08/29/2017

AKA INSIGHTS

A couple of weeks ago, I received the gift of a branded fidget spinner from Broadway.com, one of our ticketing partners (where I also happened to work for eight years). It’s a great tool for me to annoy colleagues during internal meetings. And it’s the reason I clicked a link to read this article in The New York Times about fidget spinners as they relate to disintermediation in the Internet Age.

Say what?

Disintermediation is the economics term for cutting out sales reps and “middlemen” to sell directly to consumers. It’s the principle behind how Amazon changed the business of selling books, or how Uber has rendered car dispatchers obsolete.

The Times article tells the story of how sales reps for Ty mined the expertise of toy store owners to make subtle changes to Beanie Babies in the 1990s that turned them from a fad into a perennial best-seller. That’s in contrast to the flash-in-the-pan popularity of fidget spinners, which toy stores purchase directly from manufacturers in China. The article posits that manufacturing millions of Beanie Babies or fidget spinners is the easy part. The work of the middlemen—who handle marketing, distribution strategies and creating scarcity—is the hard part. That’s the part that gets buyers interested…and keeps them interested.

But what does this have to do with Broadway?

Disintermediation has also affected the travel industry. In markets where credit cards aren’t widely used or trusted, tourists still talk to a travel agent in person and pay for their trip with cash. But in the US, our “travel advisors” are disintermediators like TripAdvisor. And Broadway—a business model that once relied in some degree on advisors like theatre party agents to fill houses in previews—has also been disrupted by the Internet.

Without middlemen, the article asks, who is persuading travelers to dream bigger about their vacations? A large purchase, whether a vacation or the show you see while on that vacation, needs more catalyst than the occasional banner ad or piece of native content.

My advice is that Broadway needs to take advantage of every distribution channel that’s available to us. It was never likely that every travel agent was going to recommend the show or attraction you’re selling. But it is possible to get listed on the majority of websites that replaced those domestic travel agents (Expedia, anyone?). Markets like Brazil and Japan still rely on travel wholesalers to dictate product to individual travel agencies. Group sales agencies use the old-fashioned power of human beings who love your show to sell swaths of tickets at a time, not just pairs. And even Broadway.com is a distribution channel that represents 10%+ of the gross for most shows.

Even when an FIT listing doesn’t convert to a sale on the site, you’ve served impressions that will add up when your buyer is ready to purchase—and that’s how a middleman can stretch your ad budget to transition your show from a fad, like fidget spinners, into a perennial best-seller.