America’s Orchestras in Crisis!
Lockouts Threaten some of America’s Top Ensembles!
The Philadelphia Orchestra Declares Bankruptcy!
Graying Audiences are Finally Dying
James Undercofler, Artistic Director, National Orchestral Institute and Festival, UMCP
The headlines numb us, we lovers of classical orchestral music, we who have spent our lives studying it, playing it, experiencing it live, and having our lives enriched, or even transformed by it. What’s there to do? Is it simply a matter of letting all the countervailing forces get the job done, leaving only a handful of well-endowed, metropolis-based orchestras to play on? My intent in this article is briefly to lay out what got us here, then to spend considerable time discussing what I believe can be done to revitalize the orchestra as an American institution.
Photo credit: UMCP School of Music
WHAT GOT US HERE
The current intractable problem is the result of multiple factors. Baumol and Bowen in their prescient work, Performing Arts: the Economic Dilemma, published in 1966, foresaw the primary financial elements of today’s crisis. Their analysis predicted that inevitable rising fixed costs (labor, concert halls, benefits) combined with a basic inability to increase productivity (the orchestra is the orchestra) and elevating ticket prices to keep up with rising costs (demand being dampened by increased product in the marketplace) would lead to the need for ever increasing amounts of contributed revenue (philanthropy). This gap between earned revenue and contributed revenue would continue, and would eventually lead to insurmountable financial challenges.
Perhaps what Baumol and Bowen only suspected, competition in the performing arts marketplace has escalated continuously from approximately 1970 until today. The range of options open to those who choose to experience live art is wide and impressive. This competition in the marketplace has caused orchestras to greatly expand their marketing efforts (and costs!). Peterson and Kern, writing in the American Sociological Review in 1996, in their article, “Changing Highbrow Taste: From Snob to Omnivore,” skillfully document the change in Americans’ cultural decisionmaking habits. The title of their article tells it all.
Demographic diversity in the U.S. has expanded our collective definition of what constitutes the performing arts. This affects orchestras’ abilities to raise both earned revenue (increased competition) and contributed revenue (foundations and government sources have expanded their pool of potential fund recipients).
In addition to increasing wages (fixed costs), musicians’ union contracts have steadily eroded orchestras’ ability to make money. Restrictions on travel and touring, distribution of services (rehearsals per week v. concerts per week), and a number of other provisions have made it difficult, or impossible to increase earned revenue.
Last, widespread inept governance from orchestras’ not-for-profit boards of directors has created distorted organizational structures. Extreme increased demand for contributed revenue from individuals has led to enormous boards of directors. These boards are often seen as prestigious placements for both those seeking social notoriety and seeking high-level business connections. Members are quite willing to “pay to play” annual contribution to gain access to the “club.” Yes, some are deeply interested in symphonic repertoire, but many are not. This phlegmatic interest in the organization’s core activities can have the effect of transforming the orchestral association into a type of social club, which can produce a deleterious effect on policy decisions, strategic direction, and financial matters.
Recent attention to the orchestra crisis was brought by Philip Kennicott in his article in The New Republic on August 25, 2013, “America’s Orchestras are in Crisis: How an effort to popularize classical music undermines what makes orchestras great.” Among his many observations, one stands out: that American orchestras through their many efforts to attract new audiences have ignored or alienated the serious, or core listener.
Yes, Kennicott is right, but one must understand his observation in light of orchestras’ almost hysterical efforts to attract new audiences (badly needing earned revenue from ticket sales). Orchestras have resorted to a wide variety of new programs. These programs often have promise, but to be successful require support funding for a number of years. So, without spectacular results in the first years of operation, funding dries up. Exacerbating the situation is rapid staff turnover resulting from inhuman workplace demands.
The core listener presents a conundrum for orchestras. He or she is the connoisseur, not particularly well off financially, so buys tickets in the best acoustical section of the concert hall (generally the cheap seats up top), and cannot make donations on the contributed revenue side. He or she is disdainful of efforts to attract new audiences, often calling them dumb-down tactics. On the other hand, the core listener knows his or her stuff, often fraternizes with the orchestra musicians, and lays the framework for artistic opinion on “the street.” The core listener usually feels that he or she “owns” the orchestra, and in some ways that is accurate because of an intimate knowledge the music, the ensemble, the nuance, the artistry, and can judge the effectiveness of the orchestra achieving—or not achieving—its artistic mission.
ROADMAP TO RECOVERY
The strategies for orchestras to go from ill health to robustness are complex and multi-faceted, but are achievable. Let me consider several of these strategies.
Increase Earned Revenue
♦ Build the core audience by attracting and retaining the core listener.
Each year higher education music schools, conservatories, colleges and universities graduate tens of thousands of music majors. Each of these students has experienced high levels of music making in large and small ensembles and has demonstrated deep interest in hearing and participating in music. They form the pool from which serious or core listeners develop. Why are only a fraction of them attending live orchestra concerts? Ask them!
● Too expensive: ticket price + baby-sitter +parking
● Accessibility: concert hall is in mid-town, traffic is a pain, and parking is difficult, concert starts at a difficult time (too late, get home too late; too early, can’t get home, feed the kids and get to the concert)
It’s all about logistics, not about the artistic product itself! Orchestras have got to solve these logistical problems to increase earned revenue from this potential, and important core audience. Concert halls located in large shopping malls, with concerts scheduled at movie times might go a long way to attracting, and retaining this potential audience. Play areas for their children and concerts aimed at their kids might seal the deal.
Some orchestras in recent years have recognized this potential audience, and have developed innovative programs to attract college-age students. Most notable among these is the Philadelphia Orchestra’s eZseatU, in which, for a nominal membership cost college students may attend as many concerts as they wish during a season.
The key, of course, is how to retain these students when they become young professionals, then young professionals with partners, then with children. Surely one strategy, in addition to the proposed solutions above (cost and accessibility), is to ask them, ask them constantly for their advice, and take it.
♦ Adopt dynamic pricing and programming.
Airlines use dynamic pricing: low demand means lower ticket prices, high demand, and high prices. Empty seats are sold according to demand equations. And, yes, some orchestras use a version of dynamic prices; applying formulae to the seat demand within the hall, but none universally prices the “house” according to repertoire demand. Why shouldn’t those concerts with the higher demand (and usually the highest cost to produce) cost more? Beethoven’s Ninth, Orff’s Carmina Burana, Rachmaninoff‘s Symphony #2, among others, are big sellers. Orchestras could see these concerts way above normal ticket prices. Concertgoers would scream, and serious listeners might pass, but the house would still sell out, and earned revenue would spike.
The same principal should be applied to the repertoire itself. If performing Carmina, give six concerts during the week, instead of two, three, or four. All will sell out, and dynamic pricing could be applied to which days high demand would or would not be expected. The problem with this solution is that musicians’ contracts specify how many services, usually seven, they must attend each week. The specified mix is generally four rehearsals and three concerts. Management cannot change this mix to six concerts and one rehearsal.
♦ Diversify product line and delivery
Though a number of orchestras have tried to segment their concerts series, the idea of doing so still remains illusory, despite solid market research, e.g., Alan Brown’s A Segmentation Model for Performing Arts Ticket Buyers, 2007.* Tradition dies hard, but with orchestras it seems to be “die with tradition!” Brown defines specific market segments with specific tastes, and demonstrates that if programming is directed toward the appropriate customers, the customers will be pleased, and want more. Again, some orchestras have experimented with this approach, but tradition (old-school music directors, stodgy boards, etc.) has fought back against it, caused retrenchment.
♦ Diminish expenses without sacrificing artistic quality.
We must first look at the contracts of the staff, musicians, and artists. Baumol’s “curse” focused to a high degree on the intractability of fixed costs. He might have argued that you cannot increase productivity by reducing the size of the orchestra. Some orchestras have tried reducing their size, but then find that the artistic experience is greatly diminished because the sound just doesn’t fill the hall. The result is a diminished audience size.
To diminish costs, salaries and benefits have to come down, or at best stabilize. Staff costs, especially at the executive level, are ridiculously high, as are those of senior staff officers. These salaries can be reduced. Musicians’ salaries are by and large reasonable, but they cannot continue to rise any faster than an orchestra’s ability to increase earned, not contributed revenue. Cost savings, as well as opportunities to increase earned revenue, are to be found in the work rules and benefits sections of musicians’ contracts. Musicians will have to come to grips with present realities of the orchestra crisis and yield on a wide range of work rules, so as to allow orchestras to reduce costs and increase their “product line.”
Artist fees are inflated, and can be driven downward. By and large, audiences are less motivated today by who is on the podium or who the soloist is than in previous “maestro-centric” days. Numerous marketing surveys support this assertion. Of course there are exceptions, and these jump to mind: those with electrifying podium presence, e.g., YoYo Ma, but these exceptions are in the minority. Audiences make their decisions about attending a concert based more on accessibility issues and repertoire than on featured artists.
And, there’s an amazing deep pool of talent from which orchestras can choose their conductors and soloists. Once more orchestras begin to draw from the wider pool, fees of the top tier will come down. NB: on a typical series of three weekend performances by a major city orchestra, the artist fees for soloist and conductor can average over $100,000.
A drastic, long term solution would be to dump the expensive downtown concert halls for much less expensive, more accessible venues. The costs of maintaining these downtown concert halls are exorbitant, from utilities and maintenance to the personnel required to operate them successfully. This part of the “business model” is downright broken, and in need of serious thought.
♦ Stabilize philanthropy.
One significant fallout for orchestras from the Great Recession of 2008 was the diminution of charitable giving from foundations, businesses (including sponsorships) and government (local, state and federal). Foundation giving was significantly reduced because foundation endowments were hard hit, and social challenges exacerbated by the recession caused a redirection of resources away from classical music. Even before the recession, businesses were reducing their support, spreading their resources more broadly in their communities. The recession accelerated their reduction. And there’s no reason here to elaborate here on how government-funding agencies were hammered by both the recession and political infighting.
Individuals did step forward during the post-recession period, helping to partially close the widening gap between reduced revenue, reduced giving by agencies and expenses. Recently, they have, understandably but also unfortunately, shown true donor fatigue. For orchestras to rebuild and thrive in the future, they will need significant and consistent giving from individuals. So, how can orchestras keep existing donors interested (and giving) and attract new ones?
Certain themes attract donors: community development, children’s education, and art as it relates to civilization building. Orchestras can do all three of these particularly well, but need to demonstrate each, both honestly and clearly. Regardless of what orchestras’ mission statements say, the sad reality is that they only really mean, “play great music greatly.” And of course, we want them to, but they will need to do this within the three aforementioned contexts.
Midway through the 1990’s a new type of donor emerged (or was finally found in sufficient numbers to be named): the transactional donor. So numerous were these donors that a new giving platform, the donor advised fund, was invented. The trustees of these funds hear donors’ thoughts and opinions, then make their decisions. The donor does not decide per se, but advises. The rise of the transactional donor has led to funding initiatives in orchestras (and other not-for-profits) that are often distorted and marginally related to missions. In many cases the programs and projects that result from transactional giving end up costing orchestras more than if they had left the gift on the table. Sadly, development professionals often accept these “deals’ because they rationalize that making the donor happy will eventually lead to greater (unrestricted?) giving.
To stabilize philanthropy, orchestras are going to have to stick to core themes, those that are closely related to mission. They will need to bite the bullet and see a dip in overall giving in order to get back to genuine relationships with supporters.
The three elements detailed here—Increase Earned Revenue, Diminish Expenses without Sacrificing Artistic Quality, and Stabilize Philanthropy—can comprise a roadmap to recovery…but, not without considerable grit from those employed by orchestras, and generosity from those who “own” them, the board and public.
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*http://wolfbrown.com/mups_downloads/MUP_Ticket_Buyer_Segmentation_Report.pdf. His ten segments have such names as Mavericks, Experientials, and Remixers. They are, respectively, younger, fearless, and values-driven; monied, inclined to subscribe, with a big appetite for risk; and interested in contemporary culture and value diversity.
THE NATIONAL ORCHESTRA INSTITUTE
Our author is apparently too modest to indicate the contribution to orchestral and other music of the institute and festival he directs. Here are some notes:
- Over 80 talented orchestral musicians are selected to participate each year, and each of them receives a scholarship worth over $4,000.
- Internationally renowned conductors rehearse the orchestra and conduct performances
- Distinguished musicians, including many principal players in major symphony orchestras, work closely with participants to polish ensemble skills and orchestral excerpts
- Each week culminates with a public performance in the UMCP’s Clarice Smith Performing Arts Center
- NOI members participate in an unconducted chamber orchestra to build chamber music and leadership skills.
- Chamber Music at NOI offers rewarding study of the chamber music literature with distinguished faculty in the field and a final recital in the Performing Arts Center
- Previous NOI members have won positions with major symphony orchestras, including the Baltimore, Boston, Cleveland, Detroit, Philadelphia, and San Francisco, plus the Los Angeles, New York, and Israel Philharmonics, and the Metropolitan Opera Orchestra. (The FV editor cut many named orchestras for space.)
Clearly, the institute and festival contribute significantly to the life or orchestral music in the United States—and probably elsewhere
UNIVERSITY ORCHESTRA PERFORMANCES
Salisbury University Orchestra
December 7, Opera Arias
March 8, Cello Works by Vivaldi and Mozart
May 11, Beethoven P:iano Concerto No. 4
Maryland University Orchestra
December 6, Tchaikovsky’s Symphony No. 6
March 1, Ravel’s Daphnis & Chloe Suite No. 2, Bruckner’s Symphony No. 5
May 4, Copland’s Appalachian Spring, Dutilleux’s Metaboles, Gershwin’s Porgy & Bess
NOTE: UMCP also has a Repertoire Orchestra and a Wind Orchestra.