Paper or Plastic?

How an arts organization in Seattle uses the psychology of spending to boost its subscriptions

By Eliza Bent

A still image from a promotional video produced by ACT

Challenge
Regular subscription models are shriveling up.

Plan
Revamp subscriptions by asking the public to pay a small fee per month.

What Worked
Selling a product! People love plastic cards that ensure no financial transaction at the theatre.

What Didn't
Establishing the concept of monthly membership.

What's Next
The ACT app on iPhone (or other fancy phones).

Remember the old riddle: Which is lighter, a pound of feathers or a pound of lead? Here's another: Which is cheaper, $25 a month or $300 a year? Both are equal, duh. But don't feathers, and double-digit dollars, seem lighter and less?

The psychology of spending is a strange dynamic to wrap the brain around. When I signed up for Netflix, I was pleased as pie to spend a mere $5 a month—the cheapest plan available. No problem, I thought: One could spend more on the occasional cappuccino—though I certainly don't! It was only when I realized this fee would accrue to $60 a year that I became dismayed. For a moment I felt cheated, and wondered if getting two DVDs a month was really worth the 60 bones a year? Would I use Netflix enough? I'm from New England—thrift makes up a good 75 percent of my blood. Spending $5 a month, not $60 a year, seemed much more reasonable.

Gian-Carlo Scandiuzzi, executive director of Seattle's A Contemporary Theatre, and Harley Rees, ACT's memberships and audience services director, know just how to capitalize on the way humans mathematically rationalize their spending habits. Though ACT offers traditional subscriptions (at $300 a year) it also sells something called the ACTPass. "It works like a gym membership or Netflix," says Scandiuzzi. Theatregoers pay $25 a month to see whatever they like at ACT, depending on seat availability. Pass-holders can come as often as they like—they can see a show more than once if they choose. ACTPass bearers also get discounts on concessions and free ticket exchanges. (They do, however, agree to at least a three-month trial run—just like at the gym.) Friends of ACTPass holders get half off on tickets.

"The flat fee per month was the kernel of inspiration," Scandiuzzi explains during a conference call with Rees. "We wanted to go after a younger constituency, people who want flexibility." According to Rees, the 35-55 set makes up the majority of ACTPass holders, but empty-nesters make up a considerable portion of ACTPass members as well. "This gives them a freedom they didn't have before as traditional subscribers, when they had to carefully plan when they would go to the theatre," says Rees.

Some patrons stick to the conventional subscription model, which is still offered for a sum of $230-300 a year, depending on day and time of plan. "For some people, where they sit is really important," Rees observes, and a guarantee of a seat, which the ACTPass doesn't promise, becomes more essential when planning to see a show with friends.

But many have opted for the flexibility of the ACTPass. "It's liberation!" Scandiuzzi cries. Speaking rapidly, he describes the revolution: "It has changed the way people think about going to plays. We hear, 'This is great because now I come for free.' Of course, when you add it up, the ACTPass costs the same as a year's subscription, but the perception is that they come for free. If you spend $50 on a show, you think, 'Was it worth it?' But that idea is going away because patrons don't have a financial transaction at the theatre. They flash their pass and enjoy the show for what it is. Even if they don't care for the show, they still won't feel as though they've wasted what's in their wallet."

Rees hastens to add, "The tickets still have a value to them. We don't lose money because we have the inventory. We haven't had to turn anyone away yet."

As a result of ACTPass, Scandiuzzi and Rees agree, patrons are more willing to take risks on productions they might not otherwise see. Arnie Ness, a retired doctor whose wife is an ACT trustee, came to see a weekend festival, "14/48," in which 14 plays are created and performed in 48 hours. "Arnie told me, 'It sounded like nonsense to me, but now I'll never miss it!'" Rees recalls.

Moreover, "The ACTPass allows us to be nimble with our programming," Scandiuzzi says. "We don't have to advertise so far in advance, because we know members feel like they belong to the theatre and trust us enough that they'll come and see what we present." From a financial standpoint, the ACTPass relieves cash-flow issues theatres often face—instead of a lump of subscription income that must last a theatre through the year, the ACTPass ensures income on a month-to-month basis. (That is, if people don't deactivate their memberships.)

The ACTPass program started off small and the company has only recently started to advertise it (check out a witty 1950s-esque promotional video produced for ACT's website). The toughest challenge, initially, was selling patrons on the idea of monthly membership. "We realized that we were promoting something kind of conceptual," admits Rees. It was when the ACT team decided to create a small plastic card to flash at the theatre that the initiative became more effective. "We made a product to sell instead of trying to sell a concept," says Scandiuzzi. "There is something magical about pulling the card out!" Another thing that changed is the name. "We were calling it 'ACT membership' at first, which people didn't like." So the program was renamed after its most concrete aspect, the card: ACTPass.

ACTPass has a high retention rate—Rees estimates that out of the current 647 pass-holders fewer than 10 have chosen to deactivate their accounts. Unlike a traditional subscription that gets renewed (or cancelled) annually, an ACTPass (like Netflix) continues indefinitely with an automatic credit card charge. "This is a never-ending relationship," says Scandiuzzi.

An infinite relationship is great for patrons who are well matched to their theatre, but what about potential stalkers? "We do have some 'super-users' who see everything," laughs Rees. "But they are all lovely people." Not surprisingly, these super-fans are often ACT's best ambassadors, writing praise on Facebook pages and Twitter feeds and forming close ties to the theatre that Rees hopes will one day convert them to super-donors.

So what's next? I mention how I recently spotted someone paying for a Starbucks coffee with an iPhone, and Rees and Scandiuzzi light up at the idea. They imagine a future in which the ACTPass is a mobile application that combines a calendar of what's showing in the theatre's four various spaces with proof of ACT membership—turning ACT's plastic card enviro-chic and taking it one step further into the digital age.

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