How Telemarketing Helped Sink the Metropolitan Opera
Already in crisis, the Metropolitan Opera now faces a new problem: the contrast with Broadway. The reopening of the New York theater mecca on September 14 presents a very bad look for the opera company if it can’t open the doors of its 3,800-seat house on September 27 as scheduled.
And one of the Met’s three major unions — the one for the currently locked-out stagehands — has brazenly announced that the house has no chance of opening any time this year.
The chorus, musicians and stagehands have all been asked to take 30% pay cuts for the foreseeable future. While the chorus may have tentatively acceded to something like that, the stagehands have firmly said no. The orchestra musicians not only have balked but almost half of them have moved away or retired.
Met General Manager Peter Gelb would like you to think that the cuts are needed because there was no ticket revenue over what will end up as an 18-month pandemic and no one knows how many people will travel to New York anytime soon. But in reality, the cuts speak to the revenue situation at the opera house before anyone had ever heard of the coronavirus.
The Metropolitan Opera does have very high expenses owing to generous collective-bargaining agreements with its very talented musicians and other artists. They can pull down compensation packages of $200,000 or $300,000 a year that can surprise the general public when they learn about it. But in this way, the Met operates less like a typical performing arts organization and more like a hotel chain or airline.
In those businesses with very high fixed costs, the occupancy rate makes all the difference. Stuff 85% or more people into the available rooms or seats on a given night or flight, and the business is golden. Put only 65% of people aboard and the crushing fixed costs win out. The profit-and-loss swing between the two occupancy benchmarks is strikingly steep.
With amazing precision, the trend at the Met has followed this same vertigo-inducing pattern. Sure, the days are gone when the opera house was filled to the brim every night, but that should be okay. When Gelb became general manager in 2006, American opera was still benefiting from the tail-end of an uptick in interest from the “Three Tenors” era.
Overall season occupancy reached 88% in Gelb’s first two years before the 2008 financial crisis hit. By the end of the last decade, the relative infrequency of sellouts as well as half-full houses for non-marquee operas pulled season occupancy down to a dangerous 67%.
Gelb and the Met appeared to attack this problem in exactly the wrong way. Every new patron that they did get seemed to become a “mark” for the company to make up the revenue gap.
Professional telemarketers started calling these green opera attendees as well as some more experienced patrons. They would begin the discussion by pretending to be interested in helping them select the next opera to attend. But a little probing — I received these calls several times — revealed that they were not really qualified to talk about opera.
What they were really interested in doing is lecturing patrons that “ticket prices only cover a fraction of our costs.” In one of these calls I even got a speech about that fiscal year’s $20 million operating deficit at the Met, as if that were my problem rather than Peter Gelb’s.
Then I’d hear a pitch/demand for an additional donation. It was often couched in the language of a membership in the Metropolitan Opera Guild, but it was a donation nevertheless. The donation price points matter here as well, as Guild membership doesn’t amount to very much in benefits, such as ticket priority, until at least the $150-a-year level.
From the patron standpoint, the problem here is three-fold. First, name another product or service that announces after it’s won a new customer that they underbilled you and you’re not welcome back until you fork over more dough for the first time.
Then there’s kind of a “class” issue. From a day-to-day mathematical standpoint, the most valuable customers would seem to be those paying for the fanciest orchestra and lower-balcony seats. But from a long-term strategic standpoint, arguably the most valuable customers are in the top balcony levels paying the cheapest seat prices. It’s those largely younger and more diverse sets of people developing the habit of opera-going that form the sustained financial basis of the Met’s survival, provided they’re not lectured that they’re not pulling their weight.
Finally there’s a basic strategy issue. The Met’s goal with any new patron should have been to get them to tell five friends about how exciting it was to attend the opera and bring them all the next time. The funny thing is that the Metropolitan Opera has a lot of advantages and assets to sell in service of this strategic goal if they would stop trying to make their operating deficits the customers’ problem.
The seating in the theater is more comfortable than in the typical Broadway theater, where the audience rows are often jammed up against each other. There’s no chance of missing the story in an opera because of the English titles on the seatbacks in front of you, compared to Broadway’s blasting of amplification that often seems disconnected from whoever’s singing or speaking on stage.
And the opera intermissions are longer and can be more of a party, especially at the upper balcony/bar level that inevitably attracts a fun crowd on La Bohème nights, compared to the rushed crush of bodies in a Broadway intermission that always ends in a mad scramble back to the seats for Act 2.
From the company standpoint, the dialing-for-extra-dollars strategy misunderstands the nature of building a customer base. Noted San Francisco-based orchestra consultant Aubrey Bergauer calls it a “scarcity mindset” that seems related to a weird insecurity that infects classical music organizations throughout America about getting and growing audiences.
Making essentially the same extra demands of every opera newbie that should be reserved for Mr. and Mrs. Moneybags of four decades’ patronage interferes with the proper “viral mindset” about audience development. In that mindset, new patrons are encouraged to post their own social media posts and engage in the same enthusiastic bar-talk and watercooler-talk about opera that they might about sports, rock concerts, or other recreational activities.
In my performing life I’m a theater musician and music director in the Washington area. I often suggest to actors, techies and theater fans here that when they travel to New York, they squeeze in one trip to Lincoln Center between the astonishing number of Broadway shows that these people can manage to attend over one long weekend.
One time an actor friend of mine did just that and took his family to see an opera at the Met. Upon returning home to Washington he almost immediately got a telemarketing call demanding that he make up the gap in the Met’s expenses in putting on that opera. He was so disgusted that he announced on Facebook that he was never going to the Metropolitan Opera again.
In reality, no amount of temporary extra dollars raised from those who acquiesce to the telemarketing pitches can change the fundamental dynamics of the 85%-65% attendance swing between success and failure for high-cost operations like airlines, hotels, and prestige opera companies. Dialing for dollars may be a skill that some sellers of products and services profitably employ. But when it comes to deepening a level of patron loyalty that would get a major cultural institution out of a pandemically induced shutdown, it’s done more harm than good. In preparation for the next crisis, it might be best to lay off the phone lines unless you really just want to talk about opera.
David Rohde is a Washington-based theater music director, pianist, vocal coach, and writer on both classical and popular music subjects. Follow him on Twitter @DavidBachToRock.
