There is an old English saying that goes: “You get what you pay for.” In other words: “Don’t expect more from a product than what you paid for it.” In general, this old adage is true to life — but the opposite also applies: “If a product has lived up to your expectations, pay what you think it deserves.”
This is exactly what Spanish comedy troupe Teatreneu (who specialize in improvisational theater) thought in the summer of last year. In 2013, the debt crisis was affecting every corner of Spain; the state was bankrupt, unemployment levels were high, and prospects were poor (fortunately, the outlook today is rather different). One of the countermeasures that the government introduced in response to this crisis was to raise the VAT levied on events such as theater performances by a huge amount — from 8 to 21 percent. Teatreneu—along with the rest of the cultural sector—had to fight against increasing reluctance from the public to part with their cash, as well as dealing with declining audience numbers. Spend money laughing
The audience felt that they had been treated well, and that they had been taken seriously as consumers
To counter this trend, Teatreneu remembered the saying mentioned at the start of this article and developed a new billing method: “pay per laugh”. The idea is as simple as it is brilliant: In principle, admission to the event is free for everyone. The costs for the spectators are incurred with each laugh. All seats in the theater were equipped with tablets that use face-tracking technology to keep an eye on the audience’s faces during the performance. A smile? A grin? A slap of the thigh? The cash register was soon ringing! 30 cents was charged each time that the action on the stage caused the spectator to laugh. To make sure that a boisterous evening with a raucous crowd did not culminate in a new national debt crisis, the cost for each spectator was capped at 24 euro — the equivalent of 80 laughs.
The result was—and is—phenomenal. The audience felt that they had been treated well, and that they had been taken seriously as consumers. What’s more, the proceeds from ticket sales increased by 6 euro per ticket. Thanks to the positive media coverage, the total number of spectators also increased by around 35 percent. Accounting for the performance
Since the first showing, the “pay per laugh” system has found many supporters in Spain’s capital city
At the end of the show, everyone in the audience was presented with their individual laugh fee/bill, which they could then share on social networks and compare with the person sitting next to them via large screens. This breakdown also allowed the performers to examine their performance more closely — not only in terms of revenue, but also in terms of artistic success: Had the show been well received? Where could improvements be made?
Since the first showing, the “pay per laugh” system has found many supporters in Spain’s capital city, with several independent comedy venues adopting Teatreneu’s idea. A mobile app has now been released, which other organizers can also use as a payment method.