Wednesday, April 15, 2015

Met Live in HD: Creating a Blue Ocean in the Nonprofit Sector

According to the reading, a blue ocean defines itself through differentiation and low cost. These endeavors need to be pursued simultaneously in order to achieve value for customers and create new demand. The readings all focused on for-profit products and services from computer components to movie theaters.

The nonprofit sector, however, is limited in the processes advances it can achieve because the arts are, overall, labor intensive endeavors. A symphony needs its musicians and a theater production needs its actors and stage crew. A live performance, therefore, has an extremely high fixed cost. No matter how long a show runs it will have the same fixed costs for labor; a director cannot find efficiency in actor or musician labor.

The Met Opera, who has extremely high costs due to the extensive sets, costumes, singers, and full orchestra. Tickets, therefore are also very high and often price out a large population who may have interest seeing the production but cannot afford it. Tickets to this April 25th’s production of Cavalleria Rusticana / Pagliacci production range from $30-$400 per ticket. Although the institution is able to provide a very wide range of ticket offerings, $30 may still not be feasible or seem accessible to some individuals. It also means that to experience the Met you have to go to NYC.

Even though the Met seemed to be locked into the traditional paradigm of high ticket costs, they were able to create a blue ocean by completely re-framing their offerings and introducing Met Live in HD. This program brings select productions into theaters across the country. Now, any audience within a reasonable distance of a participating theater is able to go see the production at a reasonable price. For example, audience members can see the live production of Cavalleria Rusticana / Pagliacci for $24 as an adult. Although it is only $6 cheaper than the cheapest live seat, the audience is taken on stage and backstage of the production. They are therefore receiving the viewing value of a $400 ticket (relatively speaking).

So although difficult, arts institutions can still make a blue ocean in a sector that seems driven by the bottom line of survival and relatively high ticket prices.

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