A False Economy

 The economy of arts organisations in the UK is based on a trinity of finance streams: investment from the public purse, philanthropy and sponsorship from private individuals, and income earned from sales and trading. Current campaigns are firmly focused on persuading the government to maintain the first and enable the second. But what about the third element: sales, particularly ticket sales? When it comes to interventions to make sure that this third stream flows freely, arts organisations are largely silent.

 BUMS ON SEATS

Our current custom and practice for the pricing of tickets in subsidised venues creates a distorted market which not only fails to maximise earned income but can also deter potential audiences. We have created a false economy which is understood by the largely educated, better off and subsidy-savvy theatre-going cognoscenti but less so by the rest of us. We have a false ceiling on the top prices, which does nothing to engender ownership in our local communities.

From the customer’s point of view, the practice of buying a theatre, dance or concert ticket in a subsidised venue is curious. It’s obviously not the same as buying a commercial product. The price of a ticket does not necessarily reflect its perceived value. What is described as a ‘hot ticket’ in a subsidised theatre will most likely be charged at the same price as any other piece of drama in a season. While the commercial sector maximises income with premium tickets, the subsidised sector turns away from this, based on a principle that public subsidy should be used to keep a false ceiling on the price of a ticket. It is this principle which means that a top quality dance class presented by a regional dance agency may cost less than an inferior one by a non-subsided competitor.

BEND OR BREAK?

Our arts funding system still has one foot firmly planted in the days of free school milk and dental treatment free to all. Subsidy is applied to all audiences, whether or not they want it or need it. The price of tickets for performances at subsidised theatre is connected neither to the cost of creating the work nor to the ability to pay of some of the audience. There are other symptoms of this attitude that subsidy is a state benefit to be applied by those who know better. My particular bug bear is the inflexible attitude taken by most venues regarding exchange of tickets. Tickets, they clearly declaim, cannot be refunded or exchanged, signalling their status as part of a rigid system of rights rather than a commercial customer-friendly transaction. For the non-subsidy-savvy potential customer, used to being able to pay a premium or charge for flexibility when buying an airline ticket, this rigidity may well serve as a deterrent.

The laudable principles of using state subsidy to keep prices low are based on a belief that state subsidy will ensure an equality of access. But the evidence points in another direction. The current system of arts funding is unfairly weighted towards those people who could afford to pay. Subsidising all theatre tickets means that public taxes are more likely to be used to subsidise the arts experiences of higher earners than those of lower earners. In its major research study, ‘Taking Part in the Arts’, Arts Council England found a significant demographic gulf in regular arts attenders. Put simply, the more income one earns, the more likely one is to participate: 68% of people in the higher groups attend and 47% of the lower groups. The current practice of maintaining a false ceiling on the top ticket prices means that disproportionate subsidy is applied to those who are least in need.

Let’s take an example of a very good and successful regional producing theatre, supported by the public purse to the tune of £2.5m for its core programme. It sells around 170,000 tickets each year, from £12 to £30, and it takes £2.5m at the box office. Using a blunt calculation, each seat is subsidised on average at £15. The difference in price between a full price ticket and a concessionary ticket – for unwaged, over 65s, students, under 18s etc in most theatres is marginal – no more than 20%. Every ticket is state subsidised. Many producing venues have a much higher subsidy per seat than this theatre and some have a lower one but all but the very few commonly subsidise almost every attendance. But should they? How many members of the audience would be happy, willing and able to pay more and to recognise the value and cost of putting on the production? And if they did pay more, how could the additional revenues be used to subsidise those who really can’t afford to pay, or have had no experience and hence are unable to judge?

If public investment is to be viewed as an essential public service, arts attendances could be free for the needy and the under 18s, and those adults with the wherewithal could pay full price. Of course, simply doubling ticket prices would be a crass intervention and the application of a system whereby subsidy is applied as a state benefit according to need, like dental care, would require sensitive handling. Free tickets in themselves do not create new audiences. But unlike one-off schemes, a universal system to make arts attendance a regular habit could have longer-term benefits.

Of course there are ways other than pricing which would allow individuals to make a greater contribution to the costs of their local venue through greater community ownership. We need to ensure that we can invest in and support research, development, the artist and put public money where there is no other investment possible. And that could mean an end to subsidising every ticket.

Anne Bonnar explains why subsidising every theatre ticket helps the better-off more then it helps those on low incomes

We have created a false economy which is understood by the largely educated, better off and subsidy-savvy theatre going cognoscenti but less so by the rest of us