3 min read

Don’t Just Sell Tickets: Find a way to diversify revenue streams

A theatre auditorium, empty, with a thrust stage set ready for a performance

Diversifying your revenue streams is a proven and reliable way of bringing additional income into your organisation, and an option that is open to virtually every arts and cultural organisation. Last year’s announcement that Arts Council England is to receive a 1-2% rise in its budget over the next five years came as a pleasant surprise for many of us working across the arts and cultural sector who were braced for significant cuts. Nevertheless, this extra £10 million in subsidy (welcome as it might be) still amounts to a 5% cut in real terms.

And so as public subsidy remains an unpredictable income source for the arts sector, it’s important that we ask ourselves: what can we do to ensure our industry is strong and resilient in the future?

The Mercury Theatre in Colchester have been leading the way in this area recently, by using their existing box office as an agency for events both in their community and beyond. In the past year, the Mercury have sold tickets to skaters at an ice rink, to families attending a local fireworks display as well as visitors touring country houses across the UK – all alongside their full-time operations as a theatre.

The Mercury receive 30% of their income from ACE and their local councils, with the other 70% of their income coming from earned revenue like ticket sales. Throughout 2015, agency sales have become an increasingly important part of this earned income, amounting for 15% of all ticket sales and contributing upwards of £300,000 in revenue to the theatre. Robin Fenwick, Director of Communications and Audience Services at the Mercury, explained to me:

“This is a rapidly expanding area of business for us as word of mouth gets round local organisations and charities. Clients are predominantly organisations who would not find it cost effective to run their own box office, but who want to offer high standards of customer service. We set commision rates based on the turnover of the organisation we’re working with, so we are usually the most competitive option for an organisation that wants to offer a full service box office across web, phone and counter.”

The value of using your box office as an agency isn’t just in one-off sales, however. The Mercury have found that 12% of their agency customers are also theatre bookers on their database, giving them more information about how to segment and target their communications to these existing customers. For agency customers who are yet to visit the Mercury, ticketing events like a local fireworks display gives the theatre valuable exposure in the community, particularly when it comes to reaching people who might not ordinarily consider going to the theatre.

The Mercury have successfully found a new way of utilising the resource they already have within their box office, diversifying their revenue streams and bringing in a significant amount of new income. Making the most of your diverse revenue streams doesn’t mean kicking off such a large project, however. What about the products you’re already selling alongside your tickets? Are you making the most of your upselling and secondary spend opportunities? Regent’s Park Open Air Theatre have become masters of secondary spend, and their Regent’s Park Burger makes for one very successful case study.

Receiving no ACE subsidy, the Open Air Theatre’s food and beverage offering is a substantial portion of their revenue – thanks in no small part to their website. The online success of the Regent’s Park Burger lies in its position along the purchase path and how this fits into the context of what the customer is buying. Having reached the RPOAT website, the customer explores the events, finding the one(s) they would like to attend and puts their tickets into the basket. It’s only once they’ve made this crucial step – with the customer having made a mental commitment to buying their tickets and now looking forward to the event they’re going to enjoy – that the meal is offered to them. Placed here in the purchase path the food is an attractive optional extra; the icing on the cake of the experience they’re already booking, genuinely adding value to the customer’s experience. If we consider how cinema’s approach secondary spend, with the UK’s second largest cinema chain earning 40% of its revenue through food and drink alone, there’s still much we can do in the arts sector to tap into this opportunity.

Whether it’s through carefully considering your customer journey for secondary spend, or by exploring entirely new revenue streams for your organisation, there are untapped opportunities out there for arts organisations of all sizes when it comes to diversifying your income. We’re great at selling our primary product in the arts, the shows and the exhibitions we know and love, but what about everything else? We need to explore new revenue streams now, or risk missing out on a much-needed cash injection.


More insights and best practice ideas from Spektrix


Ben Park is Global Head of Marketing & Communications at Spektrix

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