The Private Theater, aka “Dynamic Pricing”

 

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I make my living in the not-for-profit theater. Back in the ‘80s I got my Equity card in one of them (The Alley, in Houston), and those not-for-profits continue to be, with very rare exceptions, where the plays I write have been produced. And over the past few years—by some ridiculous good fortune—I’ve been able to support myself through those productions alone. I’m comfortable. I’m not complaining.

But, once upon a time our institutions went by the quaint name “the non-profits,” a bit of obsolete terminology that went out of fashion around the Reagan administration when for some reason the name subtly mutated from “non-profit” to “not-for-profit.” I’m not sure why this hair-splitting happened, but it’s always felt sort of grammatically weaselly—it’s like saying, well, sure, ya know, we’re not really supposed to make a profit (it says so on our letterhead), but on the other hand if we should happen to turn a profit in a given season (wink, wink)… We’re not for profit, but we’re not necessarily against it.

I mention this because in the last couple of seasons I’ve become aware of a ticket scheme already practiced by some of our larger regional theaters, and currently under consideration at some where my plays are produced. Basically, what these theaters are choosing to do is reserve a bank of premium seats which can vary in price according to demand. That demand rises from an especially good review, say, or the presence of a Hollywood star in the cast, etc. When the demand goes up, those seats would suddenly command a considerably higher price, allowing preferential access for those best able to pay. And this practice goes by a very catchy and newfangled name. It’s being called “dynamic pricing.” But it’s not a new practice. It’s actually quite old, and has a more familiar name. It’s called scalping.

The argument for it goes like this: In any regular season there will be plays that only a few people want to see (like those I write) and then there are those that many, many people want to see (The Santaland Diaries). So why not follow the model of every other business and maximize profits on one product so as to subsidize the others? After all, we live in a market culture, in which it has been demonstrated that market principles always produce optimal results, right? Our boards of directors certainly tell us so. They tell us we have to compete in the marketplace for our audience. And after all, scalping—or price-gouging, if you prefer—already works for airlines and sports teams and hotels and Broadway shows and nobody seems to complain—at least, not those that can afford them. And furthermore, like it or not, pretty soon everybody will be doing it. So hey, why fight it?

But there’s one little problem with that way of thinking. Here’s the problem: Our theaters are not airlines, or sports teams, or hotels, nor are they Broadway shows. Our theaters don’t pay any taxes. And the reason that we don’t is because we lose money. Intentionally. It’s what’s supposed to happen. And we’ve always accepted that as a condition of our existence. And yes, that means that we are perpetually on the verge of financial collapse. I get that. But we enjoy that tax-exempt status precisely because we can’t cut it in the marketplace. For that matter, neither can churches or libraries. We are exempt from paying taxes because in some quaint, bygone era we imagined that these institutions provided their own return to the community that they served—with equal access to all (like I said, quaint).

And look, some of the very artistic directors who have come to embrace this policy are people I consider personal friends. And let us extend them our sympathy, for they have the miserable task of scurrying about year after year, tin cup in hand, tying themselves into knots for a few measly donations, all so they can make a payroll. It’s no surprise they’re looking for a quick fix—any fix—to their perpetual problems.  

An artistic director at a big theater (a person I like very much, by the way) told me last year that he considered himself a “redistributionist” because he takes money from wealthy patrons and gives it back to the theater—now, he doesn’t give a raise to the actors, mind you, or to the crew; he doesn’t lower ticket prices. No, he gives it back in the form of a new patron’s lounge where you can buy expensive cocktails—provided you have enough money left over after you’ve bought your tickets. But that’s not a problem for our boards of directors and our donors—those whose money we’re supposedly redistributing.

Our boards are always stocked with people who know all about money. It’s their job. And these folks are simply—helpfully—sharing some of their financial strategies with us silly little idealistic theater people. Because the truth is, they don’t want live theater to die any more than we do. They attend a couple of times a year when they need to entertain a client with a new account. The wealthy have always been patrons of the theater. They just don’t like having to wait in line with the rest of us.** But they already have an advantage when it comes to getting the best seats in the house. Go to any basketball game or Rolling Stones concert—any for-profit venture. There they are, front and center: Hedge fund managers, law-firm partners, advertising executives, because gosh darn it, they’ve earned it. It's part of the ongoing sky-boxification of everything in the US: Not only do the wealthy have an advantage ipso facto, but we further institute policies to enhance those pre-existing advantages. That's taking the law of the jungle and making it worse.

 

To turn our theaters—our public institutions—into yet another clubhouse where the velvet rope is preferentially pulled aside for those waving the largest wads of cash—that, to me, is an unacceptable solution.

 

And if, as my friends at prominent theater companies would argue, "it's not profit if it is re-directed into next season's budget" (rather than the CEO’s pocket)—well sure, but that's the same argument corporations make when they sequester their profits offshore for supposed future use. For that matter, why not do dynamic pricing and stash the profits in a Cayman Islands account? Same reasoning—"as long as we're not touching the profits this year they shouldn't be taxed." I smell BS.

And hey, if the market ideologues are in fact correct, and the demand dries up for the product that we offer then yes, we will have to change—improve, innovate, maybe even fire some people (sadly)—maybe produce smaller plays (how much smaller can they get?), maybe even hire the occasional Hollywood celebrity (All The Way) to star in them. There are all sorts of measures we can and do take to remain vital. But to turn our theaters—our public institutions—into yet another clubhouse where the velvet rope is preferentially pulled aside for those waving the largest wads of cash—that, to me, is an unacceptable solution. Because then you’re no longer running a not-for-profit, you’re just making a profit and finding creative ways to hide it. And in that case, you’d better start paying your taxes, like the rest of us do.

**For a far more eloquent discussion of queues versus markets—including how it pertains to the Delacorte Theater and its ticket lines—I would suggest Michael Sandel’s terrific book What Money Can’t Buy.

 

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I was so happy to see all the negative comments about this article. Most of the points I disagreed with already pointed out, so I won't expound too much.

1. Mr. Norris seems to have no idea what dynamic pricing really is. Go to wikipedia. It's nothing like scalping. In fact, more often than not, prices are SLASHED in order to sell substantially more tickets in venues that are almost never sold out. At least that is the case in many regional theatres. If you increase ticket sales enough, even at a cut rate, you will increase profit. More people seeing the show for less...Sounds good to me.

2. Do some more research about what a non-profit is and it's purpose.

3. Almost all trustees I have worked with are extremely dedicated to the art.

4. LOVED Clybourne Park.

Many folks have commented on the wildly inaccurate representation of everything from the meaning of 'non-profit' to the way boards work. But the basic question of whether having variable prices is a good or bad thing is worth addressing. I don't care for Mr. Norris' tone, which seems accusatory towards a not-well defined target for unclear reasons. What exact theater are we talking about? I would want know so that I can research their pricing methods. Dynamic Pricing of any kind seems to be the demon here, but that cannot be right, since the demon also seems to be charging rich people more money than poor people? Or last-minute buyers of tickets to hits more than early buyers of tickets to less popular shows? What exactly are they doing that is offensive? And who is doing it? Many of my favorite theaters offer industry nights with little notice when they see that they have a night that isn't selling out. That is definitely dynamic pricing, is that something that Mr. Norris disapproves of? Or is it only theaters where when they realize a show is selling well, they raise the price of tickets? (if such a practice exists...I haven't seen it, and the article doesn't tell me where to look for it. The only theater mentioned is the Delacorte, and obviously they do not practice dynamic pricing)

I love the fiery poetry of this but 123 of the free shows I produce are subsidized by our ticketed programs. I want all the art to be free and all the artists to be paid a lot. Until I can figure out the magic formula for that I shall be at peace with the happy medium. Charging as much as we can and paying artists as much as we can.

Bruce dynamic pricing is saving nonprofits. it's not scalping. it's making the succesful shows pay for the nonsuccesful - often new work. thank goodness for dynamic pricing or many of us would not hit goal.

I found the essay so depressing that I almost didn't bother to enable javascript to see if there were any comments. I'm sure glad I did!! Kudos to (just about) all of you!!

Where is the slippery slope? I was pleased to see a reference to the Reagan administration in thearticle that Bruce wrote, as it is worth remembering that it was during thatperiod of time that NEA was attacked and became reduced to symbolic, the forcesthat reduced support to many non-profit organizations, be they social, healthcare or educational, have all had to adapt to new realities. In the arts, particularly as the majornational foundations filled in to support many new needs and causes, we havestruggled to remain accessible, affordable and sustainable. The result has been a reliance on theindividual donor, perhaps the only part of our funding that has grown, as wellas strengthening the performance of ticket sales. As a professional with over three decades ofexperience, I would reject the description of Trustees, my experience inseveral different cities has been that the trustees are passionate advocates of theart form, who have accepted responsibility for the institutions that they areaffiliated with and are providing extraordinary support.

Dynamic pricing, doesn’t impact on ticket buyers who buyearly. It doesn’t impact on subscribers,but it does impact on buyers who are not price sensitive but who will pay whatit costs to see a show. While theprevious mantra to supporters has been that the tickets prices only cover apercentage of the costs of producing the production, it isn’t known if this isa compelling argument to those who need to see the hot show. So that by increasing the price of what arealready subsidized ticket prices to a level that seldom approaches whatcommercial producers are charging is in my mind agile management, not a slightof hand.

The slippery slope is more like found in the amount of commercialinfluence, enhancement anyone, that has become accepted and another means ofsupporting aspirations that are beyond the current available resources.

Although, I'm not a fan of Mr. Norris' plays, I have given him the benefit of the doubt that he was a seriously thoughtful person. This article has erased most of my confidence in that conclusion. He cites that changes have been made in the professional theater industry since the Reagan Administration. Yeah!! The reduction of arts funding at all levels of government has reduced the community buy-in to the benefit of non-profit arts organization so we can say we "shrunk the size of government." The diminishing arts-related journalism across the country has pushed the arts to the fringes of public dialogue. Huge shifts in foundation and individual giving have transformed the flexibility of non-profits had in how they can spend the grant or gift. At the same time, boards have demanded Theatres generate more and more earnings as a portion of income. These conditions have caused the creation of dynamic pricing.

Only in this country do we tend to criticize a theater that hires an actor or director with TV and/or film credits to their name. Helen Mirren, Ian McKellan, David Tennant and other British actors regular hop from the stages of the RSC or National Theatre to a film then to a TV series. No one appears to question whether the RSC or National Theatre are selling out to produce a play starring The Queen, Dr. Who or Gandalf. Why then is this even considered a credible point in his argument?

Now I don't use dynamic pricing. I don't agree with it because I believe theater should more inclusive rather than exclusive. But if established and regularly produced playwrights such as Mr. Norris want to be compensated at an equitable level for their labors they need to understand that money has to come in some way. How a theater does it is a decision for the administrative heads. I think Mr. Norris would be better served by re-examining his "First-world problem" in the light of the current financial climate.

Many of the comments so far have been focused on the non-profit tax structure.

I am going to take issue with his understanding of the dynamic pricing model and its role in increasing accessibility options for diverse audiences. Not because I am feeling defensive. Rather because the author's deep and obvious misunderstanding of how the process of dynamic pricing works, in addition to a deep and obvious misunderstanding of how the theatre companies who pay him a "comfortable" wage for his work actually balance their budgets each year cries out for correction.

If some congressman or member of the press had written an article with this many fundamental misunderstandings about how our industry actually functions, it would be incumbent upon the community to correct them. Wouldn't you agree?

A playwright does not get a free pass.

Theatre as an art form has always been primarily a place where the well heeled socialized with each other. Shakespeare may have had groundlings galore, but his work was paid for by the lords and ladies in the boxes. The "skyboxes" if you will. In fact, the idea of a skybox in sports arenas was taken from the opera box seats.

This article seems to suggest that there is something new about that or that dynamic pricing somehow caused that. Shakespeare was a "Queen's Man." That patronage was quite literal, and the upper classes who consumed theater were paying orders of magnitude more than the groundlings to sit next to whoever they needed to socialize with in order to increase their stature in society. This dynamic is as old as the theatre itself. Dynamic pricing is neither the cause nor the panacea.

We can (and should) create all kinds of initiatives and tactics to broaden the American theatre's traditionally white, upper middle class audience. Those initiatives can take place right alongside dynamic pricing because the whole idea is the right price for the right person at the right time.

If there is an audience the company wants to cultivate that has a barrier related to price they have a million options at their disposal to be accessible to that audience while still telling the people who wait till the last minute and insist on the same two "best seats in the house" that they will pay extra for that very specific demand. Their paying extra for that seat then subsidizes things like outreach programs, pay your age tickets, rush tickets, student performances, etc. etc.

It also can serve a very important structural role in encouraging patron behavior that is more sustainable and more loyal (and therefore better for the playwrights and artists whose work is supported by that theatre.)

What kinds of behavior does dynamic pricing encourage?

1. Order early for the best price. This is good for playwrights because it lowers the perceived risk of a new show. Strong advance sales reinforce that taking a risk on a new play was worthwhile.

2. Its cheap and worth it to go early in the run, and to sit right down front. This leads to fuller, more diverse houses early in the run that are warmer houses for actors to play to. This in turn leads to stronger word of mouth and a better liklihood that the play develops a reputation as a "hit." I hope I don't need to explain why that is good for playwrights?

3. Increases loyalty and repeat attendance behavior (like membership and subscription) to avoid last minute high prices. Subscriptions are the foundational mechanism by which artistic directors can program work not already familiar to an audience. Subscriptions demonstrate trust in a whole season of work (mitigating risk for new work). And expensive last minute prices encourage subscription.

4. Improved reputation for the work on stage. I know its annoying, but it is still a fundamental fact of human nature that when people hear that someone else paid a lot of money to see a show, they are conditioned to believe that the show must have a higher value than a show that was very inexpensive.

Yes, of course that's ridiculous, but it's universal. We can ignore it, or we can use it to the advantage of playwrights and theaters by subtly training people that work by that playwright sells out and people are willing to pay a lot of money for it.

Now. If every seat in the house was a kajillion dollars from the day the tickets went on sale, then yes, you'd have a stupid velvet rope ivory tower theater situation as the author describes.

But that is not, in fact, how dynamic pricing works.

Dynamic pricing evens out demand by both raising and lowering prices for strategic seats on strategic days in order to fill houses with some people who happily pay very low prices for a seat early in the run in the front row of the house and others who happily pay very high prices for that center aisle seat on the closing night of the performance when everybody and their brother suddenly MUST SEE the show before it closes.

And lets be clear, even with dynamic pricing, you are still only 60% of the way to paying the paychecks of every actor, playwright, director, stage hand, press person and box office rep who made that show happen. Dynamic pricing isn't a recipe for a for-profit theatre. Its a recipe for a theatre that has just slightly more insulation from whatever funding cuts are coming down the pike tomorrow from whichever state, local, or national government or grant funder has decided to take an ideological left turn away from supporting the arts this month.

I am always wary when we cry out for better wages and working conditions for artists on the one hand and decry high ticket prices on the other. There is rarely a magical donor ready to sweep in and cover the difference. And when there is, that donor (like Queen Elizabeth herself) starts having undue influence on the work produced. That's how you end up with the entire western world believing that Richard III was a hunchbacked psychopath.

There are better ways to make theatre relevant to diverse audiences than cheap tickets for everyone. I recommend we get to work on some of those.

I think by getting into the weeds of marketing speak, people may be missing the fundamental point of this article which is if a theater cannot afford to produce the work they are doing without constantly raising prices to levels which make their work inaccessible to the public, should they think about scaling back the level of their productions and operations to a level they can afford.

There is an irony that people have become attached to market based pricing of individual tickets while not applying those same market based principles to their organization as a whole. If the market is telling that they will not fund you to produce at the level you want to, it maybe time for you to adjust to that market in a way to make something that is accessible to the greater public versus maintaining a high level of expense that the only way to continue producing is to cater to a small wealthy percentage.

That isn't the point of the piece. The point of the piece is to claim if a non-profit becomes creative by using market forces to generate revenue then they are "scalping". That Norris does this with complete ignorance to the regulatory environment of non-profits and a reductionist economic argument (really, dynamic pricing is like sky-boxes catering to caricature capitalists - not even worthy of bad farce) is silly.

Actually, I think you will find that the people who understand and use dynamic pricing correctly are the ones most likely to be keenly aware of the pressing need for their organizations to relevant and meaningful to the communities they serve in order to continue to exist. You'll find that dynamic pricing is just one tool being used to increase the quality, quantity and diversity of audiences and to examine every facet of how theatres serve their communities effectively.

Mr. Norris makes a reasonable argument. Whether it is airtight I leave to others. However, not for profit theater companies were supposed to be the better mousetrap: a way to bring interesting theater to communities without relying on the commercial model. But there are good, responsible organizations and then there are those that cater to patrons and donors at the expense of the artists, whose salaries have largely remained stagnant despite, for example, massive capital campaigns. The regulations that govern not for profits have not exempted them from the trend that is nationwide: an increase in courting money and giving influence to those who give money in a way that seems out of whack. That is something that cannot be legislated; it relies rather in a sense of decorum and what's right.

This article has a profound misunderstanding of what a non-profit corporation is. The goal ("it's what is supposed to happen" is not to lose money. That's absurd, and a completely untenable model for survival. The difference between a non-profit and a for profit corporation is that non-profits don't make enough money on top of reasonable operating costs to pay dividends to share-holders. This has nothing to do with the massive struggle we all undertake to pay sustain the salaries of the artists, technicians, and administrators needed to allow the business to function, and to provide plays for our audiences. Where would extra money, were such a thing to exist in this model, go? Back into the company, either into direct expenses (including salaries), or into an endowment. And let's be clear - there are not a lot of theaters out there with large endowments.

As a producer who has always made sure cheap tickets are available to all of our shows, I am acutely aware of the dangers of pricing out audience members. Nonetheless, the dynamic pricing model seems to allow less expensive and more expensive tickets. I don't see the problem with that. If a company has a hit, why should they not be able to increase their revenues - given that they will almost certainly have shows that will not be hits, and will lose money? The author writes that actors and crew don't see increased salaries, and that may be true on a show by show basis. But let's be clear - if the company does well financially, those jobs will continue to exist, and the payment scale may increase in the future. If the company does poorly financially, those jobs will disappear, or become less well paid.

The problem with all of this is that the author, somehow who has written excellent plays, and has made a living in this industry, understands so poorly how it actually works.

More clarification on non-profits from the free dictionary:

"Nonprofit corporations differ from profit-driven corporations in several respects. The most basic difference is that nonprofit corporations cannot operate for profit. That is, they cannot distribute corporate income to shareholders. The funds acquired by nonprofit corporations must stay within the corporate accounts to pay for reasonable salaries, expenses, and the activities of the corporation. If the income of a corporation inures to the personal benefit of any individual, the corporation is considered to be profit driven. Salaries are not considered personal benefits because they are necessary for the operation of the corporation. An excessive salary, however, may cause a corporation to lose its nonprofit status.

Well put. And so disturbing. There is, of course, another end of the "dynamic pricing" spectrum that deserves attention (and applause?) and that is the "pay what you can" nights that some theatres are experimenting with.

And then, I also think, a closer look at Signature Theatre in NY and their subsidized $25 ticket program should be a model to other not-for-profits. Check out Laura Callanan's brilliant talk "The Surprise Social Entrepreneur."

http://www.youtube.com/watc...

The very fact that so many people here seem to be threatened or angered suggests to me that you're onto something. While you may not have captured the details correctly, you've laid bare the essence of the problem, and I share your concerns.

The haughtiness of your tone, both in your comment here and in your comments elsewhere, is unnecessary and uncivil.

I understand that there are important clarifications to be made with regard to non-profit tax law, but the content of Mr. Norris' criticism -- the "skyboxification" of the theater -- is what strikes me as important in this article.

The Courtier's Reply and now Tone Trolling? Look man, if you want to defeat my comments with logic please do but don't advance your argument with the ad hominem fallacy. Sorry, I want the public figures of my profession like Mr. Norris to operate with sound critical thinking and intellectual honesty. I don't think his point is made, nor is our collective interest helped, by his misunderstanding of how non-profits work, a retreat to cliches about Reaganism and citing a philosopher who himself did not understand epistemic concepts like Rawls "Veil of Ignorance".

Thanks, Dominic, for your succinct summation. I think you hit the nail on the head. Many of these remarks seem to suggest that Norris is attacking theatre boards, or donors, or the whole non-profit business model. I don't see him doing any of those things. He's simply acknowledging that the notion of "not-for-profit" is changing, and appropriately questioning what it currently means. It started changing way back when Joe Papp suddenly found himself with two unexpected hits generating millions of dollars - "Hair" and "A Chorus Line." Those shows gave him a cash reserve to try new play initiatives, produce more experimental pieces and help support a few lesser-known playwrights that he personally loved. And in the process, Papp lost most of that money. But however you judge the results, he still put all that money back into the operation and expansion of the Public Theatre, and he had every right to do so. It's up to individual theatres to decide whether to commission a new work by a cutting-edge playwright or put in a new restaurant and bar. They're both ways of attracting patrons to the theatre, and either one is okay by me.

Jon - the funding models of regional theaters couldn't be more different today than when our founders were leading their institutions. Stephen Albert's comments above are spot on. There's more dependence on earned revenue and individual donors than ever before, and it goes back to the Reagan administration.

Gwydion - in your role with the Dramatists Guild, have you found playwrights tend to have a position on dynamic pricing? I've actually found over the years that agents encourage the practice as it raises box office potential thereby increasing royalty payments to playwrights.

Great question, Chad. And hi.

First, I want to be clear that I'm answering not on behalf of the Guild, but as Gwydion Suilebhan, playwright. That was probably clear, but I figure it couldn't hurt... :)

I think it's important not to conflate what agents might be encouraging with what playwrights want. Having said that, inasmuch as its an agent's job to (among other related and unrelated responsibilities) help a playwright earn a living, I am not surprised by your observation.

I don't think playwrights tend to have any one position on anything. (Part of what we do, or try to do, is see a story from multiple perspectives, after all.) Generally speaking, though, I have noticed strong antipathy toward dynamic pricing among playwrights.

An honest confession: most of us don't earn enough money from our writing for dynamic pricing to significantly affect our income, so its easy for us to take what I might call an anti-classist stand against it. To do so costs us, quite literally, next to nothing. Does that discount any concerns we might raise? I don't know.

I say all this, for what it's worth, as someone who opposes dynamic pricing. I'm a fan of radical hospitality -- or, as Jack Reuler has started to call it, hospitality; it hews more closely to my own personal values.

Thought #1: I think most administrators are fans of radical hospitality. The reason it was possible at Mixed Blood was that earned revenue was a small portion of their budget to begin with. At the theaters where I have worked, earned revenue is 60-70% of their total budget, which is mostly box office. If one were to convert a $10 million theater with an earned to contributed ratio of 70/30 to radical hospitality, the theater would need to increase its contributed revenue by $7 million per year (233% increase) at a time when public and private resources are diminishing. Radical Hospitality is an amazing concept but it isn't reproducible at most other theaters.

Thought #2: Bruce's plays are produced by large theaters that use dynamic pricing, so perhaps the incremental revenue Bruce makes on royalties stemming from dynamic pricing at those theaters has led in part to his ability to make a comfortable living in the non-profit sector? And just a side thought - don't playwrights employ dynamic pricing as well? If a play has a brilliant Broadway run, wins a Tony Award and gets great reviews, it has a significantly higher royalty than perhaps other plays by the same author - which is understandable and I believe justifiable.

I think this issue can be viewed from multiple angles. I heard earlier this year that a non-profit theater in the United States was charging a base price of $400 to see a celebrity in a limited engagement play. Is that excess? I think most would agree that it is. But the devil is in the details as I argued in my blog post on the subject above. Dynamic pricing in itself isn't inherently good or bad - it is how theaters use it that really matters.

I'm willing to guess you're right about administrators and radical hospitality. We all love the art we make and we would love to be able to share it with as many people as we can. I bet they are, in fact, fans.

Like I've said, I'm a fan of radical hospitality, too. Having said that: I don't think it's the right or only model, or even the morally superior one. It just feels better to me than dynamic pricing.

I'm sure that's true about Bruce and his plays. But that actually seems to strengthen my impression of his convictions, no? If he'd be willing to forego income by eliminating dynamic pricing?

I don't think it's fair to say that playwrights employ dynamic pricing. That may be true for some of us in some instances, but the bulk of us? Not so much.

I do think there are multiple angles to be considered here for sure.

Mr. Norris makes a reasonable argument. Whether it is airtight I leave to others. However, not for profit theater companies were supposed to be the better mousetrap: a way to bring interesting theater to communities without relying on the commercial model. But there are good, responsible organizations and then there are those that cater to patrons and donors at the expense of the artists, whose salaries have largely remained stagnant despite, for example, massive capital campaigns. The regulations that govern not for profits have not exempted them from the trend that is nationwide: an increase in courting money and giving influence to those who give money in a way that seems out of whack. That is something that cannot be legislated; it relies rather in a sense of decorum and what's right.

I have to say, Chuck, I can see what he's getting at here, misrepresentations aside. And there are some core things in his analysis with regard to how pricing structures are set up in major regional theatres (and smaller ones too) that are extremely problematic. So while there are issues with his understanding of the tax sides of things, he's not wrong in provoking a conversation about "dynamic pricing" and the elitism of theatre-going that can directly result. We see it every day here in Chicago. So, invalidates? I dont agree.

I think it comes down to what we see as the point of the article. For me, its the questions of "are we perpetuating inaccessibility to our art within our own 'not-for-profit' methodologies?" and "where is the money going as ticket prices are kept high, if its not going to the artists or to create circumstances by which ticket prices can be lowered?" I think Writers Theatre is an amazing example of knowing where the money is going. Now, the tickets are pricey, by comparison, up there. But in the more than 20 years that they've been around, they are only now raising funds for a new space. And I was just at their bigger space last night - and there isn't that "cocktail lounge" or anything fancy pants like that. Hell, they still operate their small space in a bookstore. And this is a multi-million dollar company. So where have they put their money instead? Into their staff. Into their artists. They pay some of the best rates in Chicago, period. And I know from personal experience what compensation means to Michael, how important it is. Plus they put money into some fantastic developmental initiatives for playwrights. So they've invested in the actual production space, in the artists themselves, in the staff and offices to make sure the business is running as best as it can. Now as I said, the tickets are still pricey. BUT there are also some fantastic discount opportunities available, rush tickets, industry deals, that do serve to keep their work accessible.

These are the issues I read into from this article. I do not dispute the problematic nature of his definitions and analyses of non-profit structures and tax exemption. But the issues he has diagnosed are not invalid either.

Josh - I'm curious to understand why you (and others) believe dynamic pricing is a cause of elitism in theater.

I don't think that there's anything about dynamic pricing that makes the price of tickets unobtainable. When ticket prices are increased, it is because a great many individuals have already purchased them at a certain price which was reasonable enough for them to commit. The inverse is also true.

Dynamic pricing as a concept is not contingent on the original price of a ticket. It could be applied by raising a $5 ticket up to $7. It is also happening when a $500 ticket goes down to $400.

What I wonder about, and perhaps this is what you mean, is if the "fundamental" price of theater tickets that afford a tremendous vantage point are priced too high, and that this hurts the potential market for some theater companies. This might be true for some, however I personally have not found many groups in non-profit theater where I could say that this is absolutely true and happening.

It's a funny conversation. I've had it with some artists who want open access to their work at as low a price as possible, while other artists have expressed to me that a lower ticket price insinuates that the "value" of what they do is then less, which feels uncomfortable. I think at the end of the day, they want a full house and a standing ovation, and staff and board surely do too. Dynamic pricing, and initiatives that reward early commitment, are a very good middle ground to take.

As a group of about 25 of us from CATF prepare to travel to Louisville to see around-the-clock new plays at Humana, I find this portrayal of trustees really sad and wrong. The board members I know are deeply engaged in the work and have a tremendous amount of love, admiration and respect for the artists that share their talent with us during our summer season. Come to Shepherdstown, WV, Bruce Norris, this July and let us change your mind.

Troubling to see a theater insider believing - and disseminating - so much misinformation about the nature of non profit theater. Other comments do well the job of explaining things.

This is a dangerous article. Fundamental lies (or hopefully, misunderstandings) about what being a 501c3 public charity are being spread. The two key points of what operating a not-for-profit in the US (per the iRS guidelines) are: *must ensure that its earnings do not inure to the benefit of any private shareholder or individual

*must not operate for the benefit of private interests such as those of its founder, the founder’s family, its shareholders or persons controlled by such interestsPassing that test (plus a few others related to the direct purpose of the programming) allows an organization to be approved for public charity status, allowing an exemption from SOME local and federal taxes, and more importantly, allowing donations to be tax deductible charitable giving.

The mission statement of many organizations is not (necessarily) to put as much money as possible back into artists hands. That's why we are lucky to have (at the resident level) several well managed trade unions representing labor. And, many organizations make a commitment to artist salaries anyway. And almost ALL organizations pay playwrights a percentage royalty.

The mission statement of many organizations IS to put revenue back toward the organization, to allow it to continue to support its values and enact its vision for the world. This is not a bad thing. Spending on capital (such as a lobby bar that allows for more revenue opportunity, thus allowing more artists to be on contract) is a perfect example of the age old adage "you have to spend money to make money."

And as we all know (I hope) corporate and government funding is at an all time low! Individual giving is the future of arts support. Catering to those people at a slightly higher level so that they can subsidize tickets for school groups and other communities is NOT a bad plan, as long as the organizations eye is still on access. And when individual giving is still growing for an organization, finding ways to increase (so-called) earned income is not a crime. If the organization has made a commitment to access, subsidizing that with higher premium-seat ticket prices is not a crime. It's good business.

And for a business to succeed, it has to be good business.

I wrote about my thoughts on the nonprofit variant of dynamic pricing a few years ago when I was the Director of Marketing & Communications at Arena Stage. Here are my thoughts if anyone is interested: http://arts-marketing.blogs....Just a point of clarification as well - as Patrick pointed out, some non-profit theaters do pay taxes. I know that Milwaukee Repertory Theater pays more than $300,000 in sales tax each year for example.

Non-profit and not-for-profit are interchangeable and each is used today. They are synonyms. I represent them as my client. The term has never meant the institution registered as such can't make a profit, nor does it mean that the institution must lose money. It means that they are not a publicly traded entity, in thrall to shareholders. They are a mission-driven organization meant to operate towards that mission because it is considered a public virtue, or operates to advocate for a consortium of professional interests. For example, The NFL is a not-for-profit entity (they don't pay taxes and they don't lose money). The inability for leading theater artists to be knowledgeable of how the world operates jeopardizes the world in which theater wishes to play a larger part. Bruce Norris is a good writer. That he wrote such a poorly reasoned and cliche ridden point-of-view, and HowlRound published it makes theater artists look insular and uninformed. This column is idealistic twattle that does not understand how the world works.

As a non-profit management student, this is a very scary article.

"Our theatres don’t pay any taxes. And the reason that we don’t is because we lose money. Intentionally. It’s what’s supposed to happen" ... is not true. At all. First of all, non-profits do pay some taxes, though not all. And one reason we pay fewer taxes is because no one 'owns' the organization and therefore no one is allowed to walk away with cash profit. There are many other reasons we pay fewer taxes, including the fact that the activities of a non-profit often don't bring in revenue (besides donations) or are difficult to sustain under a traditional business model. It is absolutely not because "we lose money."

Let me be very clear: Any organization that loses money every year will close. Period. It may take some time because our culture is very tolerant (and even celebratory) about debt. But every organization, for-profit or non-profit, must bring in more revenue than expenses or they will close. Non-profits not only *should* make a "profit" every year, they *must* do so to stay alive! And to build up reserves, to expand, to pay down previous debt (!), or whatever else they want to do. Non-profit does not mean no profit. It means that no individual gets to pocket whatever profit there may be.

You have some very salient points about where the proceeds from dynamic pricing are going. I agree with you: increased revenues should go back to artists and line staff, not to executives or major donors. And your points about access are very valuable. We can't let the fact that some people will pay $200 for a ticket mean that folks who can only afford a $10 ticket are shut out.

But dynamic pricing is not inherently evil. It has been an incredibly valuable tool for arts non-profits across the country to cope with decreased government funding, decreased philanthropic giving, and decreased ticket sales, and allowed them to keep their doors open. Is it a cure-all? No. Should it be used in moderation? Yes. Are there other solutions to these problems that should be explored? Absolutely!

You're completely right that we should not turn arts non-profits "into yet another clubhouse where the velvet rope is preferentially pulled aside for those waving the largest wads of cash." But the problem is maintaining access for those without the wads of cash, and THAT is what we should be criticizing theatres for not doing. Dynamic pricing should be one strategy for paying for that access, because somebody has to.