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ASU students come up with innovative ideas for Arizona Opera to grow revenue

Immersive storytelling, craft nights among concepts at pitch competition

performers on stage
November 19, 2019

Like many arts organizations, the recession was tough on Arizona Opera, which is now working to ensure its financial future. In its 47th season, the opera company is partnering with Arizona State University to find new ways to grow revenue.

“It’s a massive problem for us to figure out how to make this centuries-old art form not just survive but become vibrant and exciting for people in a new millennium,” said Joseph Specter, president and general director of Arizona Opera.

Last week, a student pitch competition at ASU came up with several innovative ways for the company to repurpose its assets to promote itself, create a new fan base and make money beyond ticket sales.

“If I was to say to you, ‘I want the fastest way to raise capital,’ none of you would say, ‘Let’s start an opera company,’” Specter told the students.

“But why can’t this group here today be the one to figure out how that works?”

Specter gave the students the financial background of the company and discussed its resources, including a black box rehearsal space, offices, a parking lot, a warehouse and a huge LED wall, which the company already rents out.

More than 30 students from the W. P. Carey School of Business and the Herberger Institute for Design and the Arts divided into nine teams and spent the afternoon coming up with ideas.

The winning team, three MBA students, proposed using the company’s woodworking shop and costume shops to hold “craft nights” for families, with beer, wine and desserts. Other ideas were:

• Using the black box rehearsal space for an escape room adventure.

• Renting parking spaces at the downtown Phoenix building through the AirGarage app.

• Installing solar panels to save money and possibly sell excess electricity.

• Selling meet-and-greet events with the performers and behind-the-scenes tours.

• Creating a library of short performance videos for a subscription service.

• Making virtual-reality content so users can feel like they’re on stage with the performers.

• Creating a pop-up event with a “silent disco,” shops and food trucks.

• Using the company’s large LED screen for customized conferences.

One group suggested the company partner with other arts organizations on a coordinated campaign for social justice issues.

“There’s a need for this, and over history, art has been used to spread awareness of social issues,” said Vivian Chen, who’s majoring in finance and accounting.

“There’s a large population of people donating to social causes that you can tap into. This year you have the show ‘Fellow Travelers,’ tied to LGBTQ awareness, so take it one step further, build on the concept and have Arizona Opera be an entity known for spreading social justice.”

Chen’s teammate, Chase Gordon, described the plan: Engage with community partners on art exhibits, panel discussions and education sessions during the first week of a typical monthlong production.

“Then in the final week, hold a gala to bring in donors and try to raise money to get that revenue stream beyond tickets,” said Gordon, a global management major.

When asked if they had ever been to an opera, only a handful of students raised their hands. But they were eager to spread the word among their young-adult peers. Louise Hardman and Ryan Gunderson, both MBA students, teamed up to present the idea of immersive storytelling experiences.

“These escape rooms are trendy among millennials and Gen Z, who might not be inclined to go to the opera, and it will expand the live experience for current opera enthusiasts,” Gunderson said.

“We want the immersive storytelling to stay true to the opera brand,” Hardman said. “The biggest takeaway is the additional $2 million of earned revenue over five years.”

The winning team included MBA students Sivagurunathan Manickavasagam, Ashwath Rajagopalan and Zac Stucki. They were inspired by Stucki’s visit to a natural history museum, in which his family made craft items.

“Families could come and make a craft centered on the opera,” Stucki said. “There’s a lot you can do with minimal resources.”

Specter explained to the students that Arizona Opera was near financial disaster in 2013. When he was hired in 2016, Specter helped the company reinvent its financial and artistic model.

The “aha moment” was when the organization looked at peer opera companies, which receive about three-quarters of their revenue from donations and the rest from ticket sales. Arizona Opera received about two-thirds of its revenue from donations.

Contemporary operas draw more donations, so now the company performs more of those, like “Fellow Travelers,” about homophobia in the McCarthy Era, than the traditional works, like "La Bohème."

“When it comes to those beloveds, our income potential on ticket sales is high, and with new works, ticket sales can be variable, but we have a high potential for donations,” Specter said.

Friday’s pitch competition, which awarded a $5,000 grand prize, is part of the company’s OnPitch Business Challenge, an invitation to the entire community to create new funding concepts, with $25,000 in prize money to be awarded. All of the ASU student groups at Friday’s event are invited to enter their ideas. The competition, funded by a grant, is intended to decrease the company’s reliance on donations and ticket sales.

“That piece is important because if we come up short, we can’t sustain the organization,” Specter said.

Top image: To boost donations, Arizona Opera has performed more contemporary operas, and in 2017, commissioned "Riders of the Purple Sage," an adaptation of Zane Grey’s novel. The company will performed the show again in February and March. Photo courtesy of Arizona Opera.

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