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Wednesday, April 10, 2013

HD Transmissions at the MET and the Real Loss of Revenue

For the last four years, I have been writing on and off to the Opera-L List that Peter Gelb's HD broadcasts will kill a major revenue stream for the Metropolitan Opera.  That revenue stream would be "butts in seats" in the Metropolitan Opera House at regular house prices.  Anthony Tommasini wrote an article on this very subject which published in the New York Times on March 13th. Tommasini's Article on Gelb's HD performances
I hate to say, "told you so" but I will.  You see, "butts in seats" is the lifeblood of any theatre, whether it be opera, musical, legitimate stage, or a concert.  You can have any number of side shows, however, they will never make up the revenue gained by a filled house.  These days I get regular reports from my subscription friends that one can roll a bowling ball down many of the aisles and not clip and ankle.  That's a tragedy.
Mr. Gelb brags about his experiences from the "school of hard knocks" rather than spending time in the hallowed halls of a University.  Chip Brown's recent NY Times puff piece on Peter Gelb  However, the lessons he could have learned in a University would have taught him that his HD model from the outset was going to cost him alot of money.  As he never learned those lessons, nor ran a theatre in one of his past incarnations, there is reason for his screw-up which he now has finally had the inestinal fortitude to mention and he calls it "cannibalism".  Frankly, if he spent any time watching sports in the New York area, he could have learned the lesson which would have saved his revenue stream.  But that's not Peter Gelb's history, he forges ahead and then attempts to deal with the problems which could have been avoided later.  The old adage, "measure twice and cut once", has never been his hallmark. (Just one example is Gelb approving the "Ring" sets which were not made in the MET scenic shop and in Lepage's instead to save money, were delivered, did not fit properly and had to be sent back to Canada with members of the MET scenic shop at great expense to redo them. A real amateur hour decision that cost the MET real money.)
You see, sports in New York City is only broadcast in the local area when the house is full.  Sure they receive some revenue every time a game is shown on local elevision, but not the same revenue as the teams take in when the house is full and receiving broadcast payment.  The iconic Yankees have been doing this for a long time and have experimented for years with the concept.  If Gelb had paid attention to those who came before in the television medium, he would have learned the lesson without sacrificing a dime.  By not doing research, he has transferred any number of reliable ticket buyers to the cheaper seats of the movie theatre.  Sure, he clears out any number of NYC nursing homes on his weekend broadcasts to the theatre.  I've put that one to the test and have gone to several transmissions at several theatres and truth be told, the handicapped section is rowdy, filled with wheelchairs with oxygen tanks.  In that case he is performing a mitzvah and giving Seniors who would be otherwise bored playing bingo on a Saturday afternoon something extra-cirricular to do.  But look at the able bodied in the house and see the revenue lost as many are real in-opera-house ticket buyers.
It took Mr. Gelb 6 years, yes 6 years of watching an emptier and emptier theatre before he finally decided to lower ticket prices. They are paying him over $1.5 million per year and he's making mistakes of this magnitude.  Another business example which he could have remedied with business school. (I learned this one in a business class in the 1980's.)  Wal-Mart is the example.  You see, Wal-Mart lowers their margins on certain items to bring customers into the store, customers like lower prices and go to them for the products they need.  Gelb claims he wants to make the MET "less stuffy", that means ticket prices are no longer sacrosant.  You see, it's better to lower your ticket prices to a reasonable point where you will make money and fill the house, rather than sitting on high priced tickets which do not sell. It's been an economic disaster over there.   It also keeps you from going to "little old lady land" when you can pay your staff from money earned, rather than begging for donations.  His next move should be to NYC off from HD movie house events and at the same time, also stop the transmission from movie theatres for a 50 mile radius; the same rule the Yankees employ before they agree to allow their team coverage on television.  Sure if he could fill the theatre, then you run the HD transmissions, but if you can't fill your theatre and one of the real problems is your HD transmissions, you don't keep running them in a movie theatre steps away from your own theatre, or even within the confines of the island you call home.  Keep in mind it is also really easy for folks from New Jersey, the Stanford/Greenwich part of Connecticut, or Philadelphia to stay home and pay substantially lower price tickets at the theatre and not brave the traffic.
I challenge the Board of the Metropolitan Opera to get involved with what your director is doing.  the financial future of the house is at stake and right now the reality is not pretty.  Though the leadership of the Board at present inherited the money from her business saavy husband and the MET shakes her down for land grant donations every year, she does not appear to be marketing saavy, or she would have done something about this already.  However, there are titans of industry on that board with real marketing experience who have not stepped up to the plate and said there is something seriously wrong here.  Based upon the success of the HD program and the failure to bring clients into the House, it would seem the MET could rent a sound stage and just present HD opera.  But that is not their mission.  Their mission is to present opera in a theatre and to keep the theatre filled.  Get involved, look over Mr. Gelb's shoulder.  Remember, you hired a guy with no theatrical experience.  He had never run an opera house or a theatre in his life.  You bought into his ideas, but did not second guess anything he did until he ran into trouble last year censoring blogs and attempting to silence Opera News.  Mr. Gelb needs oversight, he has no MBA, nor does he have a bachelors degree.  His previous work experience had nothing to do with the presentation of opera.  Sure he has a success every now and then, but they are few and far between, as they say down South, "Even a blind squirrel will find an acorn now and then."
By the way, I am your audience, I am in the business, I used to go to the MET on a weekly basis.  I know far more about opera than Peter Gelb will ever know and I will not pay one penny for a ticket, nor accept a ticket from anyone at present.  I am also not alone.