Here’s an update on the industry’s negative substitution ratio – and what this means for cultural organizations.
Efforts to expand and diversify audiences to cultural organizations have notably increased in the past two years. Since the start of the year, we’ve shared with you some exciting progress in terms of elevated welcoming perceptions for cultural organizations and increased trial by first-time visitors during the pandemic! Simply put, active efforts to prioritize diversity and inclusion are beginning to yield improvements. On top of that, shifts toward more localized travel behaviors (instead of extended-stay cross-country vacations) during the pandemic generally activated regional audiences who had trying out the local area museum on their respective to-do lists. For many markets, these local audiences tend to be more diverse on multiple fronts.
But will the increased trial by more diverse audiences prove durable enough to become actual conversion to a more diverse visitor profile in the long-term?
It’s a good question – and it’s one that we’ve been tracking at IMPACTS Experience since long before the pandemic. If you’re familiar with our work, then you may already know a thing or two about the phenomenon of negative substitution. And you know that the need to expand audience profiles was urgent far before the recent uprising against racial and social injustice.
What is negative substitution?
Negative substitution is a globally occurring phenomenon wherein the number of people who profile as active visitors leaving the market outpaces the number of people who profile as active visitors entering the market. In a nutshell, people who fit the (slowly evolving) profile of a cultural visitor are leaving the market (by way of death, relocation, or migration) faster than these entities have been able to expand their audiences. Keep in mind that the profile of an active visitor evolves over time and is based on the current demographic, psychographic, and behavioral attributes shared by people who have recently visited a cultural institution. Thus, the attributes of an “active visitor” are not fixed, but are the attributes of the people who tell us they’ve visited a museum recently at any given time.
Negative substitution is taking place because the market is growing more diverse, while perceptions of cultural organizations as being places for a certain kind of person have not evolved fast enough to keep pace. When there are fewer people in the market who profile as active visitors year-over-year while population growth stems largely from people who profile as nontraditional audiences, an organization’s market potential risks fewer-and-fewer visitors over time. Negative substitution was the driving reason for the decline in attendance to many museums, zoos, aquariums, performing arts entities, and other visitor-serving organizations even prior to the pandemic in 2017.
The data below is an aggregate of the 224 US cultural organizations that we monitor at IMPACTS Experience coupled with visitation information from the National Awareness, Attitudes, and Usage Study of (currently) over 180,000 people as of end of year 2021.
A 1:1 ratio is one in which people in the US market who profile as an active visitor are entering the same market at the same rate in which they are leaving the US market. This one-in and one-out creates a sustainable engagement model. A long-term growth goal, of course, is to achieve positive substitution.
Let’s start with the aggregate for exhibit-based organizations. This includes museums related to art, history, science, children’s museums, historic sites, zoos, aquariums, and botanic gardens, for instance. The negative substitution rate for exhibit-based organizations shows that for every single historic visitor who leaves the US market (by way of death, relocation, or migration), they are being replaced by only 0.968 of a person (by way of birth, relocation, or immigration). At first glance, this may not sound particularly worrisome – but this is actually a significant finding with major impact on the sustainability of museums.
Think of it this way: An organization with a stable attendance of 1,000,000 visitors may keep doing everything right by their current audiences (e.g. marketing, developing exhibits, etc.), and then might reasonably expect to engage 968,000 future visitors… and then 937,024 visitors….and then progressively fewer yet visitors over each visitor engagement cycle (which currently approximates 30 months for exhibit-based entities) absent interdiction. And they will be doing everything right by their current audiences!
The negative substitution rate for performance-based organizations is even more urgent. It shows that for every historic visitor who leaves the US market, they are being replaced by only 0.904 people. For a general performance-based entity welcoming 1,000,000 patrons per year, that same organization might reasonably expect to engage 904,000 future visitors… and then 817,216 visitors per year by the next visitor engagement cycle (which currently averages 34 months for performance-based entities). In sum, performance-based organizations have a particular need to expand their audience profiles over time.
Expanding audiences isn’t simply “the right thing to do” or “an important part of a goal to welcome everyone” as we commonly hear in board rooms and throughout institutions.
Make no mistake: expanding audiences is also a business imperative.
Organizations that only evolve to better meet the needs of the kind of people who are already visiting risk long-term attendance. Certainly, cultivating more engaged superusers is a critical goal as well – we love our members and subscribers! They are increasingly critical for pandemic recovery! However, even as we work to garner more support from them, they are still a shrinking market segment.
Are negative substitution ratios better than five years ago? Are things improving?
It’s been a big five years, to boot. In that duration, we’ve experienced an increased understanding of the need to expand audiences, an uprising against injustice, and the pandemic served to increase trial amongst nonrecent and first-time visitors…but just because somebody trials something once doesn’t mean that they are thereafter converted into a “museum goer.” The trial may not have met expectations!
I tried anchovies once. I am still not a seafood eater. Even if I was, I will not willfully eat anchovies again. (On a marginally related note, I’ve long since become a vegetarian.) A museum trial does not necessarily make someone a forever museum-goer. Trial and conversion are different things.
Negative substitution is a particularly important metric right now because research shows increased trial for cultural institutions among more diverse audiences, but we need to wait and see if these trials become conversions that permanently expand cultural audience profiles.
Conversion is a long-game. It takes time to change up audience profiles for an entire industry. The numbers in this article represent findings as of the end of year 2021. For exhibit-based organizations, negative substitution has gotten better over the last five years. In 2017, negative substitution for exhibit-based organizations was 0.957. Today, it is 0.968. These numbers may seem miniscule to the untrained eye, but this represents literally thousands of visitors for many organizations. On the whole, this is celebration-worthy improvement and movement in the right direction.
While we’ve already seen positive movement, now is the time to keep an eye on negative substation as we begin to understand how recent trials and DEIJ initiatives are converting audiences and truly expanding profiles.
How negative substitution is affecting select organization types
We are able to further parse the negative substitution rates of specific types of cultural organizations. Here’s a sample of them and some notes that may contribute to the negative substitution rates of each visitor-serving type. Let’s go backward from those with the relatively “best” negative substitution rates to those with the biggest opportunity.
Increased: Ratio was 0.989:1.000 in 2017
Zoos: Among visitor-serving organizations, zoos are still suffering least from negative substitution. Indeed, zoos are closest to the 1:1 target for sustaining attendance over time. Generally speaking, zoos and aquariums elevated their perceptions related to animal care and welfare during the pandemic thanks in large part to elevated mission-messaging during closures. Zoos may more easily deliver on the promise of awe and wonder without facing some of the perceived intellectual intimidation that may be attendant to a science or art museum visit. Moreover (and interestingly), lexical analysis of data reveals that being outside may play a role in making people feel more comfortable visiting zoos, not to mention mitigating coronavirus concerns in recent years and the related redistribution of demand toward this organization type.
Increased: Ratio was 0.985:1.000 in 2017
Aquariums: Aquariums are also suffering notably less than the industry average. That said, negative substitution is never a good thing – and there’s still important work to be done. A reason for these comparatively higher values may be that aquariums are among the types of visitor-serving organizations that are most dependent on attendance to achieve their business objectives, and thus tend to make decisions with special attention to market research. Amongst organization types, aquariums generally have the lowest levels of government support, the smallest endowments, and many have also emphasized their conservation mission that engenders additional support. Aquariums also may also capture awe and wonder without the perceived intimidation factor that may burden other content types.
Increased slightly: Ratio was 0.951:1.000 in 2017
History museums: If you’ve been paying attention, you’ve noticed that history organizations are having a moment when it comes to elevating their welcoming perceptions. So why hasn’t negative substitution gotten much better since 2017? First, remember that changing up the audience profile of an industry takes time. Second, the uprising against social injustice and history organizations tackling more traditionally “difficult” stories is still relatively new. By watching this metric over the next couple of years, we’ll see if the trial that some history museums and historic sites are securing will lead to audience conversion. Also note that history organizations (e.g., museums, sites, houses, memorials, cemeteries) remain above the industry average in terms of negative substitution. History organizations tend to rely more heavily on human stories than other types of organizations that may be perceived to revolve around specific, individual artworks or exhibits. This may be the negative substitution ratio that I am most eager to keep watching in the coming years as we ascertain just how much increased trial becomes conversion and changes up the visitor profile.
Increased slightly: Ratio was 0.946:1.000 in 2017
Art museums: Art museums fall below the industry negative substitution average for exhibit-based enterprises. As the forefathers of “don’t touch,” “stay behind the line” and “quiet, please” cultural engagement, it’s worth noting that art museums may have been starting from a relatively uninviting place. Like history organizations, art museums have recently experienced a boost in their welcoming perceptions. This substitution ratio will be similarly important to watch over the next few years to better understand how/if current efforts have expanded the profile of the “type of person” who visits an art museum.
Decreased slightly: Ratio was 0.939:1.000 in 2017
Science museums and science centers: An immediate instinct upon seeing that negative substitution did not increase for science museums may be to consider the pandemic and the redistribution of demand away from indoor experiences that highlight touch. While that may impact ratios slightly as of EOY 2021, we will need to watch this metric to see if it sticks. Another reason why this ratio is lower than average (and may continue to get worse over time) is perhaps because science museums and science centers tend to be viewed as places to visit with children. The percentage of people with children in the US is shrinking. So, too, is the percentage of people in the US who are currently interested in visiting a science museum. The key to achieving 1:1 visitor substitution – or simply staying at this level – may be for science museums and science centers to underscore that they are also suitable destinations for people without children (including couples and adult friend groups). At IMPACTS Experience, we’ve worked with partner science organizations that have successfully expanded their audiences through considered programing and marketing messages.
Decreased: Ratio was 0.910:1.000 in 2017
Orchestras: Of course, performance-based organizations are every bit as critical for a robust and vibrant cultural community. Like exhibit-based entities, performance-based organizations encompass a broad group of organization types and some broader types (e.g., festivals) generally have better visitor substitution rates than others. Unfortunately, orchestras may be facing particular challenges in engaging younger and more diverse audiences. While the absolute number of people who find them welcoming has increased in their perceptions enough to move the needle, the percentage of the US population that does not feel welcome has grown. It’s been a decades-long endeavor to achieve diverse representation on a symphony’s stage. There are several other reasons why these numbers have been difficult to move for orchestras. Certainly, they represent a critical and nuanced opportunity.
The need to satisfy members and subscribers while cultivating new audiences as regular attendees is critical for our long-term survival. The first step to overcoming negative substitution may be acknowledging the actuality of the challenges we currently confront, followed by working to meaningfully convert new audiences into regular cultural organization visitors.
To change up these perceptions, we need to keep all hands on deck. Though there have been meaningful improvements worth celebrating, negative substitution remains a troubling challenge. It means that our current engagement rates are not sustainable unless we cultivate new visitors…who then convert to regular visitors. The trial and elevated welcoming perceptions enjoyed by some organizations is encouraging – and deserving of praise! Still, the industry must keep moving forward in its efforts to expand audiences. Our long-term vitality and relevance remains on the line.
Let’s keep going.
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