An alternative view of Orchestral Musician Compensation according to Flanagan

So we’re often told that orchestras run deficits.  Sure, ok–but how often do we hear that orchestras in countries with a higher level of subsidies actually run bigger performance deficits?  Here’s what Flanagan says:

Symphony orchestra bankruptcies, an unwelcome feature of the U.S. classical music scene, are essentially unheard of abroad, although foreign orchestras are no more likely to cover their expenses with earned income than U.S. orchestras.  In fact, most foreign orchestras report larger performance deficits. (Flanagan 2012, pg. 145)

And also this:

The evidence that U.S. orchestras generally report smaller performance deficits than orchestras in most foreign countries may surprise some readers.  At the least, it signals possible moral hazard in countries that subsidize the arts substantially. (Flanagan 2012, pg. 155)

What if there’s really no “decline” in Classical Music audiences?

So a few weeks ago I was playing around with numbers, namely I was playing around with the numbers given by various surveys regarding arts participation as well as population.  Keep in mind that data are simply the raw numbers you work with while statistics (or statistical methods) is (are) the interpretation of the raw numbers.

The NEA (2009) released some figures from its Survery of Public Participation in the Arts for 2008 as well as the preceding 10 year intervals of the survey (which began in 1982).  Note that the sample is relatively large (18,000) so extrapolation from the sample size to the whole of the population isn’t especially problematic–at least in many ways but more on this later.  Given that, then for the four years with data we have:

• 1982 – 13.0% = 21.3 million
• 1992 – 12.5% = 23.2 million
• 2002 – 11.6% = 23.8 million
• 2008 – 9.3% = 20.9 million

where the percentage and following number is the adults attending at least one classical music concert during the previous year.

Outdated Knowledge and Music

Portable music trumps any live or "pre-recorded" event!

Earlier today, I gave one of my students a CD of a number tracks from my various music ensembles (at her request).  Her immediate response (after thanking me) was to ask me if I would like the CD–which was simply a burn of live tracks–back.

Her rationale was that she would be putting it in her Ipod (after which she told me how many thousands of tunes she has digitally–after the addition of mine)–the implication of which was that she would no longer need a copy of the burned CD  I gave her.

Diversity and the Arts: The Portland Initiative

Me (right) drumming for the Greek Musicians at the Indy Greek Festival (Sept. 2010). Indianapolis ranks 8th in the 40 largest metro areas in the U.S. with a percentage of a white population.

Joe Patti and Drew McManus post about Portland’s new diversity goals and they (as well as commenters) bring up a ton of controversial issues regarding the implementation of such an initiative.  In my Portland is where young people go to retire post, I mentioned some problems with the idea of giving arts organizations superficial facelifts that seems to coincidentally come on the tail end of Richard Florida’s influential ideas regarding his Creative Class and the types of environments that purportedly draw these budding [and younger] entrepreneurial types to various regions (including Portland).

The problem is, as I mention in my post, most of those regions that Florida ranks high on his metric for economic growth seem to be doing poorly.  Funding the amenities that draw in the Creative Class just hasn’t seemed to be enough to actually promote economic prosperity.  Another side effect of the effort to attract this kind of demographic is particularly relevant to the diversity issue.  Creating an attractive environment for the Creative Class is making many of the neighborhoods far too expensive for young families:

Portland is one of the nation’s top draws for the kind of educated, self-starting urbanites that midsize cities are competing to attract. But as these cities are remodeled to match the tastes of people living well in neighborhoods that were nearly abandoned a generation ago, they are struggling to hold on to enough children to keep schools running and parks alive with young voices.

…

Officials say that the very things that attract people who revitalize a city – dense vertical housing, fashionable restaurants and shops and mass transit that makes a car unnecessary – are driving out children by making the neighborhoods too expensive for young families.

Perspective: The Grammy Awards

The award given on a show that has a viewership of less than .1 percent of the world's population.

So, Greg Sandow says the Classical Grammys don’t matter.  Ok, but my retort is that on the whole, the Grammys don’t matter.

Let’s put aside the issue that the Grammys are an awards ceremony for the American Recording Industry, which, on the whole, is a tiny blip on the recording industries in the world.

The 2012 Grammys were viewed by 46 million–a record breaking viewership (note that approximately 82 million watched the event at least in part).

The U.S. population is approximately 313 million, so 46 million viewers is (rounded up to the nearest percent) approximately 15 percent of the U.S. population.  The population of the world is approximately 6.996 billion.  So the viewership of the Grammys is less than .1 percent (.006) of the world’s population.

Less than .1 percent of the worlds population watched the U.S. Grammys.  Sandow states (on his facebook page) ‎”The Grammys don’t resonate — even though forty million people watched? That’s an extraordinary notion.“  Well, at .1 percent viewership, it would be an extraordinary notion to say the Grammys resonate!

Economies of Scale and Orchestras

As quantity of production increases from Q to Q2, the average cost of each unit decreases from C to C1

A recent post by Drew McManus at Adaptistration reminded me of a brief argument I had with Greg Sandow at his blog.  In my previous post I talked about one way to increase performance or earned revenue through Price Discrimination for Orchestra Tickets.  Another way to increase performance revenue as well as lower costs is by changing the scale of the operations.

This is commonly referred to as Economies of Scale, and no, this has nothing to do with reducing pay or cutting back a season to lower costs.  The reduced costs comes about as the result of increased production, thus lowering cost per unit.  As the Investopedia defines it:

The increase in efficiency of production as the number of goods being produced increases. Typically, a company that achieves economies of scale lowers the average cost per unit through increased production since fixed costs are shared over an increased number of goods.

Price Discrimination for Orchestra Tickets

One of the benefits from being the composer for a production is the comp tickets! These were from Chicago's Commedia Beauregard's production of "A Klingon Christmas Carol" winter 2011

Drew McManus (of Adaptistration.com)had a fascinating post about Placebo Pricing (also see his follow-up post) that was the subject of a blogpost by Joe Patti (of Butts in The Seats) which might be a technique that could be used by Orchestras to generate more ticket sales.  Lisa Hirsh has been blogging up a storm about some of the issues of ticket pricing from the audience standpoint.

Back in 2004, McManus reported on a new pricing strategy being used by the Toronto Symphony Orchestra and the Nashville Symphony in their tsoundcheck and Sound Check programs.  Simply put, the programs offerred a lower ticket price for folks under 30.  While I’ve not heard much about how the Nashville program has worked (or even if it is still in place), there has been much news and blogging about the young age of the TSO’s audience.  There has even been some wonderful audience testimonies–see this one at McManus’ follow up (again, in 2004) to the above post, and this recent comment at Greg Sandow’s blog.

The lingering question to all this reduced pricing for tickets issue is, as McManus states in his Placebo Pricing post: “In the end, the devil is certainly in the details; not the least of which being what to do about reduced earned income from lower ticket revenue” and as Sandow states in his recent post about the TSO: “Some classical music institutions attract a young audience by lowering ticket prices, but then they need funding to offset the loss from selling tickets at a cheaper price” and even I’ve said as much over at Eric Edberg’s blog: “And in the end, since these tickets are actually cheaper, that means pound for pound it will take more of these tickets to make the difference from a normal subscriber or ticket buyer at standard prices.“