Marketing: Royal Opera House aims at profitable arias: A box-office bid for investors

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A REVOLUTION is taking place at the Royal Opera House in Covent Garden, London. For the first time in its history, the state-subsidised home of the Royal Opera and the Royal Ballet will aim not only to show the best productions but also an annual profit.

Stung by allegations of financial mismanagement, the ROH hopes to demonstrate that it is now in control of its finances, thereby encouraging future investors.

To achieve a profit in the 1994/95 financial year, it has set itself a pounds 19m target at the box office. In 1993/94 it took pounds 16.7m, but it is confident it can raise the extra revenue through a schedule that includes Aida, La Traviata and The Sleeping Beauty. In addition, Placido Domingo and Jose Carreras will perform later this year.

This move into the commercial arena is likely to provoke controversy, because many in the arts believe artistic excellence will have to be compromised to meet the target. They fear that only popular productions will be staged, and new and less well-known operas and ballets ignored.

The Royal Opera House denies standards will be compromised. It believes the only way to reduce its deficit is by generating profits. The deficit fell from pounds 3.6m to pounds 2.8m in 1992/3, and the management hopes to wipe out the remaining pounds 1.4m debt by March 1996. 'We are on target to achieve this,' says Clive Timms, the new director of finance.

The deficit arose from steady cuts in the Arts Council subsidy over the past five years. The recession made it difficult to raise enough private sponsorship to meet the shortfall, and led to a decline in box-office takings. 'We were affected by the recession later than other industries, and it's taking us longer to recover,' says Keith Cooper, the opera house's 37- year-old director of public affairs and marketing.

A dancers' dispute with management in 1989-90 and a musicians' dispute in 1991 added to public opprobrium.

With an annual Arts Council subsidy of pounds 19.5m, the Royal Opera House is required only to break even. But, as the deficit has shown, this has not been possible. 'The public subsidy is very difficult to rationalise when by necessity the opera house has to be market-driven,' Mr Cooper says.

To enter into this new commercial cycle, Jeremy Isaacs, the ROH's general director since 1988, has made several key appointments: Mr Timms, who was formerly finance director at ITN, personnel director, Mike Morris - also from the same post at ITN - and Mr Cooper, who headed the marketing operation at the English National Opera.

Although audiences for ballet increased in 1992-93 by 5 per cent of capacity to 87 per cent, audiences for opera fell by 3 per cent to 85 per cent over the previous financial year. The Royal Opera House is now aiming for 100 per cent capacity for both opera and ballet. However, that figure has to be qualified.

'One figure is the number of bums on seats and the other figure is the amount paid for those seats. With our present level of discounts for the disabled, students and standby tickets, 90 per cent of capacity is what we can achieve at full price without an empty seat in the house,' Mr Cooper says.

He emphatically denies that ticket prices are a barrier. 'It makes me very angry when people quote just our top price of pounds 187 for an opera seat, when in fact our prices range from less than pounds 10 to a small number at pounds 187.'

There are 13 price schedules and 200 prices. To meet the new target, prices will increase by 2 per cent on average. Members of staff test the view by sitting in the seats before deciding prices for each production. 'We have to be rigorous, otherwise we could not defend our pricing to the public,' Mr Cooper says.

He concedes, however, that the charge of elitism was justified when it proved more profitable to play to fewer people paying higher prices. 'We got a lot of flak for our superstar prices that excluded thousands of people, but we now have the balance right between supply and demand.'

The 'superstar' productions subsidise less well-known works, but they are too few to rely on. Well-cast, popular productions are more expensive than less well-known works that are not as well-cast. 'Audiences are attracted to the latter because they still get the Royal Opera House experience for a Cherubin instead of a mainstream Verdi or for a lesser- known ballet.'

In spearheading the opera house's marketing revolution, Mr Cooper is shifting strategies to direct mail, promotions and incentives for box-office staff, who are the sales force. A recent newspaper voucher campaign added 17,000 new names to its database.

The ROH is also studying the feasibility of a 'patron loyalty' ticket scheme, run on the same lines as air miles. If this goes ahead, it will be the first for a theatre in Britain.

The patron loyalty scheme is aimed at cultivating what Mr Cooper calls the Group Two audience, the 'floating voters' who are not overawed by going to the Royal Opera House. Group One are the core audience of 30 to 40 per cent of regular opera goers, usually fiftysomethings.

Group Three are those who never go to the opera or ballet, usually the B and C1 socio-economic group and young people. 'I am struck by the number of young people working in opera and ballet, and yet that is not reflected in the audience profile. People in this group might overcome their reservations if they realised that people their own age present opera and ballet,' Mr Cooper says.

Ballet fans have criticised the Opera House for a bias towards the Royal Opera because it makes more money than the Royal Ballet. The opera does make more money, but Jeremy Isaacs hopes to achieve parity of performance in future, in addition to scheduling a big international ballet tour every year.

The Royal Opera House also hopes to boost its catering department and video catalogue of productions to help generate profits.

But the drive towards profits does not mean that warhorse productions will be rushed on after just two weeks of rehearsal. 'We remain committed to being a centre of excellence with high production values,' Mr Cooper says.

(Photograph omitted)