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Monday, 19 July 2010

When Less Means More (Part I)

How the Art Museum
Got its Business Plan Wrong


One of Two Parts
By Richard Carreño
Junto Senior Staff Writer Bio
Increase admission prices. Increase revenue. Wrong.

That was, unfortunately, the financial equation that the Philadelphia Museum of Art employed a year ago when it boosted its gate rate by $2 across the spectrum of its general admission prices. The result, an adult charge of $16, up from $14.

The Art Museum's board, faced at the time with brute force of the recession, attempted to ramp up revenue on the cheap -- at the turnstile. Bad move. Sometimes $14 plus $2 does not equal more profit.

Or an improved public image. The museum is already burdened  -- and, to be sure, unfairly -- with a reputation as a place for the the haves and the have-mores. Price Increases just underscore that rep, however undeserved.

Admission to the PMA's world-cass collection, even at $16, is worth every penny. That is, worth a visit at any reasonable price -- once!

Pricing gets dicey when a non-tourist visitor wants to show up frequently. That puts a pinch in the purse, and the museum, like its brethren institutions, knows it. That's where Plan B kicks in: The unstated policy of promoting annual memberships. (Now at $65 per annum).

Museums like to lock in members. Members represent another revenue fund-raising tier that can solicited in a variety of creative -- and nettlesome -- ways. Moreover, development personnel love the numbers game, presenting the breath of rank-and-file membership to heavy-hitter donors as proof of community support. Foundations love proof of community support.

(Disclosure: As a reporter, I receive free admission to the PMA press events. Nonetheless, I'm also a museum member).

What the PMA doesn't get is that its current fund-raising model is so 20th century. Not 19th century. (In the 1800's, the 'gate' didn't matter). Today, its superannuated model isn't even close to the fund-raising realities of the 21st century. Especially, at a time when the economy is still staggering by recession and continued middle-class unemployment.

What the museum has adopted -- and, this, to its peril -- is the Museum of Modern Art model of revenue enhancement. In other words, Broadway-sized prices. (MOMA's rack rate is 20 bucks).

That might work in the Big Apple. home to Great White Way. Whether it will fly in the Quaker City, home to the Philly cheese steak, is quite another matter.

One, the museum's new pricing policy presumes that admission rates (812,479 in 2009) will increase, or, at the very least, remain flat. Big assumption. Even bigger presumption. Given the economy and the public's cut-backs in discretionary spending, down-turn is more like it.

Two, Philadelphia, unlike New York, doesn't have a natural, almost limitless flow of tourists seeking cultural nourishment -- and willing to pay Broadway prices in this strictly off-Broadway town. (Tourists here fancy the family-oriented kiddy stuff, like the Independence Hall and the Ducks combo tour).

In other words, the PMA is killing the golden sucker -- just at a time when it needs that visitor the most.

the PMA should explore the 21st-century model of museum financing, adopted most recently and most successfully in Britain. That is a free gate. Followed by price gouging for 'block-buster' shows and in the sales of museum-related gift items. (The PMA is pretty much done the later already).

How is this free pricing policy actually possible? Because it's not really 'free;' it's subsidized. By government and foundation grants. Not sham subsidies like you see/read in the advertising for the block-busters. This money goes into the general fund; never to directly reduce admission.

The PMA and its trade group should also get serious with city and state administrations about real funding for the museum. (The appointment of Constance H. Williams as board chairman, a connected, former state senator, is certainly a recognition of this imperative).

Millions can be given away to our professional sporting franchises. How about some loose change for cultural institutions, which studies show are as popular, or even more so popular than a Sixers game? Unfortunately, museum directors don't seem to know how play hardball with City Hall and Harrisburg hacks.
  
There's another important revenue stream in the 'free admission' model -- visitors. That's right visitors -- and their discretionary spending once they've been committed to a 'free' visit. When I visited The National Gallery in London not long ago, my admission charge was nil. My gift shop bill? About $150. Cafe? About $20. Who won?

Why are museums free in Washington? See above.

The 'free' model has also been already adopted by some private museums. The Getty in Los Angeles doesn't charge. But look out for those stiff parking/tram fees! The Walters in Baltimore, in a Philadelphia-like urban environment, also gets away without charging.

Museums in France are free to students, teachers, and journalists. That's a good start.

Even the Metropolitan Museum of Art in New York is 'free.' I know, I know. Don't tell me. You've always paid at the Met. That's because you haven't read the fine print. Met admission prices are donations. Pay as you wish. And trust me. You still get a smile from the kid selling the ticket.

There's another reason that the PMA should be free, or adopt the free-will offering model of the Met. A legal one. More on that in Part Two.


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