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Business models:
happy break-ups

Laughing could cost you

To increase attendance (and attract a lot of attention), a Barcelona theater made their audiences pay “per laugh”. This new way of pricing events may be a sign of more changes to come in arts and cultural business models.

30 cents per laugh

At Bareclona’s Teatreneu, audience members pay for tickets on their way out the door. Prices are calculated per head… or rather per cheek, since comedy show ticket prices are based on the individual’s number of laughs–at a rate of 30 cents per chuckle. Using a system of cameras installed in the seats and connected to facial recognition software, each audience member’s reactions are analyzed in real time to determine their ticket price, up to a maximum of €24 (equal to 80 laughs with no extra charge for additional outbursts). At an average of €6 per ticket, the result for the theater is an additional €3,000 to €4,000 in earnings per performance. Unsurprisingly, the marketing campaign created quite a buzz, but the initiative has also caught on elsewhere in Spain and abroad, which could pave the way for more “Pay-Per-Laugh” models to come.

Cheaper tickets for flops?

The Catalan example represents an economic and cultural shift that is shaking up the theater world and ushering in a trend of on-demand pricing. It’s a refreshing change in a business where ticket prices rarely take into account the quality of a performance or the length of a film.

Yield Management, which has already proven itself in the airline and hotel industries, is now being introduced at the box office. Ticket prices fluctuate in real time based on audience engagement and demand, to offer the right price to the right person at the right time. This means that each show is tackled individually, with a variety of predetermined seating options and a wide range of prices. This dynamic ticketing model uses software specialized in customer relations that adapts pricing by analyzing customer profiles, expectations, seat availability and performance duration.

And it works. The Metropolitan Opera in New York, one of the first to use this system, reported an average increase of 7.6% of all tickets sold after expanding its menu of ticket prices. The same goes for the Mogador Theater, Paris’s new hot spot for musicals. Each performance is analyzed daily and a software program updates prices in real time. The theater owner enjoys larger profits and each audience member feels like they paid the right price.

Cultural outings at the last minute

Digitization has affected more than just ticketing. New services are emerging to bring cultural event attendance into the digital era. In particular, online booking systems and tools are evolving. Venues are diversifying the ways customers can purchase tickets: on their websites, through special offers on private sales sites, and via a new kind of mobile app.

Chronoscènes, an app launched in late 2015 by a start-up in Lyon, France, sells seats the day of the performance. The app enables users to search for events using geolocation, to consult reviews, get recommendations and more. Tickets are extra cheap to help venues fill empty seats.

Ultimately, these features aim to personalize seat sales for shows and events. Is it really “digitization to the rescue ” for actors and singers? Don’t laugh–it could cost you!

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