The National Center for the Performing Arts in Beijing has been a key venue for live performances since it opened in late December 2007. It is sometimes also called the national theater and the egg. [China Daily]
Television personality Bai Yansong ascended the stage recently at the National Center for the Performing Arts and appealed for lower ticket prices. He didn`t realize at the time that his audience had benefited from such a plan.
Ticket prices for that day`s one-hour program, mostly Mozart, were just 40 yuan ($6.30), or 10 yuan for members who had paid annual fees. That means a visitor could tour this new landmark plus indulge in the pleasures of the performing arts for about half the cost of a regular movie ticket.
From its opening in December 2007 through September, the center hosted 4,000 such events to bring various performing arts to the masses. Some 1.5 million people attended them without breaking their bank account.
But tickets for most live performances in Beijing and other Chinese cities cost considerably more. They defy basic economic theory, which dictates that price is determined by supply and demand. In China`s live show market, other forces are at work.
Many tickets are priced with a string of eights, a lucky number in Chinese superstition - 880, 1,880 and so on. A record was set early this year when a box seat for a Shaanxi opera went for 8,000 yuan.
Granted, few people would pay that kind of money simply to enjoy a theatrical performance. Such a ticket is frequently a gift that can be covered by a corporate or government expense account. Sometimes, especially during year-end holidays, an employer books a night for public relations and employee perks.
"You cannot say these block bookings do not serve the masses," said Wang Wei, director of marketing and sales for NCPA, the national center. "A client, a sponsor or an employee should belong to the ranks of the masses, and some of them may be hooked on the arts from then on."
Wang would not divulge the ratio of institutional buyers to individuals.
Different motivation
According to Lin Nan, an industry analyst, the prevalence of high-priced tickets does not correlate to high demand and low supply. It is the result of government entities investing large sums into projects that "clog up venues and schedules but do not care for financial returns".
Production companies are mostly State-owned and often use the shows for purposes other than making money, such as promoting certain values. Overemphasis on these social values, such as a performance in celebration of Women`s Day, essentially turns part of the industry into a promotional platform with little regard to its economic fundamentals, Lin said.
For a commercial performance, a theater does not intend to lose money. However, the producer with financial backing may not care. Whatever category a performance falls into, the tickets in the high price range are either given away or sold to institutional buyers.
The economic model is skewed, a state of affairs that NCPA is struggling to resolve.
Wang said there is no way the center could recoup its cost in certain projects, for example, flying in the Simon Rattle-led Berlin Philharmonic. Online rumors put per-seat cost at 3,000 yuan, partly due to special transportation and accommodation demands from the artists. Wang said only that the cost was "not that high".
But overall, he said, the center factors cost, audience acceptance and supply-and-demand dynamics into its pricing.
On its website, the Berlin Philharmonic concerts Nov 10 and 11 were listed at 380, 580, 780, 1,080, 1,380 and 1,680 yuan, plus an unspecified VIP rate. However, Wang explained that no matter how you price a performance, people who buy their own tickets will flock to tickets in the medium-to-low price range.
Low-price strategy
Wang said the center prices its tickets slightly below market. "The brass quintet from the Berlin Philharmonic fetched 300 yuan for the highest, which was 100 yuan below what others might have charged. A New Year concert could go upward of 1,800-2,000 yuan elsewhere, but ours went up to only 1,680 yuan," he said.
In each of its first three years, the center presented around 800 commercial performances in its four venues - an opera house, a theater, a concert hall and a multi-functional hall that doubles as a small theater. The average ticket price is 314 yuan, Wang said, putting the annual gross in the 300 million-yuan range.
The center has gradually lowered admission fees by placing more tickets in the medium and low brackets. "We started with 72 percent of overall tickets in the below-500-yuan bracket, and now that ratio has grown to 83 percent. For seats below 300 yuan, which is deemed low, the percentage has increased from 44 to 52," Wang said.
Other theaters have similar strategies, said Zhang Chaohui, operating director of Poly Theater. "Poly gives priority in service to top-rated shows, some of which may not be expected to bring in profits. And it provides student discounts in the range of 80-100 yuan for certain commercial performances, to groom future theater aficionados," he said. "The bottom line is, we won`t let our house be empty."
Poly has a chain of theaters nationwide, which allows it to coordinate touring performances, and competitive rental rates, according to a manager at a performing arts agency who insisted on anonymity.
He said the center`s high rental fees cut deeply into the profit of producers. "If we rented the National Center for the Performing Arts, we`d have to raise our per-ticket price by 500 yuan."
An Ting, an official at a Beijing government agency in charge of culture and recreation, sees NCPA`s functions as somewhat different from "purely commercial houses such as Poly, Beizhan and 21 Century", of which he feels the city should have more. He considers the center more a landmark, and said it may not need to compete on equal footing with other market players.
Financial aid
An, the official, suggested subsidies for both suppliers and consumers in this business. "A monthly income earner of 3,500 yuan would never go for an 800-yuan seat. The government can impose a limit on price by subsidizing the projects."
This kind of subsidy has its critics, but also its success stories. The Beijing People`s Art Theater is a case in point.
Several actors in its ensemble are big-name stars who command salaries in the millions of yuan for screen roles, yet are paid a relative pittance as regular staff members of the theater. Scalpers may charge thousands for a hot show, but the official price falls well within the low hundreds.
The theater also offers student discounts and over the years has developed an extremely loyal following. "We do not compete with commercial houses," said Sun Ning, a publicity manager for the theater. "Reform toward commercialism may not benefit our artistic quality."
Watching the numbers
NCPA keeps a database that tracks all ticket sales and provides a trove of information. The sales trend for its own production of Jane Eyre, for example, is a testament to the power of positive word-of-mouth.
For its first run, in June 2009, 20 percent of tickets went out 50-40 days before it opened; then 20 percent more the next 10 days; and finally 30 percent. For the second run, the following December, 30 percent of tickets were snatched up in the first 10 days of advance sales, reflecting a heightened eagerness among potential theatergoers. By the time the play opened, the house was sold out.
A different June show sold 90 percent for its first run, with two extra shows added at the last minute. But when it returned the next year, in late October, attendance dropped to 60 percent. Marketing director Wang wouldn`t identify the show.
Wang noted that there are seasonal fluctuations, with the months after Chinese New Year and the end of March the slowest. "Some venues would simply close for the time," he said.
"Other theaters do not need such a database system because they do not participate in pricing, but only charge the fee for venue rental," Wang said.
Center as producer
In the first three years, the center had 15 productions of its own, ranging from Peking opera to dance drama to Italian opera. The productions are usually mammoth in scale and crowd-pleasing in style.
This year, the pace has quickened, to six more original productions, including two Rossini operas and a Tosca that was so acclaimed it will be revived within the year.
Some of the center`s detractors accuse it of favoring foreign artists over local ones in its promotion. "Also, it would push its own productions regardless of their artistic merit," said one critic who did not want to reveal his identity. "But an outsider like Meng Jinghui, the avant-garde playwright and director, can only have his most tested and popular play staged inside the giant egg", the center`s nickname.
(The prestige of getting into the national theater, which is the Chinese name for NCPA, also puts outside producers at a disadvantage in bargaining.)
Wang admitted that the center gives preference to repertory pieces. "When selecting Huangmei opera programs, I took two audience favorites, but the production company insisted on presenting a new work as well. That one flopped. You can`t fight the market."
Looking far ahead
Although unable to change the status quo of institutional supply and purchase, the center, in Wang`s words, is a force to be reckoned with in bringing the industry to the lines of market adjustment.
On his part, he disapproves of some competitors who deliberately set artificially low prices for top-notch programs, such as concerts under the baton of world-renowned conductors. "That throws a monkey wrench into the Beijing market."
If only a few seats are priced below cost, it could be seen as an enticement for low-income patrons. However, if a whole show is thus priced, it is not healthy competition.
One of the center`s consistent endeavors is to nurture a new generation of enthusiasts of high art. It hires lecturers for its outreach program that goes into classrooms, corporate cafeterias and community centers. The benefit, which would take a long time to materialize, would go to all houses of performing arts, not just one theater.
In NCPA`s first few months of operation, it experimented with standing tickets. Now, some of the performances offer orchestra seats for students that may turn current cash-shy youngsters into future patrons.
"We do not want prices to spiral out of control," Wang said. "We are working to turn the performing arts market into a virtuous cycle."
