After having narrowly averted a replacement Orchestra here in the Louisville Metro Area, this recent post by Drew McManus, Invasion Of The Job Snatchers?, shows some disturbingly innovative ways that other organizations are using to divert jobs from established local musicians.
Replacement Musicians and Residencies
The Fresno Opera example is little different than the recent case we had down here with our Kentucky Opera during the labor dispute with the musicians of the Louisville Orchestra. Basically the Fresno musicians are on strike (unlike the lockout that had occurred in the Louisville instance) so the Opera has hired replacement musicians to play this Friday’s production of “Show Boat.” Regardless of the reasons for the disputes, the end result is the same–a replacement ensemble has been, or was, hired for the productions.
The Palm Beach Symphony case is a little more insidious, as a proposed residency with Julliard students or recent Julliard graduates will be hired by the Palm Beach Symphony to hold concerts and in-school outreach. Residencies aren’t entirely uncommon. Miami, Florida is home to the Cleveland Orchestra for some parts of the year as it used the residency program as a way to tap into the rich donor base that exists in Florida while the Orchestra struggled back on its home turf. From an economic standpoint, any orchestra that is on tour will have at least a brief ‘residency-like’ period (even if for just a concert) in regions outside of its base of operations. I don’t believe the economic impact of having non-local organizations performing in regions with already established ensembles has been seriously studied, but with more extended residencies on the rise, this might be a fruitful area of research.
Economies of Scale
Much of this also goes back to issues of Scale Economies I’ve talked about in a number of posts here at Mae Mai. By having the ability to livecast concerts in other cities, an organization has effectively used technology to ‘make their venue bigger’ which has always been one of the limiting factors for increasing attendance. Due to technological limitations, a concert venue can only be so large, so the revenue generated by ticket sales would have an upper limit constrained by that absolute technological limitation.
The Sports industry, and some segments of the popular music industry has been doing things like this for years, if not decades. With pay-per-view and licensing through television, these industries have long ago found ways of achieving economies of scale for live broadcasting of their performance events in ways that the classical music industry is only starting to attempt.
Liberation from local Arts Economies
The ‘liberation’ from local arts and artists is one side-effect of all of these kinds of practices. This liberation is a double edged sword. While consumers may now have more options to spend their discretionary and recreation income and time (more on the latter in a bit), this also means that management and presenters also have increasingly more options for cutting their costs. In the end, this will come at the expense of the local arts practitioners in the regions that have more options.
For example, now the the Metropolitan Opera’s HD casts have built some momentum and given them a significant profit ($11 million as of last the end of fiscal year 2011) that organization is now starting to see how it might be coming into direct competition with itself.
Mr. Gelb acknowledged that competition from the HD transmissions may have cannibalized box office sales, particularly from people in nearby cities like Boston, who might have traveled to New York before.
Flanagan and the RAND study have also demonstrated that local arts organizations might show some competitive against each other so livecasting could have increasingly bigger competitive effects with local organizations.
Importing non-local musicians and ensembles, or hiring non-local students, can have a potentially deleterious effect on local Arts Economics and local artists in ways that are structurally similar livecasting can have those effects (I’ll discuss this more in a future post).
In the sub-section, “Social Patterns of Time Use,” of the chapter titled “The Search for Symphony Audiences” in Flanagan’s, The Perilous Life of Symphony Orchestras, the author discusses how adult participation in nearly all leisure activities (i.e. Movies, Sporting Events, Exercise, Playing Sports, Outdoor Activities, Gardening, Volunteer/charity) has declined since at least 1992.
In short, the decline in attendance at classical music concerts (and other arts performances) may reflect broad social shifts in the use of leisure time that have little to do with orchestra policies (or policies of the performing arts industry in general). These patterns are all the more puzzling because they are occurring during a period in which leisure time has increased. (pg. 59)
In the section, “Orchestra Policies: Marketing Activities,” of the same chapter, Flanagan discusses diminishing returns for marketing activities and the issue of time constraints as reported in surveys:
How should one interpret the phenomenon of diminishing returns for marketing expenditures by orchestras? The strongest clue comes from surveys of the reasons for not attending symphony concerts. Many survey respondents mention time constraints as a key factor limiting their concert attendance. Incremental marketing activities cannot relieve the time constraints that prevent even those who are attracted to symphonice music from attending concerts. Instead, the potential for marketing is in developing new audiences, but even here marketing efforts will encounter the growing list of activities, including competition from other performing arts, that compete for the limited leisure time of potential concertgoers. (pp. 50-51)
It should be noted that the Toronto Symphony Orchestra which is doing relatively well has been offering shortened concerts that they specifically market to younger audiences. The TSO has been operating in the black for nearly every year between the start of their tsoundcheck program which was designed specifically to cater to a newer and younger audience, with both reduced ticket pricing as well as briefer concerts. That orchestra has been getting much press for the change in its audience demographic.
Livecasting is also a way to address the time constraint. Movie theaters are more abundant than concert halls, therefore likely to located more closely to potential audiences thus eliminating longer commutes to the a symphony hall for a larger segment of the population. Obviously, the time it would take someone well out of the region of the Metropolitan Opera or LA Philharmonic will save tons of time seeing a local livecast rather than make a long commute (as mentioned by Gelb above) or, as the case may need to be, flight.
If the Classical Music industry were to monetize actual pay-per-view type products or television licensing, thus creating a scale economy, then the decline in live events (which is shown to be happening in the Sports industry as well) might be offset significantly and become just as irrelevant to discussions of operating costs as it is for many Sports organizations which are as just as prone to the Baumol Cost Disease as any other performing organization with a set number of ‘laborers.’
And just maybe management, boards and presenters will stop trying to find innovative ways of cutting costs that harm the musicians who have decided to relocate to their regions.