Tip You Might Be Able To Use

by:

Joe Patti

With all the discussion of using GroupOn to sell subscriptions and tickets that has been occurring of late, (neatly summarized by Drew McManus last week), my brain was receptive to the mention of a similar service which may be better for both the consumer and the business.

I was listening to the radio when I heard an interview with a representative of a company called Tippr that provides a similar service to GroupOn’s. The benefit for businesses is that they have representatives in every city in which they have a presence who can sit down and structure an offer specific to your company and needs rather than the same arrangement everyone else gets. This includes making sure responses don’t exceed your company’s resources and ability to service them. One of the biggest problems businesses have had with Groupon is being overwhelmed by the number of people seeking to redeem deals. Tippr seems to view themselves as a service that provides growth to businesses rather than a discount deal site.

Which is not to say the consumer doesn’t benefit. Tippr offers three deals a day rather than just one. But the real value comes in what Tippr calls an Accelerated Deal. The more people sign on to deal, the bigger the discount. It starts at 50% but can go up to 90%. Presumably, the business can set a cap on how large the discount grows to.

You won’t see the Accelerated Deal anywhere else. The process was patented by a company named Mercata in the 1990s which went belly up according to Gigaom because, “Online social networking didn’t exist back then, customers were much less likely to spend money online…” Tippr bought the patents on the process.

When I first heard the Accelerated Deal described, I thought it was a system that rewarded early adopters. In my post on GroupOn, I had suggested that with the correct timing, one could use that service to reward people who committed early.

When they first started talking about how Tippr worked, it almost sounded like you could pay $10 for $25 worth of merchandise and then as people joined in the next level of discount would have you pay $15 for the discount which might now be at $30. Except that since the discount was the same for everyone, the person who paid $10 now was getting $30 worth of merchandise. So as the discount increased, the late comers were getting a really great deal, but the early adopters who were driving the whole effort really made out well.

For the business, this could really work out well if you structured the curve of the discount well. Sure, you may end up giving $100 of merchandise for $10, but if the cost of the discount went up to $20 after the first 10 people bought, you limit that exposure. The same if you limit the number of $20 deals knowing the discount will top out at $100 merchandise for $60. If you have a couple hundred people buying at the $60 range when the average sale in your store is $15, it might be good planning. Especially if you know from more modest offers that a fair percentage will return to your store to buy at full price and since they have already paid $60 in your store once, they are inclined to spend more than the normal $15 average.

While that isn’t how Tippr actually works, if more companies enter this market niche, you may see companies using this type of model of obscene discounts for the first responders to differentiate themselves from the pack. Hmm, maybe I should download the patent paperwork….

I am not sure how well Tippr might work for arts organizations. It may make sense for subscriptions over single ticket sales. If earned income is 40% of your budget and you have the potential of discounting your tickets anywhere from 50%-75%, it could be a perilous situation. But it can be absolutely worth it if you decide rather than spend a couple thousand dollars on print and radio advertising, you will forgo a couple thousand dollars in ticket revenue knowing every few dollars lost is a guaranteed audience member. Since Tippr has a representative to sit down with you and listen to your concerns so you can develop a sane plan for how much to discount and limit the number offered, you can also be guaranteed not to incur any more expense than you intended.

Free Markets And The Artists Unappreciated In Their Own Country

by:

Joe Patti

I was reading a piece by economist Tyler Cowen on how Milton Friedman’s views apply to the arts. According to Cowen, Friedman essentially felt that free market commerce creates diversity in the arts, in types, method of expression, funding and innovation. “Our most effective arts policy has been tax incentives for donations, which has kept choice and quality control in private hands,” writes Cowen.

Cowen acknowledges that we don’t always like the way this manifests itself.

“In other cases, many people, most of all intellectuals, object when apparently nonmeritorious individuals earn huge salaries. The same objections surface in the cultural realm. Madonna earns hundreds of millions, whereas a first rate opera singer might pull in only $50,000 a year or perhaps cannot earn a living from singing at all. The best response, well understood by Friedman, is the same. A system that permits such “inequities” will in fact generate the greatest number of opportunities for performers of virtually all kinds.”

I am sure I was being stubborn when I decided I wasn’t completely convinced by this assertion, though there were enough examples to support Cowen that kept creeping into my mind. It wasn’t until later in the piece when Cowen cited the example of Monet that I had to reluctantly fall more in agreement with him.

This story of free trade and creativity runs throughout the history of culture. Claude Monet had little success marketing his paintings to the government run Salon in Paris in the late nineteenth century. His style and colors were considered to be too radical and too unpleasant. Monet had greater success selling to wealthy North Americans, who were not bound by prevailing French artistic conventions. His haystack paintings proved particularly popular in this country, which is one reason why they appear so frequently in American art museums.

The Monet example illustrates a broader (but sometimes neglected) benefit of international trade. The common arguments for trade cite the benefits of drawing on producers from other countries. But trade also mobilizes the benefits of the consumers from other countries. Consumers hold embedded knowledge. Their purchases can induce suppliers to elevate quality, help suppliers pursue careers of greater pleasure (for example, art), and help generate the artistic heritage of mankind. The greater the diversity of consumers to draw on, the better markets will perform these tasks.

This past week we premiered an original work about the Hawaiian snow goddess, Poli‘ahu which pretty much illustrates his point. It employed hula, ballet and contemporary dance. The artistic director brought in dancers from Japan, a Yupik Eskimo from Alaska and an exchange student from Mongolia to work alongside local dancers to tell this story. While we hope to tour this throughout the rest of the state and take it to the continental United States, there were already plans forming to take it to Alaska and Japan as the show closed opening night. Colleagues at another performing arts center took a show about Kahekili, the chief who nearly united all the islands under one king to Germany a few years ago.

As Cowen’s talked about how international trade brings benefits to the arts, it struck me that without it, the performance we just had would not have developed as it did and the opportunities that may open up and indeed have opened up for colleagues doing similar works, would not be possible. Some of these developments are owed to technology and the internet which enables people to become aware of these shows and evaluate performance videos. But international trade and interactions make people more comfortable and curious about each other and willing to consume other artistic experiences.

The inspiration for our production of Poli‘ahu originated during a bush flight over the Anaktuvuk Pass when the artistic director we partnered with was invited to bring hula to the Arctic Circle a few years ago. Granted, trips to Alaska from Hawaii are not international and there are some areas where they share a certain kinship, but in many respects they are diametrical opposites.

The dancers from Japan didn’t bring anything overtly Japanese to the performance. The role they played could have been performed by any well trained dancers. But their presence was a product of the international commerce to which Cowen refers. The artistic director of the production had been visiting their dance school in Japan for over 10 years and had worked with these women since they were children. He arranged accommodations for them during the rehearsal period so that they could participate in his production as part of his company.

It has been awhile since I invoked the concept of the Creative Economy so let me do so here. This production probably won’t constitute a large enough segment of the emerging economy to pull us out of the recession, but the dynamics which made the production possible and the activity yet to result from it may play a tiny part in moving things toward such an economy.

Social Network Just For Non-Profits

by:

Joe Patti

Via Non-Profit Law blog, Facebook co-founder Chris Hughes is launching a social network, JUMO, later this year to connect non-profits with supporters. If you watch the video accompanying the article, you will learn that while Hughes has left Facebook, he is still supports its use. Jumo users will be able to easily transfer their Facebook information over when he opens the service.

Hughes’ hope is to provide a way for organizations to develop relationships prior to requesting assistance. “Hughes thinks that the call for support should come only after people and organizations have built that connection with one another. All too often, said Hughes, the donate button on websites is big, flashy, and colorful, and email calls to action are usually in all caps, starting with the word “Urgent!” Hughes hopes that Jumo will move organizations toward a new era where relationships are forged and cultivated before calls to action.”

Earlier the article notes: “To do that, the platform will be broken up into three main components: Find, Follow and Support. First, Jumo will help you find non-profit organizations by learning the types of things that interest you and making suggestions. Second, the site will help you follow those organizations by receiving a stream of updates about the work they’re doing and how that work is affecting real people.”

In the comments section, some wonder if people will really join another social network. I don’t necessarily share that concern. I think people who are interested in causes will welcome a place that aggregates information and lets them connect with those causes. Non profit organizations should differentiate how they use the different technologies. You might encourage people who want information on ticket specials and the hot news about just signed artists to pay attention to your Twitter feed or Facebook account. Whereas you would provide information on outreach efforts and volunteering opportunities on the Jumo account.

Focusing on a few communication channels is about all most arts organizations have the staffing to handle in any case. Developing a separate flavor for each channel and leveraging it to serve the interests of different segments of your audience is probably better than replicating the same content verbatim on each is probably a better use of staff time in any case.

The real benefit to non-profits would be if people started using Jumo in ways not anticipated by the creators, spurring the development of features specific to the needs of non-profits.

Ticketmaster’s New Invisible Pricing Policy

by:

Joe Patti

So I see on Fast Company that a class action suit brought against Ticketmaster has moved forward with everyone who purchased tickets between October 21, 1999 and before May 31, 2010 named as parties to the suit. The suit focuses on the order process and UPS delivery fees notes the Fast Company article:

Plaintiffs assert that Ticketmaster’s Order Processing Fee is deceptive and leads consumers to believe that it represents Ticketmaster’s costs to process their orders, and that the Order Processing Fee is just a profit component for Ticketmaster, unrelated to the costs of processing the orders. Ticketmaster disputes these allegations.

Plaintiffs allege that Ticketmaster’s UPS Delivery option is deceptive because it leads consumers to believe the price they are paying Ticketmaster is a pass-through of the fees that UPS charges to Ticketmaster and that Ticketmaster substantially marks-up the amount it actually pays to UPS. Ticketmaster disputes these allegations.

I had read a piece on the MSNBC website back in September saying that Ticketmaster had created a blog site and were acknowledging that people hated their fees and would offer more transparency about the charges. But that hasn’t been the experience of Herb Weisbaum who wrote the MSNBC piece. He didn’t find out the exact amount of the processing fee until he reached the point of reviewing his order.

And this was after CEO Nathan Hubbard admitted on the Ticketmaster blog, Ticketology (my emphasis),

The problem is that historically we haven’t told you how much you have to pay for a given seat until very late in the buying process. And our data tells us this angers many of you to the point that you abandon your purchase once you see the total cost, and that you don’t come back. The data also says (and this is the important piece) that if we had told you up front what the total cost was, you would have bought the ticket! So by perpetuating this antiquated fee presentation, fans are getting upset, while we and our clients are losing ticket sales.

This practice changes today.

Now with all the changes to programming that probably needed to occur to make good on his promise, perhaps it was too optimistic to expect that would be changed in the first couple days. Or three weeks later when Herb Weisbaum bought his tickets. Or you know, right now 6 weeks later when I tried to buy ticket, clicked on the price details and was told about a $9 convenience fee, but didn’t find out about the processing fee until I was ready to hit submit. True, when it said “The price displayed includes the ticket/item price plus, when applicable, convenience charges, facility charges and additional taxes. Click Price Details for more information.” And that doesn’t mention that there might be charges they may not be telling me about. Silly me for assuming there weren’t unstated charges after reading that there would be more transparency early in the purchasing process. Their new pricing policy is transparent all right, it still remains to be seen.

The other thing that makes me skeptical that Ticketmaster is sincere about changing their ways is that there have only been two entries on the Ticketology blog. The first was in August where the CEO made this promise along with stating Ticketmaster would be offering refunds at select venues. (Which admittedly is a step forward.) The second entry was in September where the CEO talks about how much everyone loves their refund policy.

That’s it.

With all the events for which they sell tickets, all the myriad venues they operate out of and serve, they can’t muster more than 2 entries in 6 weeks? They could have pictures of their employees in and around some of the most famous and attractive venues in the world making you dream of seeing whatever you could just to walk through the doors and sit in those seats.

But all they got is a post about policy changes and another that is sort of self congratulatory about one of those changes. It pretty much screams, “this is a corporate propaganda blog.” Nothing is going to be posted that isn’t vetted by marketing and maybe legal. Ticketmaster protests that they aren’t responsible for the high prices and varied add on charges, but they aren’t doing a very good job of making that case.