When I am prospecting for new performing arts program book business, this is an often-asked question.
Either the prospect is thinking this question to themselves, or they flat out ask me–“can publishing my own program books save our organization money?”
And this leads into a great discussion.
My first thought when they ask this question, or sometimes I even tell them “that’s kind of like asking the fox guarding the henhouse.” And then we laugh.
But in all seriousness, every performing arts organization needs to ask this question.
“Remind people that profit is the difference between revenue and expense. This makes you look smart”—Scott Adams
To get to the answer to this question, as any publisher will tell you, you need to look at all your expenses associated with publishing your program books. Then subtract these from your program book advertising revenues. But this is only the tip of the iceberg, which we’ll get to in a second.
A mistake that I often see when talking with performing arts organizations when discussing their program book expenses is that they don’t account for all their expenses.
When they think “program book expenses” all they think about is their print bill. They don’t account for all the other stuff. The “other stuff” being selling costs, design costs, admin costs, etc.
These other costs are very important to capture, otherwise, you’re just fooling yourself.
Lots of times I hear “well our board sells all the program book advertising so we don’t have selling costs.”
Really? I reply.
In my experience, performing arts boards are typically made up of professionals—lawyers, accountants, financial advisors, etc.
If the board is selling the program book advertising, what needs to happen in this scenario, is to get each board members professional fees on an hourly basis.
Then figure out the amount of time each board member is spending on selling the program book advertising, once again on an hourly basis, and multiply these two numbers.
Now you have a true figure on your selling costs.
This will probably be quite a large number, especially if you have some very good professionals on your board. Their rate I would imagine is going to be quite high.
After explaining this to them, I often hear that this isn’t necessarily correct in calculating their time this way. The rationale is that because they are “donating” their time, these costs should not be figured into the program book expenses.
And my reply to this is that regardless of whether they are being paid or not, time selling program book advertising is taking time away from other things that the board could be doing. This is called an opportunity cost. So, these costs need to be captured.
Another cost that is often overlooked is the design cost. Some performing arts organizations have an in-house graphic designer. Typically, this person is responsible for all the graphic design of the performing arts organization. They are responsible for marketing materials, brochures, ticket envelopes, etc.
It is often thought that because this person does all these other things, the cost of designing the program book is already paid for. But this cost needs to be peeled out to get to the answer of whether publishing your own program books can save your organization money.
A pattern should start to be seen here.
When trying to get to the answer to the question of “can publishing my own program books save our organization money?” anybody and everybody that has a hand in the production of your program books needs to be captured in some form or another.
That means that even if the talent proofs their own bio’s, ideally, you want to capture this time as a cost.
After capturing all these costs, your typical program book financials may look something like this:
This is very simplistic but the simpler the better. Don’t over complicate it. Remember the KISS principle (Keep It Simple Stupid!) The most difficult piece to this will be capturing the time and rates for all that are involved.
Now back to that “tip of the iceberg” comment.
Hopefully that last number (Profit/Loss) is black, and hopefully, it is big. But my bet is that it will barely be black and it won’t be very big.
And this is where you need to ask the real question, “Is my performing arts organization a niche publisher, or do we foster the enjoyment, understanding, and development of the performing arts in our community?” Good selling!