’s too much data to effectively monitor – it’s hard to know when to act.
You may, for example, be watching the run of a particular producer like a hawk because you know they are too – the squeakiest wheel gets the grease. Before you know it, you quickly find yourself pulled from show to show, to show.
Most theatres have many operational KPIs they’re monitoring at any given moment. In this melee, three simple, key, commercial trends – viewed either year-on-year or over multiple years – can offer valuable insights for theatre executives.
1. Number of paid performances on sale
This is such a simple piece of data, but I’ve lost count of the number of times theatre managers are surprised to see this trend when we reveal it to them. A busy stage or tour is the lifeblood of any theatre. Quality is paramount, but the quantity of earning performances not only contributes to revenue but also to the theatre’s relevance in its community and the wider cultural landscape.
A declining trend in performances may indicate programming, funding or logistical issues need to be addressed – or it may be that soaring energy and other costs are biting hard. It’s important to check whether a focus on cost control could also be damaging your earning potential in the round.
Depending on the theatre’s programme, it may or may not make sense to include workshops and learning programmes in this data. You know your own revenue mix better than anyone.
2. Paid percentage of capacity sold
You probably look at the percentage of seats sold in-season all the time and write up the overall picture for your board or funders. The reality, though, can sometimes be clouded by comps and reservations, so it’s important to monitor the paid percentage separately, and to pull back and look at the trend.
The percentage of capacity sold is a direct measure of audience demand and engagement. It highlights the baseline effectiveness of your marketing and sales strategy, the appeal of your programme and your alignment with audience preferences.
A declining trend on this measure might suggest a need to re-evaluate your offerings, pricing or marketing approach. On the other hand, a high or increasing percentage indicates successful engagement and could open opportunities for further audience or revenue growth.
3. Yield per capita
Finally, the average amount paid for a ticket – the ’per cap’ – provides insight into the financial health of the theatre. It reflects the balance between pricing strategies and audience willingness to pay and can highlight trends in the economic demographics of your audience.
A downward trend might indicate a need to re-consider ticket pricing or audience targeting – prices may need to go down as well as up – while a rising trend suggests a growing audience value perception or increasing purchasing power.
This trend is often best looked at in comparison with the average price of your tickets: Is the amount actually paid keeping track with the prices advertised, or do offers and concessions create an excessive ‘discount drift’?
It’s the fundamentals
While these three trends offer a streamlined view of your theatre’s commercial health, they are not an end in themselves. They are tools that can guide strategic decision-making process and provide a starting point for deeper analysis. They’re fundamentals that are often looked at in isolation, rather than as trends.
Think of them as a health check that keeps you attuned to your theatre’s commercial heartbeat amid the cacophony of demands and pressures that come with leading an organisation. More than that, they are useful indicators when forecasting whether (or not) you are on track to meet budgets.
It’s crucial that any trend data be viewed in the context of other information. If you see a falling percentage paid cap sold, or a falling yield per cap, for example, and know it’s because you purposely introduced a new concession which drove additional volume, or you were persuing a particular artistic objective, then the numbers may be OK – you’re in control. Monitoring these trends may lead you to dig deeper into other data such as audience frequency, churn and diversity. You may find yourself questioning the balance of your programme or your pricing structures. This exploration is not only normal but beneficial.
Balancing the artistic, community and commercial elements of theatre leadership is undoubtedly challenging; there is never any shortage of fires to fight on any given day. It’s also important to recognise that for much of our industry, tickets are not the only source of revenue. But, for many, they are the difference between success or failure.
By keeping an occasional eye on these three trends you can be more confident in the fundamentals of your financial model, ensuring your theatre remains a vibrant, engaging and sustainable cultural hub for years to come.
This article was first published in Arts Professional