Ticket agents are a familiar part of the theatre landscape. Since the 80s, complex box office systems and easier telecommunication has made it possible for theatre box office teams and ticket agents to work together more effectively. The trouble is that since then, not much has changed and the way that agent-venue relationships are managed is lagging behind innovations in other areas of the box office. Fuelled by outdated working processes and a lack of technology, the relationship between venues and ticket agents has reached a stalemate that desperately needs a change in thinking, aided by new technology.
What’s the problem?
Venues fear lower yield
There are two kinds of agent commission: inside commission which is the part negotiated directly between the agent and the venue, while outside commission is ‘added on’ to the ticket price by the agent independent of the venue, usually in the form of booking fees. If the deal is based on inside commissions, venues will end up with smaller total yield for the show.
Venues don’t want to lose loyal audiences to agents
Venues are often unsure about what they’re getting out of the relationship. Venues naturally want to keep the relationship with their audiences and control the transaction so that they have customer data that they can use to market more effectively. In short, theatres are all about audience loyalty and agents can be perceived as a middleman that severs the relationship.
It’s labour intensive
Because of a lack of technology, the process of managing agent allocations usually goes like this: when the agent sells their allocation of tickets, they call the venue to ask for more tickets. If the venue is selling out their own tickets, they call the agent to find out how well the agent is doing with their allocation. Then begins a lengthy process of markbacks and reconciliations by the venue. A large portion of a box office team’s time can be spent managing agent allocations, chasing for updates from agents (and vice versa) and reconciling sales. Not having any visibility over what agents are doing also means that an agent can hold on to their allocation without selling it, meaning venues risk having unsold seats they could have sold directly to customers.
What needs to change?
We think there’s a better way of working together that benefits venues as much as agents. Some of these issues can be ironed out through a better understanding of the benefits that agents can bring venues and getting to know the competitive market agents operate in. Agents are a part of the theatre landscape and it’s unlikely this will stop being the case, so here are 6 things that the arts need to change now.
1. Embracing a wider audience
Agents have broader and more genre-specific audiences at their disposal meaning that they can help venues get a wider range of customers through the venue’s door while generating revenue through higher ticket sales at the same time. From a venue perspective, it’s impossible to tell if a customer would have booked with your venue if there wasn’t an agent involved. While this might dilute the relationship they’ll have with your venue, it does gives your venue a fantastic opportunity: you’ll have a whole new group of people in your venue who might never have visited you otherwise. Make the most of having them in the building by advertising shows of a similar genre and equip staff with tablets so they can survey customers and collect email addresses on the spot. That way you just might be able to make connections with new audiences.
2. Making the most of fulfilment
If you’re fulfilling the tickets on behalf of the agents, this opens up a line of communication. With customers picking up tickets at your box office, could you train your team to ask for their email address in the right way? Could you mention other similar events taking place?
3. Renegotiating deals
Venues often assume that agents won’t take anything less than a high pre-agreed percentage cut of ticket price. In actual fact, if you talk to agents you might be surprised to find they’ll take a lower percentage - or even no discount at all - and make money on an outside commission instead. Why? Well, from their perspective, it looks much better to have tons of stock for sale on their website than no stock at all. They want customers to see them as the go-to destination for buying tickets. Always use this knowledge to your advantage.
4. Using commissions strategically
Set commission levels strategically. That means higher inside commissions for agents on shows that are more difficult to sell, and lower inside commissions on ones that are more popular. Make sure you negotiate a maximum outside commission the agent can put on your product so you can keep control. Be reactive to selling patterns as they happen too. So for example, if an agent hasn’t sold their allocation of tickets for a performance taking place the same day, can you increase the commission to give them incentive for shifting those last minute tickets?
5. Measuring success
A good way of gaining leverage when you’re negotiating deals is to measure the impact of agent deals on your revenue. If the deal didn’t bring in as much revenue for your venue as you would have hoped, or if the agent didn’t shift as many tickets as you wanted them to, you can use this to inform a renegotiation of the terms of the deal.
6. Better technology
We believe (naturally) that technology has a huge role to play, not only for ironing out the difficulties venues currently face when managing agents but also for opening up and seizing opportunities for increased revenue and wider audiences. Here at Spektrix, we’re in the final stages of testing an Agency API that would allow them to ‘dial in’ to a venue’s entire seating plan so that they can sell live from it. We believe this is the future. Here’s why:
- You maximise the potential for yield. If an agent is doing a good job of selling, it makes sense to give them more stock but if they can’t get through to the right person to arrange this and release more seats, you’re losing valuable time and time is money.
- It provides an incentive to sell more. Giving everyone equal access to the same seating plans encourages competition among agents and the venue itself for who can sell the most. The benefit of this ultimately comes back to the venue.
- There’s no manual administration. With live selling, venues have visibility over everything that agents are selling and agents aren’t constantly calling up asking for more stock. There’s no need for mark backs and reconciliations, these are all handled within the box office system as sales happen. The best bit is that this frees up box office staff to work smarter with agents by analysing sale trends so your venue can price tickets and set agent discounts reactively.
Working with ticket agents can make a really positive contribution to a theatre’s audience and its revenue. However, the key to making it work is remembering to think strategically and using technology to maximise the potential of the relationship.