The notion of forecasting sales is common across all businesses, but in the performing arts there can be a large number of variables which make predicting ticket sales a complex area.
The main influences to consider when setting ticket targets include:
The current economic climate
The state of the local economy can have an impact on spending habits and disposable income. Understanding the current climate can help inform ticket price points and ranges– are most people looking for a cheap night out or is there strong demand for exclusive experiences?
Relevant cultural trends and evolving tastes of audiences
Knowing what’s hot and what’s not is important, as fashions change in the arts just like everywhere else. The stage version of a TV show that is rating well might be a good bet now, but in three years’ time it could be of little interest.
Pricing of competitors offerings (be it performances or other leisure activities)
It makes sense to know what market you’re competing in. How much are similar shows at other venues? Your price doesn’t need to be the same, but by understanding where you sit in the market you can tailor the marketing message appropriately.
What your gross expenses are and what your required ticket price needs to be
It goes without saying that in order to predict how many tickets you can sell, you’ll need to know what your fixed and variable costs are. Your organisation probably also has some kind of ticketing benchmark or established price point that you need to take into consideration.
Knowing the influences that can affect your ticket price and sales is important, and by being aware of the bigger picture and the way your organisation works, you will be able to answer many of these questions easily. Once you know what your influences are you can begin calculating your actual ticket projections.
There are many tools and techniques for projecting sales, ranging from simple back of the envelope calculations to much more complicated methods. This paper from the University of Pennsylvania on Forecasting Event Ticket Sales uses complex predictive modelling to generate ticket sales forecasts. It’s an interesting concept, but it’s questionable whether or not a mathematical equation can take into consideration all the influences listed above. However, predicting gross box office is certainly big business in Hollywood, where a number of companies use geo-patial modelling and predictive analysis to forecast which film will be the next big hit.
More relevant to the performing arts is this paper from the International Journal of Arts Management on ticket sales forecasting methods in the UK. In essence, the research found that the more professionally forecasting was undertaken, the more accurate the results, and that relying on “gut instinct” alone wasn’t as successful as carefully considering relevant trends and influences.
Once you have a good understanding of your selling environment, some of the techniques and tools that can assist with ticket sales predictions include:
Evaluating historical data from the same or comparative productions
This information is really important, as it allows you to analyse how many, and what sort of tickets other productions actually sold. Sometimes it’s hard to get the data from competitors, but if you can, it can make interesting reading. A show that was touted as a box office hit might not have sold as many tickets as you thought.
Accessing relevant market information
Increasingly arts organisations are using CRM (Customer Relationship Management) to track ticket sales data and analyse it for trends and useful buying information. You should also look at press reviews and be aware of industry discussion that might have a bearing on the success of your production. Social media can be great for this.
Undertaking a sensitivity analysis
This can be the most important tool in the art of predicting ticket sales. A sensitivity analysis will help you make sense of all the information you’ve gathered. This is where you factor in all your expenses and revenue and compare them on a sliding scale with audience capacities and numbers of performances. Usually a spreadsheet, it could be fairly simple or complicated depending on the number of variables you want to use.
While there is certainly an opportunity for science to be applied in modelling ticket sales predictions, I do believe that understanding trends and influences in the industry is really essential to ensure your ticket sales projections are realistic.
