Sometimes when you join a startup, you are joining an existing company that needs help desperately. The product needs help, the marketing effort could be more strategic and effective, or new business models could be developed.
I found this blog by Ben Rosen [former chairman of Lotus and Compaq—remember them? – and also of my first startup, Ansa Software (Paradox, relational DB—still marketed 20+ years later by Corel—“ Who woulda thunk it?” to quote Ben)] to be a wonderful case study of turning around an organization. Granted, the organization (the Metropolitan Opera) that Ben writes about is BIG compared to most software startups, but I think there are insights that all of us can glean from in this story. Ben was on the board of the Met during this story and head of the marketing committee—applying what he learned about creating very successful, large tech companies to a cultural icon. When he was still a VC, Ben used to teach a class at Columbia business school on entrepreneurship and venture—thus the case study format for his tale.
I really enjoyed this story -- let me know what you think!
Here are some highlights from the story—but do read the whole blog. It’s also filled with photos and before-and-after charts and graphs.
Met Opera sets at Saks Fifth Avenue
The situation analysis
Okay class, pay attention. Here’s today's business problem:
It’s 2006. You’re hired to run the largest performing arts organization in the world, a 125-year-old household name. Every year, you stage over 200 performances per year of a couple of dozen different operas. Your performances are heard by millions of radio listeners around the world. And until the year 2000, your ticket was the hardest to score in New York City.
But in the last six years, everything’s gone awry. Attendance has declined sharply. Costs have risen every year. Philanthropic contributions have flattened out. The endowment is woefully inadequate. Competition for the cultural dollar is soaring. There are signs of organizational complacency. And even though your audience is disappearing, you have no marketing organization in place to try to offset the decline.
What to do? Can anything be done? Is there a solution?
The dire situation outlined above is not hypothetical; it’s real. It’s what faced the Metropolitan Opera just two years ago.
The problem – the virtual perfect storm
Read the blog to see how complex the problem was. Ben says: Then came the millennium, and everything changed, and for the worse -– attendance, philanthropy, competition, subscriptions, and the bottom line. There are a lot of reasons for this collapse. For the Met it was a virtual perfect storm.
Turning the battleship around
To turn the ship around – i.e., fill the house -- three major initiatives were undertaken: (1) improve the product, (2) create a major marketing effort, and (3) add new sources of revenues and audience development.
Ben just cuts through the complexity to boil the solution down to three seemingly easy -- but clear-- goals. Gotta love that!
The product improvement story is terrific. But I’ll skip to a marketing insight that many of us, I am sure, have been asked to ignore in favor of creating demand for unfinished or weak products:
Rule One of marketing is, Great marketing starts with a great product. Rule Two is, See Rule One. As noted above, the overriding effort of management is to make the entire opera experience better than it has ever been. Once that has been achieved, marketing can go to work and help fill the house. But if the product isn’t any good, no amount of marketing can make it succeed. As Bill Bernbach, the founder of legendary advertising agency Doyle Dane Bernbach said, “Good advertising makes a bad product fail faster.”
So what did the Met do? Engaged in some marketing techniques that reached out into the community and built word of mouth -- hmm, that sounds familiar!
- Times Square opening-night live telecasts
- Opera sets displayed in Saks Fifth Avenue windows
- Red carpet opening nights
- Free opening-performance dress rehearsals
- Creation of an art gallery
- Met signs and banners and posters everywhere-many featuring very attractive stars
- Narrow-focus marketing techniques to create demand for specialized operas
- Live high-definition telecasts to theaters around the world. After just two years, more people now watch the Met Opera in movie theaters that in the opera house itself (around 850,000). The PR from this has been huge. Creating a new generation of live opera viewers?
Case Study Conclusion: The Battleship Has Turned
There seems to be enough data now to demonstrate that the Battleship Met has indeed turned around. Just two years ago, every indicator for the Met Opera was pointing down. And now they’re all pointing up -- attendance, subscriptions, sellouts, philanthropy. And if one looks at that ephemeral quality associated with success -- buzz -- the Met now has it again. In fact, the Met has become the hot cultural ticket in town.
Yes, it’s costing more money to effect these changes, but the increases in revenues -- from philanthropy, box office, and telecasts – are likely to offset these costs in the future.
Even though opera is an anachronism, a centuries-old art form replete with some of the creakiest plots imaginable, in 2008 opera – at least the Met Opera-- is where the action is. The Met has begun a new act. Who woulda thunk it?
