Category Archives: The Orchestra Business

Cost Disease Confusion: Part 1

Ever since the Minnesota Orchestra lockout began, I’ve read a lot of articles on arts administration. (And from a unique perspective, too: not as a board member or an employee or a union shill, but as a concerned audience member.) Once in a while I’ll disagree with a particular point, debate it with friends, and then tuck the insights away.

But. Last month I read an article that made me say “wait a minute…” so many times, I knew it could be used as bloggy fodder and discussion. It’s called Baumol’s Cost Disease Is Killing Me, and it was written by management consultant Duncan M. Webb. I feel very strongly that post-Minnesota, people who are still talking about Baumol’s Cost Disease in the way that Webb does are doing themselves and the institutions they advise a disservice. So I thought I’d take the chance to think out loud about some of the points he raises…from an audience member’s point of view.

Webb’s entry begins:

I first read Baumol and Bowen’s The Economic Dilemma of the Performing Arts some 20 years ago, almost 30 years after it was first published in 1965. The theory was fairly straightforward: the problem in our sector is that because there are no productivity gains associated with the creation of the work (it takes the same time and energy to rehearse and perform a Brahm’s Requiem today as it did when first performed in 1868), and because costs always increase over time and earned revenue growth is limited by a range of market forces, we are doomed to fall further and further behind, essentially forcing the more aggressive pursuit of contributed income just to balance the budget. And the problem is progressive, meaning that every year we fall a little bit further behind. This phenomenon has come to be known as Baumol’s Cost Disease.

Let’s start at sentence number two. It takes the same time and energy to rehearse “a Brahm’s Requiem” now as it did in 1868?

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Advertising Beethoven’s Crotch

Whenever I need a break from music, I log on to Tumblr, scroll down, and zone out.

Then the other day in the midst of mindless scrolling I saw this.

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Of course I immediately wondered if this was the work of a trickster with too much time on his hands and a grudge to bear against the Dallas Symphony, so I opened a new tab and Googled “dallas symphony beethoven festival brochures.”

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17 Tips On Marketing Orchestras to Millennials

Yesterday I read a slim but interesting book called Marketing for Millennials, by Jeff Fromm and Christie Garton. It verbalized a lot of my gut instincts, and especially the gut instinct that most orchestras suck at marketing to millennials.

Roughly speaking, millennials are carbon-based human life forms aged 18-35. (For a point of reference, I’m 24.) It’s tough to generalize about an entire generation, but I’m about to do so.

Millennials

  • use the Internet a lot
  • tend to be more politically progressive
  • are extremely well-educated
  • value companies with consciences
  • frequently live with our parents thanks to the recession
  • possess larger social networks than any other generation

And here’s an interesting factoid: there are more of us than there are baby boomersYup, you read that right: we’re the largest generation in American history.

You would not know any of these things based on most orchestras’ marketing efforts.

So here, without further ado, are seventeen suggestions for orchestras to keep in mind as they think about how to attract young people.

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Summary of Recent Negotiations at American Orchestras

In light of the great news coming out of Pittsburgh (their orchestra settled their contract A YEAR EARLY!, AND they aren’t facing 30-50% cuts in compensation! yay, Pittsburgh!), I decided a summary of recent contract negotiations at major American orchestras was in order.

The orchestras are listed in order of endowment size (and you’ll definitely notice that toward the bottom of the list, as endowments get smaller, there is more friction and instability at the negotiating table). I focus largely on base salary here, but keep in mind there are many other moving parts to a contract, including working conditions and pensions and all that other fun stuff; however, those are more difficult for an outsider to properly compare and analyze, and I’m not going to write much about them, so go do some homework yourself if you want to learn more about those things.

I also rate each orchestra with my personal opinion as to whether said orchestra recently went through a “market reset” (the Minnesota Orchestral Association’s Orwellian phrase for “foisting massive cuts in compensation onto musicians”).

Endowment figures come from the Minnesota musicians’ website, and are probably a year or two old. If anyone steps forward with comprehensive updated endowment information, I’ll update the list.

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Filed under Labor Disputes, Minnesota Orchestra, The Orchestra Business

Detroit, Minnesota, and Funhouse Mirrors

Will the DSO be Michigan’s next casualty in this recession?

YES, if DSO management and board of trustees have their way.

They believe the DSO cannot survive in its current form and propose to downgrade our orchestra from its world-class stature by drastically reducing the number of musicians and performances, slashing the musicians’ compensation and benefits while imposing draconian working conditions…

We are DSO patrons, donors, subscribers, business owners and community members.

We are people who love great music and also recognize the economic value that this powerful orchestra brings to Detroit and Michigan.

We believe so strongly in preserving the essential character and tradition of this world-class orchestra that we formed the nonprofit group: Save Our Symphony (SOS).

The mission of SOS is to promote and support the world-class artistic excellence and stature of the Detroit Symphony Orchestra and to hold its management and board of trustees accountable for their fiduciary responsibilities to the public trust including the preservation of this great orchestra and its future.

Join us so your voice can be heard: please register your email with us to stay sharp on the latest updates. Thank you for your patience as we establish contact information and build our website.

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A few weeks ago I was contacted by David Assemany, the vice president of Save Our Symphony, the audience advocacy organization that formed in the wake of the crippling 2010-2011 Detroit Symphony strike. He was curious about some figures I’d posted here on SOTL, and he said if I had any questions to contact him. Before I wrote him back, I checked the Save Our Symphony blog to read about that group’s experiences. The first entry was the one you just read.

I couldn’t scroll fast enough. I felt as though I was looking in a funhouse mirror: the reflection wasn’t perfect, but it was certainly recognizable…and it was us. There was a community caught off-guard – a group of citizen activists scrambling to learn how orchestras work – stakeholders who felt ignored, disrespected, and betrayed – musicians leaving in droves – tensions over an expensive building project – accusations that the board cared more about bricks and mortar than souls – theories about capitalism and capitalists run amok – a CEO saying wildly insensitive things – a total breakdown in communication in the triangle of board, musicians, and community. Entry after entry after entry after entry could have been written by Twin Cities music fans. Just replace Minnesota with Michigan, and voila.

It was deeply, deeply unsettling.

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Investment Income Excitement

Let’s pretend you’ve been asked to analyze the investment income of eight corporations. Consequently, eight shiny charts have just been delivered to your desk…

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Before you go any further, scribble down some thoughts, free of any preconceptions you bring to this blog. Who is doing the best? Who is doing the worst? Who is under-performing? Who is over-performing? Who had the best and worst years? Are there any questions you’d like to ask the men and women in charge of these corporations about the investment decisions they’ve made over the last few years?

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Woods Bowman’s Amazing Article on Non-Profit Ethics

Here’s an article called “Nonprofit Accountability and Ethics: Rotting From the Head Down,” by Woods Bowman. I’ve heard snippets here and there since it was posted in October but didn’t actually sit down to read the whole thing until yesterday. This was a mistake on my part. Go read it now – go, go, go.

Here are selected passages and my reactions.

The article starts off:

Arguably, the public holds nonprofits to higher ethical standards than government or businesses. Over 25 percent of Americans report having “a lot” of confidence in charitable organizations compared to 9 percent for government and 7 percent for major corporations,1 but do nonprofits deserve that confidence?

Interest: piqued.

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Filed under Labor Disputes, Minnesota Orchestra, The Orchestra Business