Pardon the Interruption
The great political satirist Molly Ivins once wrote that there was nothing in the world so irritating as someone who stops in the middle of a perfectly good argument to insist that everyone define his terms.
So you have my apologies for what follows here. A few weeks back, I wrote about the wave of articles that inevitably appear during an economic downturn claiming that American orchestras can't possibly continue to exist without massive overhauls to our business plan. My point was that such articles usually don't contain a lot of data, and that they frequently miss the point of the deep cuts that orchestras are forced to make at times like these. The money line was: "The headlines trumpeting layoffs and salary givebacks aren't evidence of the failure of a business model. They're a demonstration of how the model bends without breaking."
I really was going to let that be the end of it, but then, this weekend, no less illustrious a paper than the Chicago Tribune ran a commentary that so completely missed the reality of the orchestral situation that I feel I have no choice but to stop the argument and demand a defining of terms.
The author's main point is nothing new: the business model for American orchestras is broken. (Evidence presented to support this thesis: none.) His solution: everyone, from music directors to guest conductors to CEOs to soloists to musicians in the better-paying ensembles, needs to take pay cuts. Big ones. Now. (He also implies that this isn't already happening, which it is.) That's it. That's his whole solution. And this is where I have a nit to pick, because, wait for it... salaries are not a business model.
That's really all I wanted to say. If you want to have a debate about the way American orchestras fund themselves and operate as organizations, let's do it. If you believe that the existing system, in which private donors and corporations make voluntary donations to support a huge (by non-profit standards) corporation that presents orchestra concerts, is unsustainable, let's talk about that. And if you (saints be praised!) have a new model you think will work better, by all means, we'd love to hear it!
But by saying that the whole organizational model has failed (again, without evidence of a failure,) and then saying that the solution is for everyone to make less money, you're making the embarrassing admission that you don't know what a business model is. What you're actually proposing is the same business model, only with everyone earning less. Which, as I mentioned, is pretty much what's already happening, orchestra by orchestra.
Honestly. It's enough to make you wish that business writers covered our beat instead of arts journalists. Almost...
So you have my apologies for what follows here. A few weeks back, I wrote about the wave of articles that inevitably appear during an economic downturn claiming that American orchestras can't possibly continue to exist without massive overhauls to our business plan. My point was that such articles usually don't contain a lot of data, and that they frequently miss the point of the deep cuts that orchestras are forced to make at times like these. The money line was: "The headlines trumpeting layoffs and salary givebacks aren't evidence of the failure of a business model. They're a demonstration of how the model bends without breaking."
I really was going to let that be the end of it, but then, this weekend, no less illustrious a paper than the Chicago Tribune ran a commentary that so completely missed the reality of the orchestral situation that I feel I have no choice but to stop the argument and demand a defining of terms.
The author's main point is nothing new: the business model for American orchestras is broken. (Evidence presented to support this thesis: none.) His solution: everyone, from music directors to guest conductors to CEOs to soloists to musicians in the better-paying ensembles, needs to take pay cuts. Big ones. Now. (He also implies that this isn't already happening, which it is.) That's it. That's his whole solution. And this is where I have a nit to pick, because, wait for it... salaries are not a business model.
That's really all I wanted to say. If you want to have a debate about the way American orchestras fund themselves and operate as organizations, let's do it. If you believe that the existing system, in which private donors and corporations make voluntary donations to support a huge (by non-profit standards) corporation that presents orchestra concerts, is unsustainable, let's talk about that. And if you (saints be praised!) have a new model you think will work better, by all means, we'd love to hear it!
But by saying that the whole organizational model has failed (again, without evidence of a failure,) and then saying that the solution is for everyone to make less money, you're making the embarrassing admission that you don't know what a business model is. What you're actually proposing is the same business model, only with everyone earning less. Which, as I mentioned, is pretty much what's already happening, orchestra by orchestra.
Honestly. It's enough to make you wish that business writers covered our beat instead of arts journalists. Almost...
Labels: state of the art, the business of music, the media
posted by Sam at
8:51 AM
17 Comments:
I think the point of Von Rhein's article was mostly to do with high music director and guest artist fees, and the interaction of the for-profit companies that manage those artists with the non-profits that pay for their services.
That, to me, was the highlight of the article, saying they should join the rest of us in cutting back. I agree that this is not really proposing a "new business model;" that term, unfortunately, is becoming something of a cliche that in this case really doesn't fit.
Yes, he is primarily talking about conductors, soloists, and executives, but my point is that these are all groups of people who have demonstrably been willing to take hits when necessary to help out struggling orchestras. Von Rhein made it sound like this barely ever happens, when in fact, it's quite common during economic recessions.
What he's really doing is trying to stir up some of the populist outrage that sells so well these days by throwing out salary numbers without a lot of context, such as whether such payments are actually more than orchestras can bear or not. Some guy on the street who never goes to the Chicago Symphony may think that Bernard Haitink gets paid too much money to wave a stick around, but if the people who support the orchestra (which is to say, not that guy) don't agree, then it's irrelevant.
Our business operates in a market economy, and as I've written before, healthy arts groups respond to economic conditions by cutting where and when necessary, and by spending when and where we find we can. At the moment, we're cutting. And that is not and never will be a sign of a failed business model.
Just for contrast, by the way, here's the way Andrew Patner of the Sun-Times covered the same Chicago situation Von Rhein was writing about. He explains the cuts they're making, gets into the issue of whether these cuts represent a systemic (read: permanent) problem or not in a responsible way, allows the orchestra's leaders to explain what their strategy is, and generally presents a coherent picture of the situation. A nice contrast to the Tribune piece, if you ask me...
here are some examples that should be mentioned:
Opera Pacific (CA) gone for good
Connecticut Opera, gone for good
Baltimore Opera, gone (for good?)
Santa Clarita (CA) Symphony, 2009 season cancelled.. next season in jeopardy
Brooklyn (NY) Philharmonic. gone for next season at least
Opera Orchestra of NY, rest of 2009 season
Honolulu Symphony- musicians haven't been paid for months
I think the vulnerability in the orchestra business model has little to do with salaries and much more to do with fragile sources of revenue. The extreme dependency on the generosity of philanthropy, whether from public or private sources has severed the Achilles tendon of many small and large arts groups during this recession. Critical to the endurance if not prosperity of the arts is the ability to create new and independent sources of earned revenue. Recently in Seattle at the "Bach to Byte" conference the Titans of the technology industry were bought together with many leaders in the classical performing arts to discuss just that- how can we utilize technology to create new revenue streams and build new audiences.The group identified many unique strategies with great potential and worthy of future pursuit.
To move from a credit model of funding performance{which includes the fundraising strategy of hope} to a debit model based on financial independence i.e. we have raised/earned the financing for another season and now we can plan to spend it, is an optimal business model for the future and a positive legacy of this recession.
Thanks, Anonymous. If you start with the premise that the classical music industry is collapsing then of course you're going to find examples of a few failed arts orgs. I can name a few airplanes that have crashed, and that doesn't mean all planes are about to fall out of the sky.
It's also worth keeping in mind that there are always going to be some good orgs that close even during the best of times, like Theatre de la Jeune Lune in Minneapolis, which closed in June 2008 before the economic crash.
To Anonymous's point, which I believe was that the failure of the mentioned ensembles is a sign of a collapsing business model:
I've written several times that recessions almost always see the tragic loss of a few small orchestras and opera companies. Almost without exception, these groups are in serious trouble well before the downturn, and are pushed over the edge by the sudden change in the national economy. Essentially, bad management and lack of planning begets unfortunate results when things take an unexpected turn for the worse in the broader economy.
Also worth noting is that, of the ensembles you cited, the only one that has ever in its history been anything approaching a full-time professional ensemble is the Honolulu Symphony, which has been staggering badly for as long as I've been in the business, and tends to be held up as a textbook example of How Not To Run A Professional Orchestra, Ever.
The rest of the groups on the list, while certainly valuable to their supporters and communities, are part-time freelance bands with tiny budgets and (usually) no endowments. In other words, they're like banks with no capital - primed to fail the moment they can't raise next week's payroll. The business model I (and most music critics) talk about when we refer to the orchestral business model is that of medium-to-large full-time professional orchestras with endowments, professional management and full-time staff.
To Jennifer:
I would love to believe that technology might someday lead orchestras to a model of self-sustainable profitability, but frankly, I'll believe it when I see it. To this point, a horde of truly brilliant people running companies like Google and Microsoft have failed almost entirely to find ways to make a profit from hugely popular sites like YouTube and Facebook, which are used by millions of users everyday. I think new media is hugely important for orchestras, and there are a hundred ways that I wish we were doing a better job of embracing technology, but I'll be stunned if technology ever manages to lead us away from the philanthropic model.
I enjoyed that last line quite a bit. I read von Rhein's article, thinking the whole time that I wish a business writer could have offered an assist with terms like "business model" and "line item."
But here is a basic problem with the business model. The real business model. Expenses in this industry grow much, much faster than ticket revenues, placing greater importance on the kind of endowment growth that only occurs during gilded age bubble-cycles (unsustainable), or greater pressure on fundraisers to make up any gaps (also unsustainable). The tricky part is that we don't know ahead of time when market growth is going to plateau, or crater. And we don't know when generous donors are finally going to say enough is enough.
The "Business Model" of philanthropy for orchestras is just that, a "Business Model". For some reason there are many who seem to think that earned income from ticket sales is a more valid or proper approach to funding orchestras. The truth is that all "not for profits", including those in the arts, earn income by creating relevance in their communities so that patrons, foundations, governments, and corporations will support their work.
This is not unlike the stock market or any other financial venture. Does anyone really believe that the capitalization of most companies is equal to their value? We invest in the market to provide capital for business so that when the value of the business increases our stock values increase. No one gets the payoff for past earnings.
The same can be said for all donors to orchestras and other non-profits. The profits may not be monetary but they have results that matter to their investors.
During this recession, orchestras are doing what all businesses are doing; evaluating their position and taking the appropriate steps. Some will choose to close (I would bet that the number of closed orchestras compared to shuttered businesses in the general public would be quite small), and others will figure out how to survive and prepare for future growth and downturns as they will inevitably occur. Those who are not making the tough choices or have inadequate governance or administration will fail.
Individual orchestras will survive or perish like all other businesses. When we see return on investment, we continue to provide the necessary capital for growth.
the academics strangled all the power and beauty and tonality out of contemporary classical music for almost a century now, making serious modern music something that the average person doesn't want to hear - the only product orchestras have to entice the public is more "Pines of Rome," "Firebird Suite," Tchaikovsky Sympnonies, etc. - the public isn't stupid - they want modern works of great power, beauty and tonality - and they've been let down for generations - BAD PRODUCT = BAD BUSINESS - shame on academia
This comment has been removed by a blog administrator.
Okay, folks. I just deleted a comment, which I hate to do, but we're not about to let this blog devolve into the sort of shouting match that passes for discourse in some corners of the online world.
If you want to debate issues in our comments, please do. We love hearing your opinions, even (especially) when they differ from ours, and I'm thrilled that we've had some good discussion on this post. But taking personal shots at other commenters, and insulting their intelligence is unnecessary, and will get you deleted. Thanks for your understanding...
Why is no one out there talking about the odd marriage of a non-profit institution (the orchestra corporation itself) with a union/collective bargaining partner (the musicians and their union contracts)? THAT is the model that needs some adjustment and attention, with all due respect to both parties. Also, let's be fair to state that most orchestra staff members make even less than what an entry-level musician makes (and many of these staffers have advanced degrees also in their field). Also, many musicians are shocked to find out that the staff members (except for the very top brass) do NOT have contracts and can be ousted from their jobs for no reason at all with just a few minutes' notice where as most musicians are tenured and have some degree of protection for their jobs. This is not to decry the importance of the musicians at all, but somehow there needs to be a better balance, so that one side does not always feel pitted against the other. Each is there to serve the other; one cannot exist without the other.
Why is no one out there talking about the odd marriage of a non-profit institution (the orchestra corporation itself) with a union/collective bargaining partner (the musicians and their union contracts)?Probably because it's not in the least odd. Nearly every performing arts organization in America has one or more unionized portions of its work force. Stagehands, actors, musicians, and dancers all tend to be unionized, and there's nothing strange or inconsistent about negotiating collective bargaining agreements in a not-for-profit environment.
That having been said, it's absolutely true that orchestra staffers, like most non-profit workers, are chronically overworked and underpaid, and lack the job protection that unionized workers enjoy. I've always wondered why no large-scale effort has been made to unionize American arts staffers...
Just wanted to add to this conversation by linking to an op-ed published in the Wall Street Journal a few months back. The author, conductor and Bard College President Leon Botstein, makes a very strong argument that classical music is actually thriving:
The Unsung Success of Classical Music | WSJ.comI think this article contributes to this discussion, because Los Angeles, Atlanta, and Minneapolis are singled out as places where the orchestras' innovation and relevance has made a difference.
It's sad to see certain arts orgs go belly-up, but listing a few odd groups and as proof that the whole model is flawed isn't very logical.
And as for "academia" killing the arts, how would you explain the programming at Columbia's Miller Theater? It sells out and thrives. Some of that music isn't for everyone, but trying to assign blame for classical music's imminent demise on Schoenberg or Ferneyhough is going a bit far.
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