Focus Issue: New Approaches and Alternative Sources of Revenue
Five projects were launched as part of our 2013 Learning Network:
Acting Up Stage Company transformed their annual Koerner Hall concert series into a social enterprise and expanded it into a three-day event.
Art of Time Ensemble built a robust online hub around their company’s archive of audio and digital recordings.
Tafelmusik revamped their online presence, streamlining customer interactions through the introduction of a new online sales platform.
TAPA partnered with ArtsBuild Ontario and WorkInCulture to launch SpaceFinder Toronto, a searchable online database of creative venues that acts as a revenue-generating opportunity for local production companies.
The Toronto Fringe created a crowdfunding site to support independent theatrical productions participating in the Fringe, and launched a comprehensive app for festival attendees.
While their projects were certainly diverse, common insights arose from the 2013 Learning Network. Click below to read.
1: Begin by defining the relationship.
Is the new revenue generating activity an amplification of a core practice for the organization? Does it run parallel to existing programming? Or is it something completely unique?
Projects that drew upon current resources or complemented regular activities were generally simpler for companies to manage. Acting Up expanded its annual fundraiser into a three-day event, allowing them to build upon a strong foundation of existing knowledge and resources. Although Spacefinder was a new initiative, the three organizations behind the project each brought specialized skills and assets to the table that helped to minimize their learning curve.
“We have an extraordinary archive of video and audio recordings. As a small company, we thought it would be smartest to leverage this existing asset as a means of driving ticket sales.” – David Abel, Art of Time Ensemble
2: If you build it, they may not come.
As important as a good digital product is, it likely won’t reach its target audience without a strong, well-informed marketing plan that prioritizes ongoing evaluation and flexibility.
Tafelmusik constantly tested the efficacy of its new online store through in-page analytics and digital ad buys, and then used these findings to streamline the site’s design and ensure an easy purchase process. Art of Time chose to bring on a staff member who specialized in marketing and communications to ensure that their new website became the active cultural hub that they envisioned.
“We’ve had to find ways to make this exciting and comfortable for group attendees, and not operate under the assumption that the show is the driving factor in that purchase choice.” – Marcus Mitchell, Acting Up Stage Company
3: Test, test, test.
Participants in the Creative Strategies Incubator were encouraged to explore new approaches and to alter their strategies based on the lessons from their continual evaluation.
Acting Up considered cold-calling corporate clients to be their key strategy for selling ticket packages to their fundraising concert. However, they soon found that individual buyers with existing relationships to the company were by far the more responsive demographic. The Toronto Fringe Festival’s app was intended to make the transition between discovering a new play and purchasing a ticket a seamless process. But mixed feedback from their patrons led them to change tack and choose an entirely different ticketing system.
“Resources and data are out there for all these digital solutions. The sooner you wet your feet and test things out, the sooner you’ll be able to make informed decisions from a place of knowledge, rather than one of assumption.” – Réjean Tremblay, Tafelmusik
4: Plan your exit strategy.
What do we mean by a project’s “sustainability?” For some organizations, it may mean that they’re able to continue running their revenue-generating project after the completion of the Learning Network. For others, it means the project will fund core operations on a continual basis.
Metcalf’s goal is that the Creative Strategies Incubator experience triggers a fundamental shift in organizational thinking. Participants will be able to determine which future revenue-generating projects present strategic opportunities for their organizations, how the projects can be effectively evaluated, and whether their continued operation will help the organizations meet their long-term revenue generation goals.
“Undertaking new activities makes us busier, puts pressure on the organization, and adds scope to our overall operation. Will this added staff time or need for additional resources really level off in the longer term? And if it’s not everything we hoped, are we prepared to pull the plug?” – Kelly Straughan, Toronto Fringe Festival
Click on the company logos to read more about the group’s projects and achievements. You’ll also find short videos that document and reflect upon each funded initiative.
Acting Up Stage Company
For over ten years, Acting Up Stage Company has brought together acclaimed performers from Broadway, London’s West End, Stratford, Shaw and Mirvish to reimagine the music of legendary songwriters for the company’s Uncovered concert at Koerner Hall.
Through extensive market research, Acting Up found a viable business model to re-examine their annual concert as a social enterprise, adding performances and positioning it as a unique client and staff hosting opportunity for small and mid-sized corporations.
Over the course of four concerts (2013 through 2016), the company sought to gradually grow a single night into a three-night event and, subsequently, increase net revenue from $10,000 to $50,000. In the final two years of their participation in the Creative Strategies Incubator (2015 and 2016), Acting Up also aimed to capitalize on their relationships with new corporations and examine the possibility of converting them into program sponsors for other activities — leading to an additional $30,000 in revenue. The support from Metcalf covered the cost of building the infrastructure for this new initiative before the profits from the concert allowed the company to self-sustain.
Questions and Answers (Click to Read)
It is still early days, but I am very proud of our promotional video. We worked closely with contacts from the corporate sector to create something that showed what we do in the best light artistically, while also addressing the concerns and needs of the target market we are soliciting. I think that the final product is a dynamic, concise and highly effective 3-minute sales pitch.
We are always concerned about revenue. While we have enjoyed healthy attendance records, the economics of musical theatre are pretty challenging with over $150,000 to fundraise outside of ticket sales revenue for each production before factoring in administration and overhead. We have exhausted public and private support and so we felt that we needed to find several new streams of earned revenue to strengthen our portfolio. As a company that has undertaken several new capacity building initiatives in the last five years, I felt strongly that we needed to find something within our core activity, rather than introduce a new endeavor as a separate social enterprise that would put tremendous strain on administrative resources. So we simply looked at the budgets for each program. Our concert was the one that was most revenue positive without a reliance on private or public support, and so we started investigating possible avenues to make it even more profitable. After talking to industry experts and surveying the corporate community, it seemed like we might have a way to package the event in a particular way for a particular niche that is underserved by the arts.
There is an appetite for client hosting opportunities. While the budgets for corporate sponsorships continue to be challenging to access, corporations have large budgets set aside for client hosting. For the most part, this funding is not going to the arts. Companies are looking for unique experiences, opportunities that will leave clients satisfied, opportunities that mix entertainment with socialization, and experiences that cost between $100-200.
Entertainment and overall experience needs to be valued more highly than artistry. Unfortunately most clients who attend events don’t have any context of what they are attending in advance (many show up and say “what am I at?”. The corporate host wants their guests to have an amazing time and they invite a diverse group of people with differing artistic sensibilities. As such, one has to carefully examine what performance is being offered. Will it have mass appeal?
How do you break through to people in the age of constant information? Part of the appeal of this initiative is that it is targeted. Rather than trying to reach the masses, we make a connection with a key decision maker who in turn makes a purchase for hundreds of people. However, even with a more focused list of prospects and a great sales team, it is very difficult to get people to pay attention – to actually show up to a sample event, to watch a video, to return a call. Once we get someone ‘hooked’ they are very interested to learn more, but getting them to give it serious consideration is challenging.
Sharing Our Learning – 2015 Public Forum
Art of Time Ensemble
In devising their funded initiative, the Art of Time Ensemble took inspiration from the Grateful Dead’s pioneering “freemium” concept, which created concert revenues in the hundreds of millions of dollars by giving away their recorded music, and by Arts and Crafts records, who drive sales of their core product – recorded music – through the “memento-ization” of the fan experience.
The ensemble sought to create a fully-curated web destination or “culture hub” that was built around their large archive of audio and digital recordings and new content created under a partnership with The Banff Centre. The intention was to use this content to leverage concert revenue.
Art of Time’s new website would offer free audio and video content, premium audio for purchase, a merchandise line, and the opportunity to purchase discounted tickets packaged with meet-the-artist events, free recordings, and complimentary merchandise.
Questions and Answers (Click to Read)
We felt that we had a product that was worthy of wider appeal, and were frustrated with lack of tangible results that the no-man’s land between traditional (read: outdated) marketing approaches and the new frontier of online marketing was giving us. We have also experienced frustration in trying to communicate exactly what we do at Art of Time Ensemble, and given that we have an abundance of recorded material, and continue to make audio and video recordings of every performance, we decided that we’d try to show rather than tell our potential audiences what we do.
We also wanted a soft-sell approach, wherein the art does the talking. Permission-based marketing is important to us, as well as moving towards data-driven decision making. Our “culture hub” approach facilitates both of these ideals.
Landing on the firm that will create the culture hub we are seeking. The Young Astronauts, who had been doing our video recordings, are also web developers (unbeknownst to us) and have been working on the websites for some of the biggest names in the recording industry. They have jumped on board with great ideas on how to develop user-curated audio and video experiences; they made us dream about our very own Rdio or Songza. Because they create websites for so many artists and management companies, they have developed a back end that is their own, and is customizable very easily. Therefore, we can stay within budget, and spend most of our money making the site interesting and beautiful.
That preparation, research, and allowing enough time for ideas to develop into realistic and achievable plans is essential to success.
Don’t let the immensity of the undertaking dissuade you from trying. Once you jump in, the realization that it is possible - however difficult the process and scarce the resources - will provide the motivation to see it through.
The first question was certainly “Did we make the right choice with this approach?” As each day passes, I become more convinced that the answer is yes. Another question that has been hanging over my head is the effectiveness of our plan to attract visitors to our site when it launches in the spring. Building the field of dreams alone will not alone be enough. “Marketing the marketing” will likely prove to be our biggest challenge.
Sharing Our Learning – 2015 Public Forum
Fringe of Toronto Theatre Festival
The Toronto Fringe’s initiative was Fund What You Can, a crowdfunding platform geared toward independent performing artists.
Under their model, anyone with a project would be able to create a campaign, platform fees would be set among the lowest on the market, and 100% of funds generated by the Fringe would be reinvested into their own company to support Toronto’s independent theatre community. The Fringe would also offer hands‑on support, accessible resources, and free crowdfunding workshops to Fund What You Can participants.
Questions and Answers (Click to Read)
Metcalf’s proposal through the Creative Strategies Incubator program provoked some "out-of-the-box" thinking for us at the Fringe Festival. We asked ourselves – "What do we already do really well?", "What could we do that would be of value to us as an organization and to our community of independent artists?", and "Can we make it sustainable?"
Our process of developing the crowdfunding site has transpired ahead of schedule and we’ve officially launched the site – Fund What You Can. This is a huge milestone for us. With 30 companies already registered, it feels right – like we’ve responded to a real need, and that our decision to pursue the creation of the platform is being met with enthusiasm by producing indie artists.
We’ve certainly learned a lot about technology, especially in the process of developing the new app. For example, I now know the difference between a native app (an app that stores data within the application itself) and a web-based app (an app that requires data to be accessed through an internet connection). The difference has a big impact on functionality and user experience. It only takes 3 seconds of wait time before a user will bail on the engagement. How impatient we’ve become!
In developing these tools, we’ve really aimed to look at them from every possible angle, through the eyes of every stakeholder – to make sure we’ve really applied the necessary scrutiny before investing time and effort. It’s easy to fall in love with ideas, but it’s much harder to be wiling to let them go if they really don’t work or don’t make sense after all.
As our initiative progresses, the hardest question we have to ask is, "Is it sustainable?" Undertaking new activities makes us busier, puts pressure on the organization, and adds scope to our overall operation. A bigger investment of time and money is required up front to promote the tools and ensure a real need is being met in the community. But in the longer term, will this added staff time, or need for additional resources really level off in the longer term? And if it’s not everything we hoped, are we prepared to pull the plug?
Sharing Our Learning – 2015 Public Forum
Tafelmusik’s strategy to generate revenue was multi-pronged and interdependent:
- Researching and implementing strategies to create an integrated online sales platform that allowed for cross-promotion and suggestive selling for concerts and recordings, so that added products would be purchased in the original customer transaction.
- Building a flexible and user-friendly mobile platform that allowed smartphone or tablet users to access Tafelmusik quickly and easily.
- Building the capability for online distribution and sales of digital recordings through tafelmusik.org using search engine optimization.
- Creating ticket and recording purchase opportunities through social media, and using Facebook’s music integration strategy to produce an exponentially increased number of music recommendations.
The company also sought to investigate crowdfunding through platforms such as Kickstarter and Indiegogo for up-front funding of innovative projects, so that customer sales would represent a net income contribution.
Questions and Answers (Click to Read)
First, it was the need for revenue and audience development that motivated us to get working on this project. Our changing financial landscape includes costs that are increasing, but ticket sales, donations, and grants that are leveling off. We have a great subscription base, but have a challenge getting new people in. In addition, ticket prices at Tafelmusik are as high as they can go. We need to develop alternate streams of revenue to sustain our artistic growth. On the positive side, the launch of our own recording label in January 2012 has opened up a revenue opportunity for us to retain more of the profits from recording than we ever could in the past.
Our audience development priorities also mean that our practices need to match the buying habits of a younger demographic. We know that Tafelmusik will be left behind in our digital world if we don’t adopt modern web practices including a website adaptable to all devices; easy online sales of recordings and downloads; and a streamlined checkout for ticketing and donations. These things are not a “nice to have” any longer – the consumer expects them. Our current system for ticketing and online donations is patchy, inconsistent, and not easy to use. We have no system for digital download at present, and online sales of physical CDs is extremely “clunky.” Of course, on the positive side, we are ripe for expansion on the internet given our international model: not only do we have a Toronto season, but we tour internationally and have many recordings available around the world.
We have done significant research into ticketing systems that will allow us more optimal sales, social media audits, search engine optimization, and record distribution with a wide range of experts. As we were doing our research, we also needed to refine our priorities and determine what needs ot come first. We really started to move forward after we met with Daniel Bernhard (one of the project “sherpas” or mentors), who helped us clarify our direction.
In a world of tablets and “super” phones, our current purchase mechanism does not keep up with the buying patterns of the next generation. It is not friendly to online sales or donations: the system cannot process online donations the way we want, nor can it sell physical product CDs or downloads. It also cannot effectively sell subscriptions online. Our ticketing system is a major roadblock.
Two members of the Tafelmusik team went to the major North American ticket conference –INTIX – in January to look at what systems are out there that might help us with all our online sales needs in one shopping cart. We realized that we were going to have to move forward with the project in the context of eventually changing our entire ticketing system.
We are now going to look at a new ticketing system for 2015 or 2016 so that we can offer a seamless purchasing experience for tickets, donations, subscriptions, physical CDs, and digital downloads. In the meantime, however, we know we need to move ahead immediately to make our website more responsive to all devices, to offer digital music downloads through our current website, and to maximize the suggestive selling capabilities of our current system so as to increase the average revenue per person.
At the INTIX conference the need for mobile-friendly sales channels was driven home. Some arts organizations are seeing up to 80% of their sales online, and almost every conversation was about mobile devices and how they are used. Our customers are expecting to be able to do it all by phone or tablet as well as by desktop/laptop. In addition, the audience development is a key growth area for Tafelmusik – if we want to attract a younger demographic, we need to have sales channels that match their buying patterns.
First, do the research. Information is key: talk to the experts and your colleagues. Getting more information changed our outlook on the project. Ask the right questions. "Why would you do that?" "What does the customer want?" "How does your customer experience your sales channels?"
Secondly, always connect the project to your overall strategic goals. This has helped us focus on key priorities: selling tickets and music.
There are a few questions that have come up:
Where do we need to focus our attention in order to make the largest revenue gains?
Will people download music from tafelmusik.org rather than iTunes or another established retailer?
Who is our market for recording sales? Our current patrons? Or other audiences? How much will they buy?
Do we have the right tools for tracking success online? (Right now we cannot track conversion to sales through our online ticketing system.)
What can our current ticketing system do for us in the next 2 years? What tools are offered that we are not actually using? (We found out that we can do some suggestive selling and that we can have interactive seat maps in our current system.)
What are our key performance indicators? What do we need to measure to make sure our strategies are achieving results?
Sharing Our Learning -- 2015 Public Forum
Toronto Alliance for the Performing Arts
TAPA, ArtsBuild Ontario, and WorkInCulture joined forces to create new revenue opportunities not for themselves, but for the broader performing arts community.
TAPA and ArtsBuild Ontario negotiated with Fractured Atlas, an American arts service organization, to bring their acclaimed online venue rental system to Canada. SpaceFinder is a database and a marketplace that builds invaluable information about arts organizations and allows those with available spaces to connect with prospective renters. Meanwhile, WorkInCulture sought to create appropriate professional development resources to help the arts community maximize their facility rental revenue.
Questions and Answers (Click to Read)
We were motivated to respond to a need for increased self-sufficiency that has been identified in our arts community. We wanted to provide a service that we believe can have a positive impact and outcome in terms of earning revenue for our community.
The main accomplishment to date has the been the process in and of itself and our day-long workshop in November with Fractured Atlas.
Take your time. Do the groundwork. Understand the importance of critical mass for a database system.
Be bold! The collaboration among our three orgs – TAPA, ArtsBuild, and WorkInCulture – on this project has been very fruitful and integral to the process. Work at collaborating by understanding:
• clearly defined roles,
• transparent and continuous communications, and
• honouring the "people factor."
What is the best way to attract stakeholders, and how do we engage new partners? How do we execute/achieve sophisticated marketing on a limited budget?