Earning Wages Just to Put Them in a Bagful of Holes
Tuesday 29 December 2009
There have been fires in the valleys and gorges of the Lachlan Fold just to the north of my house, and for days RFS helicopters and crop-dusters have been flying overhead, keeping an eye on things, occasionally water-bombing. The forest is black cypress which burns fast, with a fragrance as rich as furniture in a well-polished room. My house is built out of the same timber. We are quite safe here, even if the wind turns. There is too much open ground between us and the nearest potential risk, all of it stripped of fuel except for a thin wheat stubble, and split neatly in half by a 500 megalitre dam.
The aircraft buzz with a slightly worried character, as nannyish as our Prime Minister. We are expecting rain for three or four days starting anytime and there has been light rain for the past few days, but the wind has no manners to it: it crashes into everything around it like a three-year old on a trike. But there is nothing to fear.
I am not frightened of much in any case. Occasionally I dream, as we all do, of finding myself about to step onto a stage for a show I haven’t rehearsed, but in waking life I do not feel stage-fright. I do, however, suffer from budget-fright. I know how to spend money. I know how to get money. I even know how to get the right amount of money to spend. It’s working out how much I can afford not to earn that puts a sweat on the brow. When it comes to Cash-flow Projections I would feel more comfortable walking on milk with a thirsty lion on each hand. In fact, the world divides into those that get Cash-flow Projections and those that don’t. Those that do survive in business, those that don’t usually retreat into the arts. Some few are unaware of any divide: they hide amongst the cobwebs in dark corners from where they rule the world. I am not one of them.
The first time I grasped how Cash-flow Projections work was in a room of small business hopefuls at the end of a long day of escalating anger because up to that point, none of it had made sense. The trick is actually very simple: Cash-flow Projection is a realistic estimate of what you might make each time you set out to sell something. If you are selling ultra-lite aircraft to farmers, you might realistically expect to sell one at every field-day you attend - to use the example that finally made sense to me - and so your Cash-flow Projection equals the cost of the machine times the number of field days you can reasonably attend. If you are being absolutely realistic, then this figure will give you the floor, so to speak, of the business. If the costs of the business are higher than the floor, then the business is not viable. If the costs sit on, or are only a little higher than the floor, then the business may become viable over a period of three to five years. If the costs are lower than the floor, then the business will be in profit within the first year. The point of Cash-flow Projections is to take the gamble out of the investment - or to take out as much as is possible.
When a new business fails, it is usually because no matter how realistic the projections, they were not met in real life. The sales were not made.
Financing a show is not quite the same as this model. Producers normally use a break-even represented as a percentage of the total possible earnings (usually artificially lowered to allow for contingencies, complementary tickets above the normal quota, and reduced-price deals as part of a mid-run promotional package). In these days of 99% break-evens, mainstream theatre has become a monster quite unlike the popular theatre of only three or four decades ago. Worse, the venue managements expect that high break-evens give them the right to massively increase their charge per seat, which obliterates smaller and independent theatres if ever they should hire them.
Cash-flow Projections and Break-evens meet when a producer sets out to pre-sell a show. The more proactive the marketing, the more realistically pre-sales can be counted in advance. A pre-sale that exceeds Break-even puts the show into profit before first rehearsal, and is a comfort to all the investors, the company, the writer, director and producer. If it was this simple, we would all be in dusty corners, running the world ourselves, but marketing is like black magic. It is highly arcane, hardly ever works, and when it does work, no one understands why.
The most effective solution is to spend millions turning your show into a must-attend high-fashion event. Robert Mapplethorpe was a master at this, and a study of his early exhibitions is invaluable, but the world no longer falls for fashion so easily. Look at the number of blockbuster movies that, when it comes down to it, aren’t. One strategy, however, that is effective more often than not, and that need not be expensive, is to throw a very wide net, and then to build in filters to cull out the wasted catch. The magical figure is 5%. Out of all the people you can reach, 95% could not care less. You cannot tell in advance who those 5% are, but you can tell once you have caught them. All you need to do is get rid of the 95% that are no use to you - which will not be hard, because they will have forgotten you almost as soon as they heard of you.
This is the domain of marketing: a blend of advertising, promotion, public relations, salesmanship and schmoozing. Good marketers know how to make the nets and how to construct the filters - it is a natural thing to them, like breathing or the picking of pockets. Those of us without the natural gift must resort to trial and error. We work the press, we get the name of our show in every possible environment, we believe that there is no such thing as bad publicity, we talk to everyone, we build lead sheets out of every conceivable encounter, we give interviews, buy drinks, attend parties and offer free tickets to strangers. We will try anything. We are always dominated by numbers.
The 5% figure keeps recurring. 5% of the original 5% might be vaguely interested in your show. Another 95% needs to be filtered out. 5% of the remainder might go to your show; another 95% must be filtered out. 5% of the rest are worth approaching to sell tickets. From then on, it is up to you how well you can sell - but expect more not to buy than otherwise.
Niche Theatre is itself a filter. Unfortunately, for Niche to survive, its surrounding population must be something in the order of 24 million. Allowing for loyalty and repeat visits this number could be reduced, but not by so much that it makes Niche a comfortable place in Australia. These days, Niche survives in big cities big catchments, if it survives at all.
Niche can operate on the principle of Poor Theatre, and can develop its own following, but there appears to be a growth-ceiling that reflects the size of the overall population. In this case, the pool may not need to be so high as 24 million - it may only need to be 15 million - but it is high nonetheless. Niche that is prepared to work on a non-profit basis may do better, but audiences usually value things at the price they pay for them. Good theatre received for nothing is valued as negligible, and rotten theatre that costs $350 a ticket is valued very considerably indeed. (In fact, overpricing is an established, if possibly unethical, marketing ploy.)
There is, just remotely, a chance that the Internet will allow Niche to survive without depending upon a city. How the net must be cast, and what the filters must be to build a meaningful clientele is still a mystery. The Internet is yet a desert in which cities are built upon faith. Internet seminars flourish, especially when run by Churches on a non-profit basis. Internet journals are growing in credibility - so much so that a new breed of fringe eJournal is beginning to overwhelm the normal market. Online concerts are becoming normal, and short video is a standard so common as to be beyond comment. Theatre, however, has not found an electronic home so easily.
These are the issues that I have been facing this past week - especially now that I have figures on my table. Those of us that have been in the business a long time know that theatre was ever the earning of money to put it in a bag full of holes. I still get budget-fright. It never goes away.
While writing this, the rains have come and have brought more water in one day that we have had in months. The soil, which is like a rock when dry, has become as delicate as a pudding and all the weeds are flourishing. The worst weeds flourish the most vigorously, and within a few days the path from the car to the back door will be a thicket of thorns, double-gees, khaki-weed and thistles. While they are tender and new they can be cut out at the roots, but left alone they will become indestructible. Then, the only alternative will be a flame-thrower - and even to think the thing is enough to set the water-bombers ashiver. The skies are peaceful now. Let them remain that way.
Noël Christian
homestead:Theatre of Words
http://www.facebook.com/pages/homestead-Theatre-of-Words/195922452014?ref=ts
http://www.myspace.com/homesteadtheatre
http://blogs.myspace.com/index.cfm?fuseaction=blog.ListAll&friendID=505844404
The aircraft buzz with a slightly worried character, as nannyish as our Prime Minister. We are expecting rain for three or four days starting anytime and there has been light rain for the past few days, but the wind has no manners to it: it crashes into everything around it like a three-year old on a trike. But there is nothing to fear.
I am not frightened of much in any case. Occasionally I dream, as we all do, of finding myself about to step onto a stage for a show I haven’t rehearsed, but in waking life I do not feel stage-fright. I do, however, suffer from budget-fright. I know how to spend money. I know how to get money. I even know how to get the right amount of money to spend. It’s working out how much I can afford not to earn that puts a sweat on the brow. When it comes to Cash-flow Projections I would feel more comfortable walking on milk with a thirsty lion on each hand. In fact, the world divides into those that get Cash-flow Projections and those that don’t. Those that do survive in business, those that don’t usually retreat into the arts. Some few are unaware of any divide: they hide amongst the cobwebs in dark corners from where they rule the world. I am not one of them.
The first time I grasped how Cash-flow Projections work was in a room of small business hopefuls at the end of a long day of escalating anger because up to that point, none of it had made sense. The trick is actually very simple: Cash-flow Projection is a realistic estimate of what you might make each time you set out to sell something. If you are selling ultra-lite aircraft to farmers, you might realistically expect to sell one at every field-day you attend - to use the example that finally made sense to me - and so your Cash-flow Projection equals the cost of the machine times the number of field days you can reasonably attend. If you are being absolutely realistic, then this figure will give you the floor, so to speak, of the business. If the costs of the business are higher than the floor, then the business is not viable. If the costs sit on, or are only a little higher than the floor, then the business may become viable over a period of three to five years. If the costs are lower than the floor, then the business will be in profit within the first year. The point of Cash-flow Projections is to take the gamble out of the investment - or to take out as much as is possible.
When a new business fails, it is usually because no matter how realistic the projections, they were not met in real life. The sales were not made.
Financing a show is not quite the same as this model. Producers normally use a break-even represented as a percentage of the total possible earnings (usually artificially lowered to allow for contingencies, complementary tickets above the normal quota, and reduced-price deals as part of a mid-run promotional package). In these days of 99% break-evens, mainstream theatre has become a monster quite unlike the popular theatre of only three or four decades ago. Worse, the venue managements expect that high break-evens give them the right to massively increase their charge per seat, which obliterates smaller and independent theatres if ever they should hire them.
Cash-flow Projections and Break-evens meet when a producer sets out to pre-sell a show. The more proactive the marketing, the more realistically pre-sales can be counted in advance. A pre-sale that exceeds Break-even puts the show into profit before first rehearsal, and is a comfort to all the investors, the company, the writer, director and producer. If it was this simple, we would all be in dusty corners, running the world ourselves, but marketing is like black magic. It is highly arcane, hardly ever works, and when it does work, no one understands why.
The most effective solution is to spend millions turning your show into a must-attend high-fashion event. Robert Mapplethorpe was a master at this, and a study of his early exhibitions is invaluable, but the world no longer falls for fashion so easily. Look at the number of blockbuster movies that, when it comes down to it, aren’t. One strategy, however, that is effective more often than not, and that need not be expensive, is to throw a very wide net, and then to build in filters to cull out the wasted catch. The magical figure is 5%. Out of all the people you can reach, 95% could not care less. You cannot tell in advance who those 5% are, but you can tell once you have caught them. All you need to do is get rid of the 95% that are no use to you - which will not be hard, because they will have forgotten you almost as soon as they heard of you.
This is the domain of marketing: a blend of advertising, promotion, public relations, salesmanship and schmoozing. Good marketers know how to make the nets and how to construct the filters - it is a natural thing to them, like breathing or the picking of pockets. Those of us without the natural gift must resort to trial and error. We work the press, we get the name of our show in every possible environment, we believe that there is no such thing as bad publicity, we talk to everyone, we build lead sheets out of every conceivable encounter, we give interviews, buy drinks, attend parties and offer free tickets to strangers. We will try anything. We are always dominated by numbers.
The 5% figure keeps recurring. 5% of the original 5% might be vaguely interested in your show. Another 95% needs to be filtered out. 5% of the remainder might go to your show; another 95% must be filtered out. 5% of the rest are worth approaching to sell tickets. From then on, it is up to you how well you can sell - but expect more not to buy than otherwise.
Niche Theatre is itself a filter. Unfortunately, for Niche to survive, its surrounding population must be something in the order of 24 million. Allowing for loyalty and repeat visits this number could be reduced, but not by so much that it makes Niche a comfortable place in Australia. These days, Niche survives in big cities big catchments, if it survives at all.
Niche can operate on the principle of Poor Theatre, and can develop its own following, but there appears to be a growth-ceiling that reflects the size of the overall population. In this case, the pool may not need to be so high as 24 million - it may only need to be 15 million - but it is high nonetheless. Niche that is prepared to work on a non-profit basis may do better, but audiences usually value things at the price they pay for them. Good theatre received for nothing is valued as negligible, and rotten theatre that costs $350 a ticket is valued very considerably indeed. (In fact, overpricing is an established, if possibly unethical, marketing ploy.)
There is, just remotely, a chance that the Internet will allow Niche to survive without depending upon a city. How the net must be cast, and what the filters must be to build a meaningful clientele is still a mystery. The Internet is yet a desert in which cities are built upon faith. Internet seminars flourish, especially when run by Churches on a non-profit basis. Internet journals are growing in credibility - so much so that a new breed of fringe eJournal is beginning to overwhelm the normal market. Online concerts are becoming normal, and short video is a standard so common as to be beyond comment. Theatre, however, has not found an electronic home so easily.
These are the issues that I have been facing this past week - especially now that I have figures on my table. Those of us that have been in the business a long time know that theatre was ever the earning of money to put it in a bag full of holes. I still get budget-fright. It never goes away.
While writing this, the rains have come and have brought more water in one day that we have had in months. The soil, which is like a rock when dry, has become as delicate as a pudding and all the weeds are flourishing. The worst weeds flourish the most vigorously, and within a few days the path from the car to the back door will be a thicket of thorns, double-gees, khaki-weed and thistles. While they are tender and new they can be cut out at the roots, but left alone they will become indestructible. Then, the only alternative will be a flame-thrower - and even to think the thing is enough to set the water-bombers ashiver. The skies are peaceful now. Let them remain that way.
Noël Christian
homestead:Theatre of Words
http://www.facebook.com/pages/homestead-Theatre-of-Words/195922452014?ref=ts
http://www.myspace.com/homesteadtheatre
http://blogs.myspace.com/index.cfm?fuseaction=blog.ListAll&friendID=505844404
More by Noel Christian
- A Wallaby, a Dingo and a Wild Pig All Walked On a Stage11 Jan 2010
- Apples Under the Earth5 Jan 2010
- All There in My Mouth Somewhere25 Dec 2009