Opera Australia AGM – a further retrospective

I have previously posted about the Opera Australia 2010 AGM, and referred to its 2010 Annual Report and Financial Report.

The meeting and the company’s results were covered by Raymond Gill in the Age and Bryce Hallett in the SMH.

Raymond Gill said, amongst other things:

In the Sydney summer season last year, admissions to the opera fell from 86,518 in 2008 to 77,860. Admissions fell by 32 per cent in Melbourne’s autumn season, with 45, 917 people going to the opera compared to 68,454 the year before.

These are the figures in the Annual Report.

Bryce Hallett wrote:

The top-selling shows last year were Graeme Murphy’s new version of Aida and the perennial crowd-pleaser The Mikado, starring Anthony Warlow.

The company’s Melbourne box-office income was worse than Sydney’s, including a new staging of Stephen Sondheim’s A Little Night Music, which failed to meet expectations. About 14,000 tickets were sold for its 21 performances at the Arts Centre against almost 32,000 tickets for Madama Butterfly’s 23 performances at the Opera House. A Little Night Music , starring Sigrid Thornton and Warlow, opens the Sydney winter season in June.

Unless you were reading carefully, you might have missed a subtle distinction here. Raymond Gill refers (as does the Annual Report) to “attendances.” Bryce Hallett talks about “top-selling shows.” The annual report does not give any figures as to how many tickets were sold. Nor does it provide a breakdown of “attendances” for individual productions.

I would be interested to know exactly what information Bryce Hallett was given, being information which was not provided to members of the company. My guess is (because otherwise, how could he say what shows were top-selling?) is that it was the company’s box office analysis.

As a company limited by guarantee, Opera Australia is a public company. If it were a listed public company, such selective leaking would be distinctly non-kosher behaviour. Opera Australia is different and those principles do not apply in the same way to it because, as it is a company limited by guarantee, its members are not shareholders and there is no question of the value of their investment or the protection of the integrity of the market in those shares.

Incidentally, this is one reason why I do not agree with Dr Switkowski’s justification offered at the AGM of the board’s approach to appointing new members by analogy with the conduct of the boards of other public companies. Cosy board conduct on a listed public company is subject to ultimate sanctions of shareholders voting with their feet on the market or actually voting according to the value of their shares to protect the value of their investment. Moreover, the board of a company limited by shares has a historical mandate from its shareholders which distinguishes itself from OA’s self-selected incumbents.

Bryce Hallett also had something to say about the management consultants report commissioned last year by Opera Australia:

A review of Opera Australia’s operations by L.E.K. Consulting found that the company was hard-working and productive but recommended several options concerning ticket prices, yield management and programming. It advocated that revivals of more popular operas be turned around more quickly.

Most of this was based on a paragraph in Dr S’s chairman’s report, though I haven’t been able to track down the basis for the point about turning around revivals of popular operas more quickly. Mr Collette said that “LEK made a number of recommendations for increased revenue generation through box office and development, which we will evaluate carefully.”

It is the point about “yield management” which particularly intrigues me. I think that means, as for airlines, how to maximise the bums on seats and, in particular, how to sell hard-to-shift seats for the best monetary return. Airlines mostly do this by lowering the price. It is far from obvious that the best approach to this is to give those seats away or to sell them at concessional rates to employees of the company and their friends. Andrew Byrne has complained about evidence of this practice on a number of occasions. I too have occasionally commented on this blog about Opera Australia’s failure to take an imaginative approach to selling tickets of less well-supported productions. It seems they would rather give the tickets away (or sell them cheaply) to their staff and their friends than sell them at a cheaper price than the initially offered price to a broader public – which I suppose is thought to risk devaluing the brand.

Amazingly, I learnt after this year’s meeting (and so, not entirely by accident in my view, too late to raise at the meeting) that for every ten paid ticket-holders at the mainstage productions there is one person who is not. Some (but surely not much) of this will be promotional comps. Perhaps it also includes student rushes, but mostly I expect it means the free list or company rush.

That’s pretty shocking.

It isn’t across the board: few tickets are given away or concessionally sold for the box office hits, but conversely, the proportion of such attendances must be considerably higher than 9% for those shows which are not pulling in the paying punters. Surely some of those seats could be sold at better rates than that if the company were just prepared to face up to facts earlier and lower its prices, if not to the world at large, then to targetted groups including those where there may also be audience development advantages.

To take the example provided by Mr Hallett above, the average ticket sales in Melbourne for A Little Night Music of only about 700, in a theatre with a capacity of just over 2,000, must have been apparent long before the end of the run. Even if the company doesn’t want to cannibalise its existing or potential future sales, then perhaps it could offer extra tickets to its subscribers and others who had already bought tickets and who are contactable by email. But it needs to do this sort of thing early enough for there to be takers at a reasonably rewarding price. There is an element of judgement here of course, but at present if the company holds out for big sales at full price and they don’t come, then it’s handouts or near-handouts for the staff and their friends all round. Nice for them, but in its own way a kind of rentseeking on their behalf by default, and not really good for the company.

To take another example, I am sure something could have been done in this way to rescue the sagging sales of and disappointing attendances at Werther and Lady Macbeth in last year’s Sydney summer season.

I don’t want to anticipate what the company’s next “unpopular” work will be, but I don’t think many works are unpopular at any price. It would be good if, when the time arises, we can see signs of a more flexible and creative approach to this issue than there has been to date.

2 Responses to “Opera Australia AGM – a further retrospective”

  1. ken n Says:

    Selling an unpopular opera – or any musical work – is tough. You can pretty well assume that nearly all your potential audience knows about it so communication to increase awareness isn’t going to accomplish much.
    You need to give those who have thought about and rejected it a reason to come.
    With “modern” works that’s particularly difficult. So many music lovers “don’t like that modern stuff”. ( A friend of mine said “I’ve had some bad experiences with Janacek) as he left at interval of a concert).
    I’ve always thought that a campaign along the lines of: Are you game for this? Are you willing to be shocked, challenged? You just might discover something new and important.
    In other words, a challenge. Perhaps with a money back offer.
    Cutting prices will fill a few seats but not many I suspect. Some experiments in creative pricing are probably worth a go.
    I was surprised at the 10% comps (was that what was said?) Seems high as an average.

  2. marcellous Says:

    Ken

    It wasn’t clear to me whether “10%” (actually more like 9% or 8.something%) was just comps or (more likely and giving the company the benefit of the doubt on this) comps plus company rush and various other “rushes” such as student rush and maybe the deal you can get if you take an Opera House tour. The figure is based in the difference between total “tickets sold” and the “attendances” as given in the annual report.

    The money spinners have very few comps and probably no company rush at all, so it really means that operas such as Lady Macbeth of Mstensk and Werther had far more. Even then there were very empty actual houses for these works on some nights, which means the company rush approach was insufficient to generate attendances.

    In those cases, that should have been tackled by some direct email offers offering tickets which are expensive than rush but still a lot cheaper than usual prices. Such offers need to be made sufficiently in advance for people to take up the offer. The company could experiment with the timeframe – it would probably need to be at least a week out – any later than that, you’d need to offer a deeper discount to get much of a response. Another approach would be to offer cheap seats to people already going on particular nights – they could bring an extra friend. All of this just requires someone with the requisite authority to be monitoring the box office and appropriate software and key strokes to generate the emails.

    Werther wasn’t modern, just unknown. Same with the early part of the run for Cosi where, indeed, I was fortunate enough to benefit by reason of an association with someone involved with the production.

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