 I had to pee so bad. Hi, everybody. That's loud. OK. Unfortunately, well, not unfortunately. Fortunately, we need to be on mics because it's very echoey. We need some like club music. Because we are live streaming with HowlRound. Everybody say hi, HowlRound. Yes, hi. Before we get started, what I'd love to do is do some quick introductions down the pike. And then I'll let you know what this panel is all about. And then we'll get rolling. Why don't we just give our name, pronouns, title, and theater? How's that? Yeah, my name is Lisa Portez. I'm with the TCG board. I'm a director, and I head the MFA directing program at the Theater School at DePaul University. Hi, I'm Maria Manuela Goyanes. I am the artistic director of Willie Mammet Theater Company in my ninth month. And I use she, her, hers pronouns. Oh, yeah, yeah, yeah. I was at the public theater in New York City running the producing department for a good bit. Hi, I'm the Taki Garrett. I am the incoming artistic director at Oregon Shakespeare Festival. I was, thank you. I was formerly the associate artistic director acting as artistic director at the Denver Center. My pronouns are she, her, hers. And I'm a board member of TCG. Hi, Blake Robinson. He, him, his. I am going into my eighth season as artistic director at Cincinnati Playhouse. Oh, gosh. Hi, everybody. I'm Megan Pressman. My pronouns are she, her, hers. I am finishing my fifth and final season as managing director of Willie Mammet Theater Company. And in July, I started as the managing director for Center Theater Group in LA. And I'm also on the TCG board. Rachulfer, I'm the executive director of Goodman Theater. And before that, I was a student at the University of Notre Dame. That's amazing. Thank you all so much. Oh, he, him, his. And I'm she, her, hers, I forgot. Thank you all so much for being here. This panel came about because as I've been looking at the field for the last couple of years, we've been seeing tremendous leadership change across the field, field-wide investment in ED&I values, and the kind of ongoing desire for and need to create new audiences. And at the same time I've been hearing, but the subscription model, the subscription model, the subscription model doesn't work. And so I've been thinking about what economic models do we need to develop or begin to think about in order to support the kind of innovation that I knew each of these artists and many, many artists and leaders in this room want to affect as we move into the theater we are becoming rather than the theater that we have been. And so I just started talking to people. I started talking to Rock about it. And he indulged me with a good amount of time. And then I got to Blake about it. And I was, you know, and both Blake and Rock run theaters that are really dynamic and in very different communities. And then was wondering, like, what's the special sauce at the public theater? And maybe Maria will know about that. And also what she learned at Willie Mammoth and what has Megan learned at Willie Mammoth that she's going to try to take to CTG. And Nataki, who really innovates, therefore, she is, what is she thinking about going into OSF? So therefore, we have these fantastic panelists. I'm so glad that they're here to talk with us. Couple of quick things. We are live streaming. There is often press at the conference and social media. So if anybody wants to say anything that they want to be off the record, please just say off the record, and hopefully everybody will respect that. We also have a short session. So rather than doing a question and answer at the end, we'll do questions and comments as we go. That means we may not get to all of them, but hopefully we'll keep the conversation going at the many events at the bar and elsewhere. All right? So Rock has been obsessing about this for a while and has done a lot of research and put together a talk that some of you may have already heard at the Fall Forum last year, at the TCG Conference last year, at this year's Lort Conference, at League of Chicago Theaters, and many, many other places. And he's agreed to give us a kind of short TED Talk version of why not for profit theater, the economics of the performing arts and business models in the American theater. Well, thank you, Lisa. Thank you, Lisa. Twisted my arm to come down here and do this. And I'm grateful to have the opportunity because I'm really, I don't know, I'm sort of on my own quest to get this information out. I was an economics major at Notre Dame. I didn't really come into this business as a theater person. I've had the great good fortune to work with Robert Falls and his artistic team for 30 plus years. And during that time, the Goodman has developed a reputation for artistic innovation, for diversity, for proactive civic engagement. But a few years ago, we started having discussions about how are we going to continue doing what we want to continue doing in the face of increasing revenue challenges, particularly revenue challenges from the box office, ticket revenue. And then I started to talk to colleagues around the country and found that we weren't alone in this. There were places where there was systemic kind of mission erosion starting to take place as theaters were not able to do the innovative work they wanted to do. They were having to fall back on the familiar to try to generate revenue at the box office. So I went back to basics. I worked with a brilliant trustee of ours who was a past chair and a chief economist at First Chicago Bank and ended up with this talk that I've given a number of times over the past year and a half. And so, yes, here's the, well, it's going to have to be the eight minute version because I just spent two minutes introducing it. So anyway, what I've learned through this process is that trustees, the philanthropic community, the media, the audience, and theater practitioners, and by theater practitioners, I mean all of us, artists and people behind the scenes, are largely unaware of the economics of live theater and the business models that dominate our industry. Basically, there's a limited knowledge of how not-for-profit theater functions as a business and little distinction between the commercial and not-for-profit models. This talk is largely designed for trustees, but I have found that it really resonates with theater practitioners as well. And I can tell you the frightening thing about giving this talk is how little people outside of practitioners in the industry recognize or acknowledge the difference between commercial and not-for-profit theater. The simple answer is, they don't. So the result is that the actual cost of producing theater, especially new and innovative work, is not well understood. Particularly in theaters where compensation is provided to theater practitioners. And we're talking about vocational theaters, where people are trying to provide careers for artists, careers for theater practitioners. This has led to unrealistic expectations for ticket sales revenue, ticket prices, and underestimating the contributed income actually required each season. Now to begin with, we have a problem in our industry, as I indicated, because we have a commercial and not-for-profit theater. What's up with that? Have you ever heard of a commercial symphony orchestra or a commercial opera company? And yet in our performing arts industry, we have this bifurcated industry, commercial and not-for-profit. So one part of our industry is dedicated to enriching individuals. And one part has the goal of supporting artistic innovation, providing community service, and in many cases, changing society. So these are very, very different business models. So why not for-profit theater? Or as a staff member said to me when I was trying out this speech, why not for-profit theater? The commercial theater is represented by Broadway. It's a hugely successful theater brand. It is the theater brand in our country. There was a recent Times article that said the most recent Broadway season was the most successful ever. Attendance up 9.5%, grosses up over 10% to 1.8 billion, with attendance on Broadway of 14.7 million, and that doesn't account to 17 million who went to Broadway shows on the road. So the Broadway business model is based on returning a profit to investors. That's its goal. Maximizing revenue, minimizing risk. The goal is to present productions that have so much audience appeal that they are virtually invulnerable to price resistance. And that's particularly true now in the age of dynamic pricing. The Broadway model is based on the producer presenting one production at a time. Each one is a new business. They're not really that industry oriented the way we are. I mean, this kind of diverse gathering would really never occur among the league of American producers. Anyway, but the result is that most of Broadway is based on musicals, revivals, adaptations of known material, stars, and successful British imports with an average ticket price of approximately $120 and a median premium ticket price of $275. So despite the goal of maximizing profit and minimizing risk, the financial failure rate on Broadway is still between 70 and 80%, depending on what figures you believe. Why does the Broadway model persist if it's so unsuccessful? It's because when it does succeed, it's unimaginably financially successful. So when I have more time, I do a quiz about the top grossing movie and the top grossing Broadway musical of all time. Well, we'll skip the quiz part. The top grossing movie of all time currently is Avatar. It's still there at 3.3 billion. The top grossing Broadway musical of all time is The Lion King. Anyone wanna take a quick shout out? How much The Lion King has grossed $8.2 billion, more than twice what Avatar, the top grossing movie has grossed. And Wicked and Phantom are both above Avatar as well. So the money on Broadway is enormous. That's what Broadway is about. It's about money. If somebody tells you it's about something else, they're not telling the truth, which doesn't mean that there aren't a lot of wonderful commercial producers who care deeply about the work that they're doing. It's just their job is to return an investment. In total contrast, The Not-For-Profit Theater, theater as an artistic and community enterprise, all right? This is a new phenomena in our country. It's something that we have to recognize. There really wasn't a not-for-profit theater industry until really starting in the 1960s. There were attempts to do theater for the sake of art, but until that point theater was viewed as entertainment or commerce, not as something that had artistic merit. It wasn't until the Ford Foundation invested in growing theaters and communities around the country until after World War II when the country was decentralized away from the East Coast Corridor that you and the investment of the Ford Foundation and the creation of the National Endowment for the Arts, this created the industry that we're all in. There really again was very little before that. And it's important to know that because the youthfulness of our industry is also our greatest strength and hope for the future. So not-for-profit theaters are mission-driven. They believe that theater can go beyond entertainment to have a positive impact and create social change. They're ongoing companies who provide creative home for theater practitioners, producing several productions each year and form strong bonds by providing service to the community. And they're expected to charge ticket prices that are below market value to encourage a broad-based audience to attend. We all know that in just over 50 years, our industry, the not-for-profit theater, has grown beyond anyone's wildest expectations. The most recent TCG figures had us with an audience of 44 million. It's become the National Theater. And as I say, I mean, when I give the full-blown version of this, I say one of the reasons for hope is that when I think about what the American Theater was like when I was starting out 45 years ago, excuse me, 45 years ago, and what it is now, it's unimaginable if you had been there 45 years ago and seen what existed and see what exists now, it makes you think, well, if that can happen, why can't it continue to happen? Anyway, but despite the growth of our industry and the tremendous economic and community impact, we still have this systemic lack of understanding of the basic economics of our business leading to faulty financial assumptions, the challenge, artistic innovation. So let's look at the practical economics and how it actually works. In 1965, two Princeton economists, William Bommel and William Bowen, authored a book called The Performing Arts, The Economic Dilemma. It was the first time that the economics of performing arts were comprehensively described. And it still is the Bible for understanding the business of our industry. What Bommel and Bowen basically said was that since the Industrial Revolution, the combination of technology and capitalism had led to economic growth on an annual basis of an average of 3% a year, up from zero for the prior millennia. So in other words, suddenly you had the opportunity for millions and millions and millions of people around the world to have some kind of sustainable lives. Whereas before that time, even in Jane Austen's time, the majority, the vast majority of people were out there trying to make sure they could get through the day without starving. This technological evolution created a market-based economic system that's overwhelmingly oriented to creating things that have financial value. So one of the problems we face is that it's hard to measure the financial value of going to see a play that changes your life. This is one of the reasons that we're viewed. What I say to people is look at what's happened with movies. Every Sunday night you have the top-grossing movies of the week. The implication is, these are the best movies. Well, no, just because they're the top-grossing doesn't mean they're the best movies. But yet that's the bias we have in our market-based capitalist system is that if it makes money, it is good. So a simple, bommel and bowen illustration is in the auto industry, it takes far fewer workers, far less time to produce far more automobiles than it did 75 or 100 years ago. So in other words, because of this productivity, more cars can be sold, the company can make more profits, the employees can be paid a lot more, and the price of the product doesn't have to go up much beyond the cost of living. So prices are fairly stable, wages are going up for the employees, profits are going up for the company, and it's all because of the technology that enables them to build cars faster. Now think about our industry, okay? If you're doing Beethoven, it takes the same number of musicians the same amount of time in the same-sized halls roughly to do a Beethoven symphony as it did when they were first performed. And if you're a purist about Shakespeare, and I know Shakespeare's agent in literary estate doesn't have any control over what happens to his material, but if we had to do it the way Shakespeare wrote it, it would take the same number of actors, the same amount of time in the same-sized halls. So, again, we're not the movies. We haven't mastered digital capture and monetization as yet. And so what we can generate back from the work that we do is largely related to what happens at the box office. So in short, as in the general economy, wages grow, living standards grow, and we have to try to keep up, think about replacing key employees and how much more that can cost you. This puts cost pressure on our labor-intensive industry. It creates an income gap between our costs and the revenue that we can generate at the box office. And that's the cost disease that Bommel and Bowen identified as being the core economic principle of the performing arts. Again, over time, unless the performing arts charge so much money that they price themselves out of existence, they wouldn't be able to compete without some form of subsidy. What's happened in our industry over the past four decades is that the growth in our budgets, largely due to compensating professionals, has outpaced annual contributions, leading to ticket price increases far in advance of the cost of living. And again, the budget increases are not because we're not good at what we're doing. It's the core economics of the industry. So for example, here's how quickly the cost disease can take over at an individual organization. Over 10 years, if a company's budget increases by 3% annually on the expense side and 2% on the contribution side, this will require ticket prices to rise by 42% in that 10 years, okay? So it seems little in one year, 3% in expenses, 2% in annual contributions, but that 1% gap over time grows to 42% ticket price increase. At the Goodman, when I started there, the top ticket price was $5.90 for the big shiny musical at the end of the season. And there were gas lamps in the auditorium and stuff like that. Shakespeare was still alive. No, Eugene O'Neill was still alive. The, that ticket price in 45 years, that top ticket price has increased to $90. If our top ticket price at the Goodman had increased by the cost of living over those 45 years, the top ticket price at the Goodman today would be $31. So we may have a problem with ticket prices. I'm just saying. Bob Malin Bowen noted that if organizations were to use higher ticket prices to prevent their income gaps from increasing further, ticket prices would have to double every 13 years. Of course, no one proposes this as practical policy, but that's exactly what has happened in our industry over the past half century. So in summary, I believe we're at a point because of this lack of understanding about the economics, about the cost disease, about the income gap, about lagging annual contributions and rising ticket prices, where artistic innovation is being priced out of existence because there's little recognition of the true cost of producing theater. It takes money to produce new work. It takes money to produce innovative work because we're in an economy in which people will pay what they feel it is worth. We found at the Goodman, when we lower ticket prices to the 30 to 35 level, we see a spike in demand, particularly for new and unfamiliar work. That seems to be the price area where audiences are saying, okay, I'll take a chance on that, but if you're gonna charge 60, 70 or 80 dollars, you better be doing the Music Man or Arthur Miller or some name artist there. So instead of increasing annuals, support the focus is on growing sales revenue. If artistic planning, artistic planning priorities are dominated by sales revenue, that's the path to mission erosion. So finally, we do all kinds of things to try to prevent this with classes, et cetera, but I think the core of the problem is that based on the economics of our industry, artistic innovation is far more expensive than key stakeholders and practitioners realize. We must recognize and communicate that a higher percentage of annual support relative to annual budgets and lower ticket prices are ultimately necessary if not-for-profit theaters are truly going to be able to fulfill their missions and provide real careers to artists. That's whatever minute version it was. Thank you so much, Rock. I learn so much every time I hear you give this and I've read the speech, I mean, the talk, it's just really, really useful and if you get a chance to hear the full version, I recommend that you attend if you can. Okay, so there's a gap between what we want to do and ticket prices and what we can afford to do. And I guess my question for this risk forward group of leaders is have you experienced that gap at your theater and what have you done to offset it? What have you found? Yes. So, Willie, in the industry analysis that we've done, we feel that as a roughly $5 million budget, we are closer to 75% contributed, which for a company our size, only compares to a few other folks who also tend to focus in a similar kind of programmatic area. So this is like, that is not surprising to us, but that means that for us, it is actually part of our DNA to look to contributions to fill this gap far more than ticket prices. That's a deliberate part of Willie's model because as Rock said, when you're doing that risky new unknown play with perhaps artist's names that you don't know, the ticket price has to be accessible for audiences to take a chance. It's a huge part of our mission to be accessible to a wide variety of audiences. So growing ticket, in the five years that I've been at Willie, we've increased our budget by about 10% and we've increased ticket prices $2 in that time, basically on any given night of the week over that time period, so not significantly. We've increased subscriptions by like $5 here and there, again, not significantly. So we've been making up the gap in contributions. So as we've grown about a half a million dollars over that time, we've carried with us our 3% structural deficit just tags right along no matter what we do, because it emerges in different ways every time. So we'll fill the gap one year with a significant foundation grant and then the next year when that grant cycle ends or another one ends, that $200,000 kind of pops back up again. So we found that to be cyclical even as the company grows. But for Willie, the answer has been there's totally a cost escalation. It's mostly under compensation. We've deliberately been growing both staff and artist compensation. Over the past five years, we've grown staff compensation without the staff growing. For the last five years, it has grown. Hold on, I'm so sorry. Just a second. They're sending somebody. Oh, thank you. We've got some weird frequency. So who must be talking? Voice of God. Hey Siri. So for example, we've got an adaptive capacity grant from the Duke Foundation. We have not grown our staff size. Our full-time staff has not significantly grown. We've kind of been up down, up one or two staff members as programs have changed, so we've not made a deliberate changes, but we have increased overall staff compensation of our 25 full-time employees by $200,000 in the past five years. We've increased our actor salaries pretty significantly over that time as well. So it's deliberate cost escalation, but it's really in line with our values. So for us right now, the answer has been looking to individuals and foundations. What's the secret sauce to getting the 75% contributed? The secret sauce is that you don't have people subscribe. So you have to get 75% contributed. It's like a very compelling argument. I was just gonna add that that structural deficit question actually is the same, was the same at the public theater. I was there for 14 and a half years and it was actually the same. It was like instead of $200,000 at Willie Mammoth, it was $2 million at a bigger place. And it literally just carries on and frankly, for the conversation about the public, the way that the public is handling that is to move a commercial show to Broadway. I mean, literally. And frankly, one of the things that Rock was saying about commercial versus nonprofit, the identity of the nonprofit in I think in the rest of the country, but particularly in New York is completely blurred. And how many conferences have we been out where basically we're like, do we work with commercial producers? Do we not work at the commercial producers? Does that actually hurt us? How do we actually deal with that relationships? And what I see is that there are some theaters which I feel like this is the way that they're dealing with the gap. Some theaters are like, we're gonna just wholeheartedly embrace it. We're going to buy a theater on Broadway, right? So how many nonprofit theaters actually have wings of their arms of their organizations that are for commercial, right? So the public has one, MTC has one, second stage has one, Lincoln Center has one. I mean, the list goes on and on and on. So that's the way that they're actually dealing with that gap. The thing that I think that's so interesting about it, I just wanna throw out is I really hope the theater can look outside of the theater industry to be thinking about how to deal with this. And my gut says that the more that we actually talk about ourselves like corporations, the worse off we will be. My gut is that we keep talking and this is no disrespect to economics majors from Notre Dame who care about the business because I, and again, I'm on the artistic director side, so I'm supposed to be saying shit like this. But like the thing that I, I'm gonna tell you about my gym. My gym, Mark Fisher Fitness in New York City was so smart at this. Every single time I called, they knew my name. They had me in caller ID and I felt so seen by my fucking gym, right? And so the thing that I guess I wanna say is my gut is that there are different local businesses, different kind of boutique agencies and others that are not Nike and Amazon and all those places that we look at as corporations to be like, how do we do that? What's your top leadership picks? I'm actually more interested in sort of the local. I'm more interested in sort of going hyper-local in terms of those strategies in that area, particularly because the next generation of philanthropy is not clear to me. Even just in Washington DC, I just, you know, there is, there are like two families whose names are on everything and they're all octogenarians. And so I'm looking around and I go, and I ask the board, I ask people, I ask, I go, who are the next? And no one is pawning up. And my gut is, is because there is a conversation about the business model that is actually blurring the fact that we are relationship-based, blurring the public good aspect, the civic dialogue aspect, the cultural conversation aspect and that we're aligning ourselves actually potentially with some, well, we should be aligning ourselves with different folks. That's basically what I was gonna say. Great, great, great. I think it's aligning yourself with different folks and I think it's getting into the grassroots and I also think that, so coming from, I went from CalArts to the Denver Center and CalArts, so the interesting thing about working for a university that, it's an institute, but that has a basically professional producing arm is that you have to figure out a way to mobilize resources out of thin air because most likely, whoever it is that's governing your organization doesn't understand what it takes to make theater and that's what happened. And so right around the recession, the folks who run CalArts decided that they were just gonna take all the money away from the Center for New Performance and we had to look for a new producing model which meant that we were almost exclusively taking our work abroad because people abroad have money and we could use their money to produce what we were doing in-house and also out-house, right? Out of house. At the Denver Center it's a little bit different because the model's kind of based on what happens with non-for-profit theaters that are connected to commercially for-profit theaters and so the Denver Center has a gigantic commercial producing arm that satisfies the budget when needed so the big push there was actually how to mobilize new audiences because what was happening there is the audience had kind of atrophied and deadened itself because they were kind of looking at the same people. Well, when the theater was built, if you look at the way that the space was built, it was built so that Bob and Sandra could look at their friends, Mitch and Barbara and be like, oh, we went from the country club to the theater to sit in this room together with one another, right? And so, oh, oh, by the way, there's a stage over there and we should watch what's happening over there. So the space was literally built for people to feel like they were still within their little circle which is part of what the non-profit model is based on, right? So it's communal, it's about connecting a community together but it's sort of based in exclusivity. It's a certain kind of community. They come from a certain kind of zip code. They have a certain kind of connectedness. They're having the same kind of conversation with each other. The theater is what they do on the side. They feel like they're doing something really important. They are actually using the theater to do their civic engagement. That's what they're doing. So they have these sort of ways to connect to the cultural institutions. The new house that I'm in is different because it's huge and it has a national reach and our largest audience comes from the Bay Area and our second largest audience comes from Seattle and our third largest audience comes from Portland. So I'm dealing with constituencies from across the spectrum and yet we still have structural deficit and we still have the model still works at OSF where you're dealing with an essential structural deficit that actually not only affects your bottom line but it's also affecting your cash flow. So you literally can't move forward unless you're paying really close attention to how you're spending this particular dime on this particular thing. So one of the things that we're talking about is a way of shrinking the organization so that we can become enough compact without limiting the work that we do but to create a space for higher quality so compacting and constricting so we can have higher quality. Do we know how to do it yet? No, there's no model in place for that. Here's the other thing that actually goes back to what it means to have the nonprofit model be based in something that was created in 1950 and 1960 is that it was an exclusivized experience and so if you weren't a part of a certain community you weren't invited, you didn't even know where the door was. You didn't know where that door was because you weren't supposed to come into that door. Was it built for you? So now that most of these theaters and of course OSF is the kind of flagship theater that has pushed this idea of equity, diversity and inclusion on stage, off stage, backstage, around the stages, in and out of the town everywhere you go, one of the things that I've asked for from all of the people who collect data is how has equity, diversity and inclusion actually saved your organization? Who's coming because of the work that you're doing on the stages now? I hear a lot of this sort of push up against EDI, financial model converse versus, it's EDI versus financial, right? EDI versus being able to get your ticket sales up and my question is in the last six years at the Oregon Shakespeare Festival which is basically when they really started to push the focus towards equity, diversity and inclusion everywhere and around the work that they do, who's coming because of that? How do we track that? How do we know that the high school student that graduated six years ago isn't coming back with their family because the work that they got to see when they were in high school said that they should come back, bring their family, make sure their mom comes, make sure Granny comes and make sure their generations are coming and so I think we also have to refocus to be able to say we're not just doing EDI because we wanna be good to each other. EDI is actually going to be the foundation on which the theater gets to remain and part of that is because I get to be in the theater now and you get to be in the theater as well and we all actually are now sitting crossing each other in those big large rooms saying, oh hi, how are you doing? It was great to see you at the last community meeting or at the grocery store, at the library or our kids go to school together or they don't and nice to meet you and I'm glad to meet you for the very first time and get to know who you are. So I think we also have to begin to broaden these models to begin to see, so the point of what was happening in the 1950s was so that we can improve on the model, right? And we have been improving on the model. I don't think we can always see that it's an improvement because it's hard, you know? The transitions are hard. I certainly agree with Nataki. We have to dispense with the fallacy that diverse work or EDI stuff doesn't sell. The best-selling show at my theater was in the Heights and all I have to do is look at something like Native Gardens which has played every main stage at every big art theater in the country to know that that's not the question. In the Midwest, in the flyover zone, we're caught in the middle of all these things to some degree. So yeah, we have the gap but we also can say that the subscription model remains very, very strong and patron loyalty remains very, very strong. In some ways, maybe we're a little bit behind some other urban centers but Mark Twain said, when the end of the world comes, I want to be in Cincinnati because everything there happens 10 years later. So we're trying to ride that out as long as we can. So here's something a little controversial but because of that and because of the brand loyalty which we don't want to sneeze at, we're not trying to lower prices at our theater. Our top ticket price is $96 for the big musical. There will always be people who want to sit behind home plate. There will always be people who want to sit court side and are willing to pay that in our market and we're fine with that. So the top ticket price has done this over the years. Absolutely. What we're trying to do is stretch the bandwidth and create more points of end to end and create more points of end to end. Entry on the low end without upsetting the people who pay more. And we all have lots of discount ticket programs. We started a thing called $10 Tuesday which is essentially a rush program where we save 100 tickets for Tuesdays, hand them out to anybody for $10. There's lots of ways that we all go about doing that but for us the model is stretching things and making sure that there's a $10 ticket or a $35 ticket for absolutely every single performance. We don't want to get rid of those other people. And just to go back to your point about EDI stuff, what I would posit is that it's not so much about diverse work versus non-diverse work. It's about work that the audience perceives as entertaining versus work that the audience perceives as challenging in some way. Either challenging to their values, challenging because it's structurally difficult work. My audience has a hard time with non-linear things. And so that is an impediment to attendance and sales probably more than content and theme. And building on what Blake was saying, I think there are a couple of things that are true today. Consumers are pickier than ever. They want value. They want knowledge. They want to know what experience they're going to have. They're extremely demanding. You're not gonna sell them a bill of goods. They wanna know what they're getting. I mean, all of you who go to a restaurant for the first time, you go online, you go on the app to find out what that experience is gonna be like. Because if you're gonna put down good money, you wanna make sure that you will get your money's worth. So that's one thing. The other thing is that thanks to technology, we now have the quaint ability in the 21st century to price our product based on demand. Welcome to capitalism for the American theater. And as Blake was saying, it's the same thing. We don't even publish ticket prices anymore because the ticket prices are changing every day. And our marketing director is analyzing demand patterns both up and down. And that has enabled us to build the volume of the audience because we're selling a much higher percentage of tickets at a discount rate as we find that sweet spot where people will attend. But at the same time, if there is a show that there isn't price resistance to, we will push those prices. And maximize the return on that. Is it necessarily the ideal way of doing business? No, but I think it's what we have to think about doing at all of our theaters and the discussion at lunch about the theater that was charging like five, 10, 25, and $75. People could pay one of those four ticket prices. Half the tickets were sold at $5. The other half were sold at the other prices. The $5 tickets were half of their total revenue and the other prices were the other 50%. So those are creative ways to look at pricing. And finally just to add, it's not about corporatization. It's really, again, getting the people, we have a system in which until we think of a different one or until the government decides to fund 30 or 40 or 50% of our operation where we rely on these community leaders, these volunteers, these trustees, and they don't know. And but they don't know how it works as a business and it's not that they don't care about the mission, but if they understand how it works as a business, somehow they respect it more because they think we're just a bunch of crazy kids putting on plays who really aren't responsible, who really aren't financially responsible. And the opposite is the case. I mean, we know the value of a dollar better than most businesses do because we have so few of them. So trying to educate trustees to say it's a business, it's a business, our product is great works of art and our product is connecting those great works of art with the community and being an asset to our community in a positive way. Great. That's kind of what I'm getting at with this presentation. So. And one of the things that's coming up and what you're saying right now and that came up in something that Maria said is that what's the next generation of philanthropy? And I know that a lot of your talk has predicated on the idea that we need more from the theater, in order to continue to do the work that we're doing and continue to innovate, we have to up the patronage, right? Either foundational corporation or individual donors. So what are you currently encountering as the next generation of philanthropy? Or what do you see on the horizon? Esteemed leaders. Yeah, I think every community. I think every community, every city has its group of philanthropists or city elders and we are seeing that nationwide. We've just been pushing really, really hard to get the children involved. And it often cases the children are now 50 something. That's the generation. You're looking to try to kind of bring in. But their world view is more global. And we all read these articles about how they really wanna roll their sleeves up and get dug in and they're not necessarily giving gifts for the general civic good. They're giving gifts about very narrow bandwidth of things that are their personal interests. So I think it's gonna be a matter of broadening instead of narrowing. Yeah, I think it is about broadening. I think it's also about asking who's not at the table and how have you invited them to the table and making sure that again, so if you're going to a kind of similar bucket of people, then that's who you go to and you go to across generations. If you're looking for a way to broaden that bucket of people, what do they say that churchgoing people in impoverished communities give 20 to 30% of their income into what they believe in, which sometimes is the church. So people do contribute. And that's from people who don't have a lot of money to people who do have a lot of money. And I think it's just accessing those people and saying, hey, come be a part of what we're doing. The other thing I think we also have to remember is that just like you're saying, in 30 years, the millennial generation will be in their 60s. Millennials, so I remember somebody saying to me once, oh, well, millennials don't have any money. And I said, no, millennials have money. They don't have wealth because you mortgage their wealth in order to pay for their education, right? So it's not that they don't have access to resources. It's really about making sure that they understand that those resources can actually be used for the things that they believe in. And again, it's about connecting to people and making sure that they understand that this is a part of what they want in the future. And also not asking them to do it in the same way that we might have asked somebody who's my mother's age, maybe I can't say, well, now that you're retired and you have access to all this money, can you write us a gigantic check? Maybe I should do it a little bit more like KCRW does it where they go, can you spend $300 a month or $200 a month or $100 a month and begin to be philanthropic? And that's the last thing I'll say is that we have to remove the transactional quality that we've given to philanthropy from the conversation and say what you're doing is you're dedicating this resource to ensure its future. That's what you're doing. So at OSF we have members and our members can pay from $35 to $100,000, right? And you can be this kind of a member or this kind of a member. It's a philanthropic gesture. What we do is say here's $35 and for this $35 you get to make sure that we get to do more of this and this is the level that you can give and what we need to do, we haven't done that yet, is begin to mobilize that $35 so that it's $300 and it's $5,000 and it's $100,000 and we can just start at that one little philanthropic gesture just like sometimes your local radio station does a drive and you give them $25 and you just continue to move that forward. So I think we have to just look at the fact that the older models are really important to our foundation but there are also models that other people are doing that we can engage. Yeah, I'm gonna watch that documentary on AOC. There's like a bunch of fundraising, Alexandria Ocasio-Cortez. I'm gonna watch that, take some notes. But the other thing that I was gonna say is just an interesting thing. I'd like to see in terms of the next generation of philanthropy, I would like to see us be less competitive with each other and utilize and leverage our relationships with each other to make big asks to major corporations and foundations. That's what I would like to see. I think that a lot of us actually say, oh no, wait a minute, we're gonna be cannibalizing. They can't give to the public and give to woolly mammoth. You know what they can. You know what? They absolutely can. There's no question about it. And one of the things that's happening at least in Washington, D.C. is like a lot of foundations have decided not to fund the performing arts, but yet they're funding education, they're funding mental wellbeing and wellness. And we just have to do a much better job of talking about how intersectional that is with our work. And I'm sitting in rooms with major, major corporations and they're talking about mental wellbeing in the community. And I'm just thinking to myself, how are the arts not at this table? And so that's what I'd like to see. I'm taking notes. I'm so excited. It's such a great seminar, right? This may seem like a very, very naive question. So thank you in advance for indulging me. But could you just talk me through or us through? There's a project you really wanna do. You know your audiences or a big bulk of your audiences may hate it. Your core audience may hate it. But you really wanna do it because you really believe in this artist or you really believe in this work. How do you begin the planning to make that project happen? What do you do? So every year at Woolly Mammoth, we've, not a joke. So we pride ourselves, so we spent years on this and this is why this is a little bit unfair. It's not like a kind of a silver bullet. But Woolly's kind of brand value that the people who understand us best understand that they may loathe one in five shows and that actually can be an okay thing. So we have just spent so much time educating our closest in folks to understand. And the biggest thing that I hope for if somebody really hates a project is that they still have the very least value and appreciate why we did it and that they also feel that we, it's not like we phoned it in. It's like we tried so hard it went too far or I get what they were trying to do and that could be commit to that artist or commit to that project or that content that the vocabulary was too complex for where the audience was in terms of all of the different elements of narrative. Any of those things, but there's a value and appreciation for the risk, whether or not that you actually liked it and that we have found, like at board meetings and other conversations that people will get just as much enjoyment talking through in great detail about the shows that they hated and learn from that as much as they do about the shows that they loved. Those conversations are often more fruitful and more exciting for everybody. And there's very few shows that are like universally low. There's like somebody who's like, oh my God, I love that project. And they're like, oh my God, we should close the theater. So it's, and that's great. So for us, it's about ongoing, like the explanation of why we're committed to that work that is the core piece about committing to anything. There's very few things that we would commit to that where we would go out the gate and say our audience will hate this. So I don't think we'd ever think of it that way, Lisa, to kind of think like, what do we do to mitigate against the disaster we know this will be? It's instead, why are we choosing this? How do we have to explain to folks that this is so important? And where do we hope it will get? What are we trying to accomplish? So it's all about the kind of groundwork and relationships. You've kind of built in those Harry Potter jelly bellies where some of them taste like puke and then some of them taste like lemonade. You've kind of built in, there may be something in here that you don't like. That's right. So buy that bag every time. Well, this is like the point about subscription that I made earlier. We don't have a lot of subscribers relative to our organization size and that's okay, that's our model. That's because there's only a core group of loyalists who are like, I wanna do that whole journey every year. I wanna, I don't know what that grab bag is but I know that I might not like everything but I want that. Versus the folks who are still fair weather fans. Like they'll wait to see if that's a big hit show and they'll come out. So our single ticket audience is huge compared to our subscriber audience but again that's okay, people know who we are. Some of you probably read an article about Sean Daniels recently. And he has done this thing at Merrimack Rep when he finds somebody who writes a letter saying how much they hated the show. He invites them to lunch, to sit down and talk with somebody who loved the show and then they leave the room and just let the two of them talk it out. I think that's great. There's also the apocryphal story at Cincinnati Playhouse about the guy who storms out and is leaving the theater. He's so upset, he just absolutely hated the show and the artistic director is out there in the lobby saying oh I'm so sorry you didn't like the show and he's like I'm never coming back to this theater again. Then he stops and turns around and says but those actors were really good. And the set looked really, really nice and starts checking in with himself about all the things he did like. I'm with you, we just plan around it. I don't think there's anything our audiences can't handle with the right amount of prep. I think the biggest sin is to bring people in under false pretense and to not prepare them for what they're going to see. You don't want to bring people in and then pull out the rug from under them because you think that's fun to do theatrically. You gotta do a little prep if you're gonna ask them to go someplace that is scary for them. I think for us it's less about getting out on that limb and sawing it off behind you every couple of years. I mean we've done that for a long time. We know that if we don't do that then we should quit because we're not really doing what we should be doing. But it's more the ongoing problem of, in recent years at least, of doing new work, innovative work that may have varying degrees of audience challenge but have generally been well received by members and by the press. And yet it doesn't translate into single ticket sales at all. It's sort of Danny Newman's revenge or something. You know that the subscribers, the members are the ones who say this new play was great. We had a terrific time. We got great feedback and the review was great. And so what we're trying to figure out is where are those people who used to come out with some level of curiosity for something that was new? So that, I mean, we do nine shows a year. We could get out on the limb once and then do eight safe things and live happily ever after. But that's not who we wanna be. We wanna be doing a wide range of new stuff but it's getting harder to do that. One of the things that a colleague of mine said, I think this is part of the metrics for success and how you plan for that success. So when Blake says I think plan around it, it has a little bit to do with, to me, what you actually decide success is gonna be. So a colleague of mine, I'm just gonna give you a very clear example, did a musical in her season and then did a play by an Asian American writer. The musical hit all single ticket sales and is deemed a success by that theater. The other show did not actually meet its revenue goals, but 50% of the audience, upwards of 50% of the audience was new to file. But that wasn't actually in their metrics of success in the beginning. So what happened is that the story around that play is that it didn't, it was not the success of that season. That the musical is the success of that season because of the single tickets and stuff. So this is, this is, to me, it's really interesting to think about actually those metrics and how we can actually upend them and what if actually it was about that, the goal that Nataki was saying was who's at the table being actually just as important and then how do you reinforce that in your staff so that the staff isn't saying yeah, but we didn't make goal and the board, yeah, but we didn't make goal. What, because those things actually do erode risk taking. The last thing that I also wanna say is the more risky, look, I'm a risky theater already, right, but I don't feel like I am in competition with the mainstream, the more provocative the mainstream gets, the better for me. So please, I think on this panel it was like, oh yeah, of course we go out on a limb. And my experience with some of the folks that I've been speaking to, I asked them what kind of programming they do in the regions and they said, oh, you know, standard regional fare. And I just think to myself, what does that mean? So I just, I'm not gonna take it for granted and I'm gonna ask you please to keep going on a limb so I can do some weird shit. So coming from, I did, I came from a theater that did weird shit and I moved on to the Denver Center that really didn't do that at all and in the process of that, managed to create with my colleagues a very successful season, one of the most successful seasons I've ever had and one of the things that we shipped it was the marketing. So, and the other thing is that the conversation that I had with my patrons after the wildly successful Macbeth that Robert O'Hara directed that was polarizing is a great way to say what happened in that room, where you had people who took 45 minutes to get to their chairs leaping out of seats and running upstairs screaming where I was told I had a homosexual agenda, a homoerotic agenda, a BDSM agenda and a hip hop agenda all at once. So, and yet the young people would show up at the end of the first act and they would, cause you could come in and buy a really cheap ticket and come and take over and they would go back and bring their friends and come and take over those seats where those other people got up and left. So, that's the first thing. Wait, wait, wait, you could buy a ticket to come in after the first act? Yeah, yeah, that's it. You could occupy those seats and so they would, they were just coming up, right? The other thing is that I kept saying to my patrons, don't worry, it's a whole season full of plays. There's something in it for everybody, so just come back. Well, this is an audience that's used to coming into every single room and having it be planned exactly for them to their taste. And my thing was, here's a season where we don't have to do that, cause I'm here now and so, I'm not gonna do it the way that they always do it. I'm gonna challenge this idea of the status quo and say, you can actually sit in this room with everybody else and enjoy this thing that doesn't allow you, doesn't mean that you get to reflect on your life and how it's been and your values. You get to witness somebody else's experience and that's what I tend to do in every single theater I go into. So, I have to tell you that it's actually something that I really enjoy and I want you to have that opportunity and that's what I'm doing in this room. And that's what I did. The last thing I'll say is that it has to do with how you market because my marketing team said, there's no way we're gonna sell, I won't name the show, we're not gonna sell that show, I won't name the show. There's no way we're gonna sell American mariachi, right? There's no way it's not gonna sell. And they took me to lunch, three people said, no, it's not gonna sell. It's crazy, don't put it in the big theater, it's gonna be terrible. It's gonna ruin the theater forever, right? And I said, no, actually it might sell. I mean, we don't know yet, right? And they were like, well, based on our models, there's no way for this to work. And I said, oh, what you're saying is, you don't have a marketing model to sell this. So why don't we create a marketing model that sells this that's different from how you always sell things? And it worked. And it worked. And now, you know, they're excitedly, they're saying all the ways in which way that they were successful at that, all I did was open a door and say, look out the door. The horizon line is different than you think, than the one that's in your head. Try something different. That's good. I think that's so great. I think what you're doing is reawakening people's curiosity. And we're now in this media world where we only have to watch things that we know we're already gonna like. We only have to watch the news that we know we agree with. We only have to watch the programs that we know that we like. And if we don't like them, just chuck it in the waste bin and go on to the next one on your cue. And so it's created this cultural moment where audience, I think the single ticket audience, not your subscribers who've made a commitment to you, but the single ticket buyer is unwilling to take a chance on anything unfamiliar that they don't already know they're gonna like. And stories like that are just reminding people that some of the fun of the theater is that discovery. And again, they will take a chance if the price is right. And that's, I mean, we've had similar experiences in drawing new audiences, but people are price sensitive. They're much more price sensitive in there. If you haven't gone to the theater, you're not gonna spend a lot of money to go to the theater. And if you go to the theater, but you don't know what it is you're going to see, it's like going to a concert or something, you know? I'll pay a lot more to see one artist than I will to see an artist that I don't know as well. So it's just the value proposition for consumers is at the forefront for theater audiences now. And again, we have strategies to deal with it. We can adjust ticket prices. We can be proactive in getting out into communities and letting people know it. It doesn't cost $100 to go to the Goodman, unless you want to see the Music Man this summer, and in which case it's gonna cost you $135. But if you want to see a new play, if you want to, and even the Music Man, you can see at a preview for $25. So it's a different world of marketing. It has changed completely. And technology and social media, the only thing that still works are the postcards that you get in the mail. I swear to God, when everything else has failed, when you send a postcard out to people, you still get an astonishing response. That's amazing. But I think of it. I have a pile of postcards on my desk of shows that I've gotten that I want to see. So when I go through them, when it's time to see them. We have about 10 minutes left and I promise that there would be some opportunity for folks to ask questions. So I think I can take a couple of questions for this illustrious group. Anybody? Oh, I see a bunch. Okay, we'll start here. Okay, you can hear me, yeah. So, Rock, you make me think, have you thought about establishing an experimental price where you know that your audience will pay a certain amount for an experiment? About four years ago, we lowered the price in our 400 seat second stage where we do almost exclusively new work to about an average of $25. And we saw attendance go from 50% of capacity to about 80% of capacity. And that's continued to be at that level. So we kind of feel, again, that the $25 to $30 range is a sweeter spot for people to take a chance on it and we've built off of that. We also wanna do big work on, new work on the big stage and that's where it's been tougher to get people to come out, to fill the 800 seat house. So that's specifically it. Hi, thank you so much. So you guys have spoken a little bit about subscription specifically and how you've seen a drop in those. But being a millennial myself, I've actually seen an increase in subscriptions in my life, Netflix, Blue Apron, Clothing Things. Is there something that you guys see when you're doing that and thinking about subscriptions that you could incorporate from what's happening outside the theater? Yes. Anyway, we've talked about this a lot. It's been probably five or six years long conversation at Woolly, I'm sure a lot of other places too, about a membership model. There are plenty of places that are experimenting with membership or free refills or things like that. I personally found that places like Lincoln Center in the public where there's a lot of volume of, particularly at the public, where there's so many things to see, the membership works particularly well. We've been increasing our programming load at Woolly where it's kind of coming to a point where it feels like a membership model might be more easily achievable for us because of being able to see more content than the seven issues that we previously did a year. So I think it's absolutely part of our thinking and I know some other folks. So my question is actually about how we build capacity in the marketing departments to be able to diversify marketing. I think at most institutions, there's a sense that you have to hang onto who your core audience has been while you try and innovate the future but no increase in the amount of money that you have to divide up to be able to do diversified marketing. And so I'm just wondering if anyone's been able to crack the code on that. We had our marketing director take some resources within her own department to create some new positions. What we're finding is that now with the social media being such a huge driver of information and sales, our marketing department essentially has to be its own media company and we're creating content now constantly, constantly. So the last person we hired had a film degree and no theater background whatsoever. And she spends most of her time creating online content to do that. But they basically cannibalized another part of their budget to get it, Hannah. No, we did not. No, but they had to squeeze in a few other areas and I don't, off the top of my head, know what they were but it was a trade-off that the marketing director herself was comfortable making. Hi. I just was gonna say at OSF we're actually trying to figure this out right now because we just did a study in which we learned that the marketing budget has decreased by 1% almost every three years. So in the last couple of years it went from 5% to 4% and on its way to 3%. So one of the things I'm looking at as I onboard at OSF is how do I rob Peter to pay Paul within the organization? Like who is actually taking up so much resource that I'm not able to give the resource here because most of your money is in your marketing? Hi, for those of you who are recently transitioned or transitioning I'm really curious how you build in a support network into your transition team when you're onboarding at another theater. When we talk about the excitement around these transitions I wonder about the environments that you're walking into and how you are finding that support in your institutions or even before you get there. Going through both I'm happy to just start that off. So we spent two years on the artistic director transition planning, a year of strategic planning, a year of search and now this is year three which would be the onboarding year. We worked for months on a plan of kind of what resources, what constituents we needed to kind of make available to Maria, Maria was part of that conversation.