403  Tango Economics 101: Workshops

Date: Sun, 13 Jan 2002 22:45:48 -0700
From: Tom Stermitz <Stermitz@RAGTIME.ORG>
Subject: Tango Economics 101: Workshops

Tango Economics 101: Workshops

Tango across the US is built on local teachers charging $8 - 10/ hour
and workshops with visiting masters, which cost $15 - $35. (Let's not
forget practices & milongas from $5 - 15).

Why does a 1-1/2 hr workshop cost $15 in one city and $35 in another?


I'd like to share some example workshop budgets below, but let's cut
to the single most important factor: ATTENDANCE.

If you get 40 - 50 people to a class (which sometimes happens in
Portland or Seattle), then it is possible for the organizers and the
teachers to break even with prices at $15.

I think that kind of success is less common.

More typical is the following situation:
- Classes of 15 - 20 people
- Prices of $20 - 25.
- Teachers make out okay,
- Organizers take a low or zero profit


The system in the US isn't as mature as in Europe where flat rate
contracts with the master teachers are more common. Here in the US,
you get a lot of variation from city to city.

There are three points of view on this: the student, the organizer
and the teacher.

The 4th point of view is what is best for the community.

It is possible to kill the goose laying the golden egg if:

- Prices are too high so the community doesn't grow and
students stay away from the workshops.
- The Organizer makes no profit, so doesn't do it anymore
- The Teacher takes too high a profit, and isn't invited again.


There are (at least) three typical contracts:
- Teacher gets 50% of the GROSS, Organizer covers expenses out
of his or her 50%, and keeps the profit.
- Teacher gets 2/3 of the NET, after expenses are removed.
- Teacher gets a flat fee, say $200/class.

Based on these three kinds of contracts I show 4 budgets below, which
indicate that 20 people per class is approximately break-even.

The 4th budget shows why you need 30 people per class in order for
prices to drop to $15.


Terms: 50% Gross 66% Net $200/class 50% Gross

Price: $20 $20 $20 $15 <-
Attendance: 20 20 20 30 <-
# Classes: 4 4 4 4
Gross: $1,600 $1,600 $1,600 $1,800

Teacher Fee: $800 $593 $800 $900

Airfare: 400 400 400 400
Rent: 200 200 200 200
Ads/flyers: 150 150 150 150
Expenses: $1,510 $1,303 $1,510 $1,610

Organizer Profit: $90 $297 $30 $190


For a teaching couple, the airfare would be double, and the price of
the workshop would need to be $5 higher just to cover that.

I recognize that local situations may vary, spaces may cost more than
$30/hour in your city, and airfare can go up or down. etc. But, the
only thing that really makes a difference is ATTENDANCE.

You can easily make the adjustments for your situation.

In addition, the visiting teacher typically makes $75 - 120 per hour
in private lessons. If this seems high, it should be pointed out that
this is considerably less than a private with a highly-credentialed
teacher or coach in the ballroom world.


Point of view of the Student.

We'd all love lots of tango classes, with great teachers at low
prices, but...here is what the profit looks like for three prices,
applied to the first budget listed above (changing only the price):


Price of Class: $15 $20 $25
Length of class: 1.50 1.50 1.50
Hourly Expense: $10.00 $13.33 $16.67

Teacher Earns: $750 $1,000 $1,250
Organizer Earns: -$110 $90 $290



The only editorial comment I'd like to make is the following:

Price doesn't always correlate with the credentials of the teacher.
This has something to do with the relatively high fixed costs of
airfare and teacher fee.

It also has to do with marketing to unsophisticated consumers.
--
Tom Stermitz
2612 Clermont St
Denver, CO 80207
home: 303-388-2560
cell: 303-725-5963

Date: Mon, 14 Jan 2002 15:30:20 +0900
From: astrid <astrid@RUBY.PLALA.OR.JP>
Subject: Re: Tango Economics 101: Workshops

Tom writes:

> Tango Economics 101: Workshops
>
> Tango across the US is built on local teachers charging $8 - 10/ hour
> and workshops with visiting masters, which cost $15 - $35. (Let's not
> forget practices & milongas from $5 - 15).
>
> Why does a 1-1/2 hr workshop cost $15 in one city and $35 in another?
>

You left out the rent for the facilities. Here is what skyrocketing land
prices lead to:
In Tokyo:
practica with Gustavo (90 minutes lesson + 2-2,5 hours of free dancing in
the West of Tokyo, 10- 25 participants): 2000Yen
lesson with Juan (90 minutes+ plus a bit of free practise in the center of
Tokyo, 12-30 part.) 3500Yen
lesson with Jose and Laura (80 minutes, 7-15 part.) 5000 Yen (this incl. the
room north of city center, which costs half a million Yen/3800$ a month and
manager's fee)
since they left their manager and teach in the same place like Gustavo: 80
min. 3000-3500 Yen
one US$ is now 132 Yen, up from 110.
Private lessons are usually 10000 Yen, with visiting stars 14000
A workshop (90 min) with Carlos Gavito is 6000 Yen
A private with him now a dizzying 19.000Y which is about 140$.
A milonga in Tokyo is 1000-3500 Yen (depending on where, with whom, with
food and drink or not) a milonga with shows by professional Argentines and
others 5000 Yen, is milonga organised by Japanese, with Japanese (semi)-pro
shows and a bit of food and drink, ironically 10000 Yen.
(renting a dance hall can be several 1000 $ an evening)

In comparison Berlin, Germany:
a milonga is 7DM (370 Yen/ 2,80 US$, no kidding)
a class with an Deborah and Emiliano: 20 DM (1100 Yen)
The room is an at least 60 year old ballroom in East berlin, where rents are
extremely low.
A workshop with Mora Godoy: 40DM, I heard

Astrid