Free tickets? How about income-sensitive tickets?

On Monday, I posted a note about a new program from the Highland Street Foundation to pay for free museum admission on Fridays at various Massachusetts cultural institutions during the summer. There are similar programs in other cities, such as Target Free Fridays, not to mention more traditional access programs like student discounts or rush tickets.

These strategies are certainly welcome antidotes to the often eye-popping prices of mainstream big-ticket arts events. In essence, arts organizations already pursue price discrimination to a significant degree, making it possible for both high payers and low payers to experience the art by having the former effectively subsidize the latter. But the instruments used to identify such consumers are quite blunt, aren’t they? I mean, take senior discounts for example. Sure, many elderly folks basically live off of Social Security and aren’t in a position to pay $200 for a seat in the orchestra section. But on the other hand, many of the museum’s or the opera’s biggest individual donors are probably over 65. They certainly don’t need a senior discount. Or take the free Fridays – it’s pretty easy to imagine a family that was planning to come on Saturday deciding to go on Friday instead to save some cash. In that scenario, the foundation’s grant amounts to little more than a boost to that family’s expendable income. Is that the most efficient way to accomplish things?

If this is really about expanding access to the arts, why not make tickets income-sensitive? All of this classifying and filtering of customers into students, seniors, non-tourists, etc. basically amounts to a guessing game about their income. If a customer exhibits certain behavior or characteristics, the logic goes, s/he is more likely to be in need of subsidization. But why not just go to the source?

Educational institutions have this down to a science. Instead of guessing about students’ financial situations, they have the students and their parents fill out a series of federal and school-specific forms and submit their tax returns, so as to make a determination about just how much financial assistance each faimly really needs. Invasive? It sure is, but considering the amount of money to be saved, I don’t hear too many people complain about that. And hey, no one’s holding a gun to anyone’s head to apply for financial aid. (For the record, I was able to attend Yale College at an approximately 80% discount thanks to that institution’s generous financial aid program, which has only become more generous in the intervening years. If I were a student there today, my parents probably wouldn’t be paying a thing.)

Here’s how this could work in the arts. A city-wide agency, like the local cultural council, could offer an “Art Card” to all residents. Eligibility would be based on financial aid criteria like that described above, particularly tax returns. This information would be fed into a formula that would then be connected to the resident’s account with the city agency. The Art Card would then act something like a supermarket loyalty card for its holder, with a preset individualized discount off of any posted price for participating organizations. So say I want to go to City Opera. I buy a $50 ticket, present my Art Card to the box office or the website form, and am told that my price for this ticket will be $37.16 based on my personal financial situation. This setup would be expensive to implement, but it would be fundamentally fair — and would have the additional benefits to participating organizations of allowing them to dispense with other hard-to-verify discounts and raise prices on their highest-income customers (just as colleges and private schools have been doing with tuition for years). It also benefits residents and extracts value from tourists, something any local government should be able to get behind. And if institutions are reluctant to play along, the city could always make participation in the program a requirement of receiving grant funds (at least for its largest institutions).

I realize that there are some potential holes to be plugged, but I’m interested to know what people think. Is there any reason, besides political will, why something like this couldn’t work in practice?

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6 Comments

  1. Jodi SC
    Posted May 28th, 2009 at 8:03 am | Permalink

    It’s an interesting idea, but not sure if I like the idea of everyone having a card that classifies them by income. Isn’t it a bit like a caste system.

    I think the organizations need to take a bit more time to do due diligence in identifying pockets in the community that are truly in need.

    This actually promotes communication with their audiences and potential audiences, something institutions need to do much more often.

  2. Ian David Moss
    Posted May 28th, 2009 at 10:01 am | Permalink

    Hi Jodi,
    Thanks for your comment. You have a fair point, but remember people don’t have to participate if they don’t want to. I was thinking about this overnight and realized that if you really wanted to make things private, you could make it so that the card could ONLY be used for online transactions – that way, no one knows what you paid for the ticket, or even that you have a card at all, other than the box office manager.

    And adopting the program would not be inconsistent with identifying communities in need. In fact, ideally it would be a complementary strategy, since just making the discounts available won’t automatically mean that people will take advantage of them.
    Ian

  3. Chris Casquilho
    Posted May 28th, 2009 at 1:13 pm | Permalink

    The idea is based on the supposition that people can either afford the list price, or they can’t. Here’s an easy solution: all shows, all seats one fixed price. Then have certain nights designated pay-what-you-can. Before critiquing, think through how people behave and what incentives are in play.

  4. Ian David Moss
    Posted May 30th, 2009 at 8:21 pm | Permalink

    OK, Chris, I’ll bite:

    As far as incentives go, it seems to me that they imply everyone will go to the pay-what-you-can night and pay $0, since no one will tell them that they can’t, until the “free” seats are all taken up and then anyone left over will be stuck with paying for seats on the “not-free” nights. At least, that’s what an economist would predict. Now, you asked me about “how people behave,” so I take it that you and I both know that economists are full of shit, and that of course not everyone will freeride on the pay-what-you-can nights. However, a few things do seem likely: (a) generally speaking, the pay-what-you-can nights will tend to draw a lower-income crowd than the fixed-price nights, assuming the fixed price is not extremely low; but (b) on the other hand, not everyone at the pay-what-you-can nights will be lower-income; (c) not every high-income person at pay-what-you-can will pay in proportion to their wealth (in fact, most of them probably won’t); (d) there will be some people who would have gone to the pay-what-you-can nights but can’t because of schedule conflicts, and can’t afford the fixed-price nights; therefore, you lose their business for no good reason. So, I fail to see how this gets at the solution any better than the status quo of having set differently-priced seats every night. Also, your idea could work for genres like theater in which there are recurring runs of shows, but not for one-night-only events such as most concerts. The Art Card proposal does not share this problem.

  5. Posted July 30th, 2012 at 2:44 pm | Permalink

    I really like this idea, and I agree that the current ways of offering discounts paint with a pretty broad brush, but I think there are a number of potential obstacles worth chewing on. I do think there’s enough stigma around income that presenting the concept of an Art Card as a sliding-scale fee card might discourage people from using them — presenting them as loyalty cards or rewards cards, even with the same structure behind them, would likely work better. If they are designed to make art institutions accessible for people with low income, having the cards only work online would be a barrier, because many low-income people have limited computer and internet access.

    A potential negative side effect of having a local cultural council issuing the cards is that a lot of people assume that their local arts organizations have a lot more government funding than they do, (or assume their local museum is actually government-run, rather than being a nonprofit) and government -issued art cards could feed into this assumption. People might assume the state or local government is subsidizing the tickets, and those who are paying full price might complain. Still, I agree that having a system where the cultural council is the one handling the paperwork would be best for security and privacy. I think the way to prevent the assumption that the tickets are government-subsidized would just be good and careful marketing.

    P.S. I found the article while browsing the archives; I know I’m a bit late in joining in the discussion!

  6. John Carnwath
    Posted February 19th, 2013 at 10:20 am | Permalink

    I realize this is an old thread, but since you recently referred to it perhaps there’s still some life in it.

    While doing some research in Germany a few years ago, I recall hearing that the City of Stuttgart implemented a system along these lines, but they did so on a much larger scale. As I recall, a whole bunch of social services (food stamps, school lunches, etc.) were included in the program along with discounts to zoos, cultural institutions, etc. To avoid the stigma that Tegan mentions, which might keep people from going to the opera because because they don’t want to be seen paying for their tickets with food stamps, the card was issued to ALL residents–whether the card holder receives a large discount or a small one is thus largely invisible. While giving wealthy residents discounts for using the card (even small ones) might seem contrary to the whole purpose of the program, I believe this was intended to ensure that subsidies these organizations received from municipal taxes benefit local tax payers rather than foreign visitors (only residents can get the card).

    I might have some of the details wrong, so please don’t quote me on this. I also haven’t heard anything about how successful this program has been. If I get a chance, I’ll see if I can dig up some more information on this and provide an update.

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