August 19, 2009

1. The League of Chicago Theatres Decision-making and Online Ticket Purchase for Chicago-area Theaters August 19, 2009 The Searle Funds at The Chicago Community Trust 4147 North Ravenswood Ave. #302 Chicago, Illinois 60613 773.348.9200 main 773.348.9209 fax hello@sloverlinett.com www.sloverlinett.com

2. Project Overview Objectives Methodology

3. Objectives • The League of Chicago Theatres (LOCT) seeks to build the audiences of its member theaters through increasing online ticket purchases • Goals of the research: • How do patrons secure theater information? How would they like to? • How do patrons purchase their tickets? • How do patrons feel about the current online options for information and ticketing? • What potential online capabilities would they like to see?

4. Three phases of audience research • Two focus groups of regular theater-goers in late 2008 • In-theater survey: The self-administered survey was completed by 420 patrons at seven theaters in spring 2009 • A mix of small, medium, large, and commercial theaters • Steppenwolf, Lookingglass, Broadway in Chicago, Writers’ Theatre, TimeLine Theatre, Strawdog Theatre, Lifeline Theatre • Hot Tix online survey: Online survey in spring 2009 with 1,719 online database members

5. Key Findings:Theater Patron Profile League of Chicago Theatres 4.

6. Patron profile: Theater attendance is high among both in-theater and online respondents Overall, more than two-thirds of respondents attend 4 or more performances each year One of the few ways in-theater respondents differ from online database members is in their frequency of attendance More than half of the in-theater patrons attend 7 or more performances per year In the past year, about how many live theater performances have you been to? League of Chicago Theatres 5. *The In-theater survey did not include this response option. In-theater Respondent n= 419 Hot Tix Online Database n= 1,716

7. Patron profile: Respondents report attendance at a mix of sizes and types of theater There is sizable attendance crossover at theaters of different types/sizes 83% report attending two or more categories in the past year 29% of respondents report attending all four categories Hot Tix members were more likely to have attended commercial theater, in part because of the mix of Hot Tix offerings What types of theater have you attended in the past year? League of Chicago Theatres 6. In-theater Respondent n= 381 Hot Tix Online Database n= 1,553

8. Patron profile: Middle-aged women make up the core in-person audience and online database membership Women outnumber men in both samples, slightly more so in the Hot Tix Online Database Age Gender League of Chicago Theatres 7. In-theater Respondent n= 396 Hot Tix Online Database n= 1,574 Theater patron n= 365 Hot Tix Online Database n= 1,566

9. Patron profile: Both theaters and LOCT draw primarily from the city and the north suburbs Implication: Online information that can make the theater experience seem closer (by reducing time spent in travel, finding the venue, and parking) and cheaper (by promoting discounts and special deals) will attract online buyers from the underserved geographies Geographic distribution of respondents League of Chicago Theatres 8. In-theater Respondent n= 354 Hot Tix Online Database n= 1497

10. What do patrons consider when buying tickets? League of Chicago Theatres 2008 9.

11. Purchase considerations: A night out at the theater is special – but risky too When deciding to attend theater, patrons have unique considerations and hopes compared to other events The higher cost of theater and its rich cultural cachet limits attendance and elevates it above casual outings like the movies Patrons are excited and hope to be entertained and enriched, but also know there is a risk that the performance or other parts of the experience will let them down “The difference [between sports and theater] is you can buy season tickets to the Cubs or the Bears, you get the same thing over and over again. You buy season tickets to one of the theaters, you don’t get the same thing every time you go in there. It could be something totally different, something you don’t even like.” In this sense, it is a simple calculus: maximize the opportunities for success and minimize the chance of disappointment Theater lovers have developed a variety of strategies to aid them Online information and ticketing is a major force in their process League of Chicago Theatres 200810.

12. Purchase considerations: When purchasing tickets, patrons seek to gain more control over information and ticketing They do more research on theater performances than on other entertainment events They look for a synopsis and general information on the experience “Unless you're really daring, you need to have some information about what it is you're going to see. Plays are a higher dollar level than movies.” They place more confidence in peer reviews from average theater-goers like themselves than in reviews by critics (particularly in the offline ticket buying group) “I feel like every time I actually would read a review I’ve had the complete opposite feeling about it.” “I go to YouTube for a lot of things. You can just search for Wicked and then you’ll see independent people say – ‘I went to go see this, and here’s what I thought.’ So those kinds of reviews I totally agree with, as opposed to what Joe Wilson from the Charleston Gazette says.” League of Chicago Theatres 200811.

13. Purchase considerations: Respondents were savvy ticket buyers who love to “score” seats when purchasing They value being able to see the action on stage clearly; when purchasing tickets, they place a high premium on seat location “A play is much more visual, you're more concerned about your seat and your view.” (Female, offline ticket buyer) Wanting control over seating choices plays into personal preference for either online or offline ticket buying They have particular preferences that they take care to fulfill “The more you go, the more you know. The more you go to plays, the more you learn. Where’s the best places to sit? What theaters have no legroom? What theaters are comfortable?” Persistence, they have learned, will also pay off “Once I went online to get tickets and it kept giving me bad seats. I just sat there and tried again and again and we finally wound up 10 rows from the stage.” They are thrilled by a special deal – particularly early access or getting special reserved seats League of Chicago Theatres 200812.

14. Key Findings:Information Gathering League of Chicago Theatres 13.

15. Information gathering: A large minority of respondents passively await information rather than seeking it out Implication: The 40-50% of respondents who do not actively search for theater information may need to be taught how and encouraged to seek information in order to move them online. By making it easier to get timely information on the web, theaters could both help patrons and drive additional ticket purchases. Do you use websites or other information sources when looking for information about theater events? League of Chicago Theatres 14. In-theater Respondent n= 345 Hot Tix Online Database n= 1,511

16. Information gathering: Traditional sources still dominate information gathering for theater-goer This in spite of online information availability Many people don’t rely on information directly from “official” sources, but use informal information curators Where did you get information about today’s performance? (asked only of in-theater respondents) League of Chicago Theatres 15. In-theater Respondent n= 388

17. Information gathering: Email is the overwhelming preference for theater information Hot Tix online database members, and to a lesser degree in-theater respondents, look to email for the most convenient source of theater information No other source garners more than 20% of the audience Implication: Despite their using many information sources, email dominates in preference What’s the one best way for a theater to update you about their offerings, discounts, last-minute deals, blocks of seats that become available, and so on? Written in by respondents, not an offered choice League of Chicago Theatres 16. In-theater Respondent n= 378 Hot Tix Online Database n= 1,577

18. Information gathering: Theater size makes a difference in terms of preferred information sources Large and commercial theater-goers show a reliance on passive information sources, especially email Both groups report low utilization of theater and accumulator websites, postal mail, print and visual media Small theater patrons have a distinctive information profile that suggests active information gathering Those who go only to small theaters are more likely to check the theater’s website for information, and to use Hottix.com, Chicagoplays.com, print and visual media, and social networking They are less likely than others to rely on email and postal mail for information Medium size theater-goers are … well … medium in their information habits They mix the other two patterns, ranking high or highest on postal mail, theater websites, Metromix.com, and social networking sites League of Chicago Theatres 17. N’s for small (42) and medium (46) theaters are low, so findings are suggestive only. N’s for large (106), commercial (100), and all four (502) can more validly support generalization.

19. Information gathering: Facebook and YouTube are ripe for co-marketing to younger, more web-savvy theater-goers Facebook and other social networking sites have a high penetration in the populations studied, but almost half the respondents indicated they would never use such web sites And respondents do not see links to social networking sites as leading to increased online purchasing Implication: Facebook and YouTube are the most likely candidates for marketing online ticketing among those using social networking sites, but older individuals cannot easily yet be reached that way Which of the following online sites are you an active user of? (If none, which are you most likely to join?) (respondents could check all that apply) League of Chicago Theatres 18. In-theater Respondent n= 358 Hot Tix Online Database n= 1,536

20. Information gathering: Theater blogs have not yet captured mindshare, but show potential to increase online sales When we look at the characteristics of this niche audience, they… are much more likely to actively seek theater information than let it come to them are younger and disproportionately male go to many more performances, especially at small theaters are more likely to purchase online Implication: Strengthening theater blogs and spreading the word about them could introduce more patrons to online purchasing Do you view entertainment or theater blogs regularly? League of Chicago Theatres 19. In-theater Respondent n= 361 Hot Tix Online Database n= 1,548

21. Key Findings:Buying Habits League of Chicago Theatres 20.

22. Buying habits: More than half of theater-goers buy some tickets online; about one-third buy all tickets that way Online ticket purchasing has penetrated 83% of the Hot Tix online database population but only 53% of the in-theater respondents Implication: In-theater patrons are a priority audience for efforts to increase online purchases, and both individual theaters and LOCT can reach them Implication: The Hot Tix online database, because of its size and ease of LOCT access, offers a large target audience for efforts to increase online purchases Percentage of performances bought online in the past year League of Chicago Theatres 21. In-theater Respondent n= 413 Hot Tix Online Database n= 1,673

23. Buying habits: Even among Hot Tix database respondents, online-only purchasers are a minority Implication: In-person purchase has been a gateway to online purchase, but 42% of subscribers have not yet traversed the gate Implication: The online database is fertile territory for promoting online ticketing, both through Hot Tix itself and full price online sources How have you purchased tickets from Hot Tix in the past? (not asked of theater patrons) The Responses Only in Person 42% Only Online 21% Both 37% Never Used 17% of total The Overlap League of Chicago Theatres 22. Hot Tix Online Database n= 1,691

24. Buying habits: When shopping for tickets online, patrons prefer to start with the venue’s website They have a variety of online options: theater websites, Ticketmaster, discount and half-price sites and accumulators, and ticket resellers Online ticket buyers prefer to purchase from the theater’s website – if possible They are eager to avoid Ticketmaster fees, seating limitations, and hassle The venue website has unique content about the performances that ticket buyers value Patronizing the theater website is also a way to show support for the venue; Ticketmaster is perceived as corporate and removed from the theater itself “If you buy from the venue, it feels like it’s about their theater. It’s not as commercialized as Ticketmaster.” (Female, online ticket buyer) Theater websites may send purchasers to Ticketmaster to conduct the ticket purchase transaction; this may be recognized as necessary, but only grudgingly League of Chicago Theatres 200823.

25. Buying habits: Some use resale sites, especially for hard-to-find tickets Some of the most satisfying ticket buying experiences come from getting tickets for a sold-out show Respondents mentioned TicketsNow, StubHub, and Craigslist “My best experience was using TicketsNow. It’s sold-out performances and people who want to sell their tickets back. I got tickets to see Robin Williams through TicketsNow and I was thrilled to get in.” (Female, online ticket buyer) However, they did caution that users need to do their homework and see if they are getting a fair deal or not “Some [sellers] get greedy and put a lot of extra money on, but some don’t and sell them for maybe a few dollars more.” (Female, online ticket buyer) “If you know your prices, you can get a decent ticket on StubHub. Sometimes you know the prices are inflated so we didn’t buy them.” (Female, online ticket buyer) Here the quality of the ticket dwarfs considerations about its cost They are willing to pay premium prices for special tickets And saving half price on ticket prices can be of marginal advantage if “good seats” are lost and the theater tickets are only 25% of the cost of a “special” evening including parking and dinner League of Chicago Theatres 200824.

26. Buying habits: Hot Tix enjoys a favorable customer evaluation Praised were price, convenience, friendly staff, ease of use, and online purchase capability Criticized were Ticketmaster “highway robbery,” the closing of suburban Hot Tix locations, and inventory limitations Implication: Hot Tix provides a nicely performing platform on which to build the online consumer base; by carefully addressing the criticisms the brand would become even stronger Overall, how would you rate your experience buying discount tickets at Hot Tix? (not asked of theater patrons) Scale of 1 “Poor” to 5 “Excellent,” excluding 13% Selecting “N/A” League of Chicago Theatres 25. Hot Tix Online Database n= 1,619

27. Buying habits: More than half of patrons have at least some misgivings about online purchase A service like online ticketing, easy to opt out of, cannot be satisfied with anything less than the highest ratings; a 4 or below indicates a problem Later slides will explore the nature of respondent misgivings, which are dominated by strong feelings about Ticketmaster Implication: The more potential purchasers can be provided with an online experience that mirrors the best of the box office experience and offsets Ticketmaster’s weaknesses, the greater the willingness to use this resource How comfortable are you with purchasing theater tickets online? Scale of 1 “Not at all comfortable” to 5 “Completely Comfortable” League of Chicago Theatres 26. In-theater Respondent n= 396 Hot Tix Online Database n= 1,677

28. Buying habits: Ticketmaster: can’t live with it, can’t live without it Ticketmaster – comprehensive and nationwide – offers unique services, especially for remote purchasers “Ticketmaster is good throughout the whole country and it’s something that everybody knows. If you’re in California you’d go to Ticketmaster and search San Jose and boom-boom-boom, here it is. You can't do that for venue [websites].” For the most part, though,online ticket buyers bemoaned Ticketmaster’s negatives Services charges are seen as predatory Seat selection is hamstrung by the much maligned “best available” mandatory assignment process and the short “hold” on tickets offered “You can search again, but you’re still not going to be able to pick your exact seat. You have to play the roulette game until you get what you want.” Online buyersoften feel they have no options for ticket purchase and will end up being directed to Ticketmaster in the end anyway Ticketmaster’s dominance in the ticket selling market made one respondent call it a “monopoly” (Male, online ticket buyer) “It’s frustrating. It doesn’t feel like there’s a choice [other than Ticketmaster] and in this day and age, there should be.” League of Chicago Theatres 200827.

29. Key Findings:Motivators & Detractors to Buying Online

30. Motivators of buying online: Stay-at-home purchase and 24/7 availability are online’s primary selling points Top benefits of buying tickets online (respondents could check all that apply) • Convenience leads the list of key motivators to online purchase, with access to special information a distant second • Only a few may know about accessing desirable seats online through persistence and last-minute shopping (this “inside” information created a buzz in the focus groups) • Implication: Publicizing the “hidden” advantages of online ticketing can increase its appeal among existing online users, but it will be important to communicate the top two benefits to recruit non-online buyers In-theater Respondent n= 372 Hot Tix Online Database n= 1,641

31. Barriers to buying online: Service fees impair the online experience for many What are the main disadvantages of buying tickets online? (respondents could check all that apply) • 4 out of 5 respondents are dissatisfied with service fees, far outpacing all other complaints about online ticketing • Implication: Ways to soften the effects of fees, though difficult to implement, would greatly increase the satisfaction with online purchasing • As with the advantages of online purchase, the pattern of opinion is similar for in-theater respondents and Hot Tix online database members In-theater Respondent n= 382 Hot Tix Online Database n= 1,649

32. Barriers to buying online: Comparing ways to purchase, the box office offers “that extra personal white glove touch” Offline and experienced online buyers agree that interacting with the box office staff gives the purchase process a high quality human touch Patrons find the box office staff friendly and willing to go the extra mile to be helpful; this unusual level of customer service removes much of the risk of the theater-going experience Box office staff are more responsive to patron needs than the online ticketing experience, especially with regard to seat selection Theater-goers are very particular about where they sit; the ability to have a conversation on seating is a valuable benefit of offline ticketing Theater patrons give high grades to box office staff for their trustworthy, insider advice Participants complained about their inability to choose seats online because of Ticketmaster’s ill-named “best available” seating allocation By calling or going to the box office, patrons also get other insider access regarding seating and casting Offline ticket purchase also avoids services fees typical of online transactions League of Chicago Theatres 200831.

33. Desired online features: Discount offers and special deals are online’s strongest lure To what degree would each of these potential online features make it more likely you would buy tickets online? Percentage checking the top box “Very much” • The potential for online resources to give information not available anywhere else – real-time updates on deals and discounts, a view of the stage from possible seats, play details, and geographic information – generates the highest reported increase in likelihood to buy online Chart 1 of 2 In-theater Respondent n= 376 Hot Tix Online Database n= 1,591

34. Desired online features: Social networking and Tweets are not seen as gateways to increased online purchasing To what degree would each of these potential online features make it more likely you would buy tickets online? Percentage checking the top box “Very much” • Lower-rated features appeal to niche audiences: critic and peer reviews, neighborhood attractions, a registration feature, and details about the actors • Facebook, MySpace, and other social networking sites are not likely to increase this population’s online ticket buying in the near term Chart 2 of 2 In-theater Respondent n= 376 Hot Tix Online Database n= 1,591

35. Desired online features: Patrons would also love one-stop shopping from an “aggregator” theater website Theater-goers want a central place where they can plan their entire evening out – exploring plays, learning about the theater, “scoring” good seats, finding parking, choosing a restaurant Attending the theater is not an isolated event; patrons make it a special occasion that is often combined with dinner, drinks, etc. Planning the experience on just one website, rather than researching a dizzying array of special-purpose websites, is the consumer “sweet spot” An interactive, searchable map of all Chicago-area theaters, both large and small, was suggested as a best practice for organizing such a wealth of information The map could update based on search criteria: type of show, cost of ticket, date of show, etc. and be searchable for neighborhood amenities Communications that personalized recommendations, similar to those used by Amazon.com and Netflix.com, would also be an appealing component League of Chicago Theatres 200834.

36. Conclusions and Recommendations

37. Conclusions and Recommendations: Information centers around one basic method: email Theater-goers strongly prefer email as their information source Continue to evaluate and improve the Hot Tix emailing effort, which receives very high reviews already Work together with theaters to enhance and dovetail with their email efforts However, a more intense focus by theaters on electronic mail could lead to a counterproductive glut of email communication that would clog the inboxes of theater-goers A consolidated must-read one-stop shop that stops right in the emailbox of theater-goers is very appealing The 40-50% of respondents who do not actively search for theater information may need to be taught and encouraged to seek information in order to move them online Use video, other media, and live demonstrations to describe, model, and teach “savvy” theater information seeking If non-online purchasers can be convinced to buy online just once, they will probably become regular users of online ticketing thereafter Offer special email discounts for first time online buyers League of Chicago Theatres 36.

38. Conclusions and Recommendations: Other online activities may increase in influence over time Strengthening theater blogs and spreading the word about them could bring more people into the online ticket marketplace Team with the best of the bloggers, offering information resources in return for a LOCT and theater online ticketing placement on their blogs Facebook and YouTube are the most likely candidates for marketing online ticketing among those using social networking sites, but market acceptability for the use of these methods to sell tickets is currently low Continue to plan for, create, and distribute social networking content to be well positioned for the future League of Chicago Theatres 37.

39. Conclusions and Recommendations: Online ticketing offers many advantages already and has potential for growth Convenience is the dominant advantage of online ticket buying, which could be communicated more clearly Aggressively market the ability to purchase tickets 24/7 from home, the degree to which a visit to the theater’s website can simulate a visit to the box office itself, and the convenience of printing tickets at home (where available) Feature the ease of online ticket purchase and credit card security over the web Publicizing the “hidden” advantages of online ticketing will increase its appeal to experienced online purchasers Market how to be a “savvy” online ticket purchaser, such as by scoring last-minute prime seats released by the theater Accelerate the development and roll-out of top enhancements: increased notification of discounts, view of the stage from potential seats, and a search function Resist shifting too many resources to social networking to lure online buyers; your audience is not yet ready Work with small theaters to help them meet the distinctive information needs of their more theater-dedicated audiences Retool LOCT’s website into a truly consumer-driven site that offers value by helping patrons find performances and get great seats League of Chicago Theatres 38.

40. Conclusions and Recommendations: Ticketmaster is a considerable source of dissatisfaction with online ticketing The theater community’s reluctant partnership with Ticketmaster carries risk Especially as the partner deals with financial losses and updates its dated software (or fails to do so) Patrons are frustrated with its “predatory” fees, its “best available seating,” and its confusing user interface; some purchasers do not distinguish between Ticketmaster and Hot Tix or theater ticketing functions However, theaters could work to offset this negative impact Sample strategies to reduce the perceived burden of Ticketmaster fees Offer a full or partial rebate of the Ticketmaster fee, or a discount on future tickets, for those buying online, analogous to banks that rebate ATM fees Fold part of the Ticketmaster fee into the cost of the theater ticket so patrons will not be asked to pay $7.50 in fees for a $12.50 “half-price” ticket Offer discounts for in-theater products that carry their own high margins – such as snacks and beverages Meanwhile, the theater community should plan for the day when it can negotiate a better online ticketing environment for its patrons League of Chicago Theatres 39.

41. Q & A Discussion time