Liberating yourself from the local musician economy, or, innovative ways to replace your local musicians

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.

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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.

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the economics of underserved audiences (part 3): Baumol’s Curse and Liberation from Local Arts Organizations

William J. Baumol and William G. Bowen first described what is sometimes called Baumol’s cost disease in the Performing Arts in 1966.  The gist of the cost disease (which is just as applicable to sports, hospitals, and other fields where human labor cannot be replaced) is that all things considered, the labor cost in the Performance Arts will always rise at a faster rate than other industries and inflation since there are no effective means for increasing productivity since there is no way to replace human labor.  A Haydn string quartet needs four musicians today as it did in Haydn’s time.  Or as Baumol and Bowen put it

Human ingenuity has devised ways to reduce the labor necessary to produce an automobile, but no one has yet succeeded in decreasing the human effort expended at a live performance of a 45-minute Schubert quartet much below a total of three man-hours.

In the US, Orchestras are not publicly funded as they are in Europe, and rely heavily on the audience and donors (roughly a 40% and 60% amount respectively).  Ticket sales will never cut it; especially the larger the ensemble gets.  Even if an Orchestra were able to sell out each and every concert, the sales generated by the audience isn’t enough to cover the ever increasing cost of operations so a donor base is in many ways more important for these organizations.  With the current lag in both audiences and donor base, however, being able to fill the auditorium can go a long way towards showing some measure of relevancy to those with discretionary philanthropic money to give.

While mass media may be able to generate revenue some (but not enough) extra revenue (Dempster, 2000; Guerrieri, 2007) in digital media seems to be having a more pronounced effect (Sheridan, 2009; Midgette, 2011; Trescott, 2011).  With the ability to livecast being a more viable option for actually being able to increase the audience for live events there may be ways of using technology to expand the market for what was sets of individual fixed events (what the NEA surveys list as “Benchmark events”) in limited quantities (e.g. number of seats in an auditorium).

As it’s been a bit since I’ve posted in this series of the economic of underserved audiences, much of the above is an elaboration of the previous installment.  But the pattern of usage via new media technologies has been studied in a different context regarding ethnic populations.  Again, I turn to Waldfogel’s “The Tyranny of the Market: Why You Can’t Always Get What You Want” (2007).

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The death of the cinematic industry…

The Met’s “Die Walküre” by Richard Wagner, now showing at your local movie theatre!

So the last movie I went to, Thor, I was intrigued to see a table with fliers for a couple of upcoming “special events.”

The two fliers were slick promos for upcoming (one now past) live HD cast performances by the Metropolitan Opera and the Los Angeles Philharmonic.

Look at that blurb in the top left hand corner of the first link – “Movie theaters aren’t just for the movies anymore.”  The big blurb in the middle column says:

GREAT ESCAPE THEATRES IS EXCITED TO BRING MORE THAN MOVIES TO OUR THEATRES!

Programming for everyone, and we mean everyone – from opera, sports, and comedy to original programming feature the biggest names in radio and television – with all of it containing exclusive content you won’t find anywhere else.  Special event features like behind-the-scenes footage and backstage interviews.  Big screens with high-definition picture and big-time surround sound with the best seats in the house and close-up view unlike any other.

For all the folks who continue to maintain the popularity of pop culture–in conjunction with the the supposed decline of high culture (Classical Music)–it’s a bit ironic that movie theaters are now showing live casts of, well, classical music.

The Met has been doing this for some time now, one of my friends and wonderful bellydancer, Sara Jo Slate, had the opportunity to teach Renée Fleming some moves and do choreography for the Gala show of the Met in ’08 (Thaïs) which I had to miss for various reasons (both the live opening as well as the livecast).  It was back then that the idea of live casting productions peaked my interest.

Now the LA Phil is getting in on the act.  With their new star power in the young Venezuelan conductor, Gustavo Dudamel, who first shook the Classical Music world when he toured the Venezuelan Orquesta Sinfónica Simón Bolívar (Simón Bolívar Youth Orchestra).  Both he and the Orchestra are products of the Venezuelan, El Sistema, which has forcedsome of us to question how [little] we fund our Orchestras in the states given the wild success of the Venezuelan system.  The Berlin Philharmonic has also been broadcasting its concerts live for some time now with its Digital Concert Hall though I’m not sure how that fits into Movie Theaters as I believe this is for webcasting and/or live Television.