Topic 4 Price
Pricing the cultural product is a difficult challenge, particularly for non-profit organisations, as they cannot match the cost of the cultural product to its selling price. Non-profits must lower prices, living up to their social mission, namely making culture accessible to everyone regardless of economic standing.
Non-profit cultural organisations usually offer relatively low-priced tickets or a wide range of prices, to accommodate different audience segments and still support the organisation’s income from entrance tickets. A characteristic example is the prominent Vienna State Opera, with ticket prices ranging from €18 to €287 for opening nights. Last-minute standing tickets can be also purchased at €3, technically excluding no-one on financial grounds.
Other theatres offer last-minute low-priced tickets for unsold seats, despite the questionable benefits of this pricing strategy: it may help perform at fuller houses, but it motivates audiences not to pre-book their tickets. Thus, the organisation gets little input on expected audiences and cannot plan on secure ticket income.
Source: Wiener Staatsoper
The Price of the cultural product is defined by taking into account a number of factors:
- The cultural organisation’s mission, strategy, and objectives.
- The cost of the cultural product (although in non-profits ticket income can very seldom match up to the product’s actual cost, due to the limitations dictated by the social mission and the high production costs of cultural products).
- The product’s exclusivity: opening nights, special holiday performances, star-casting, and premium seats are usually priced higher, as they are linked with special occasions or specific visitor needs.
- The pricing strategies of competitors and the price of alternative similar products.
- The Demand and Supply rule, which is linked to the value the customer assigns to the cultural product.
- The general state of the market and of people’s finances.