Monday, February 21, 2011

CLASSICAL MUSIC ECONOMICS: IS THERE A SOLUTION?

American Orchestras: The Sound of Trouble
The Detroit Symphony, which has just emerged from a 34-day musician’s strike, is in such economic straits that it may have to disband.
Detroit Symphony Cancels Season as Musicians Strike
The management of the debt-burdened Detroit Symphony Orchestra canceled the rest of its season on Saturday, after executives and the players failed to resolve a strike that has lasted four and a half months.

Time magazine’s piece over forty years ago described the entire classical music industry as being in mortal peril, and not just in Detroit. Indeed, the death of classical music is a perennial topic, yet somehow orchestras have persevered. Should we be any more worried today than we were in 1969?

Is the Detroit Symphony’s dire situation a one-off phenomenon, or is it part of a larger problem affecting classical music organizations throughout the United States? Clearly, there are extenuating circumstances in Detroit. This once-proud centerpiece for American manufacturing has been in a four-decade economic tailspin. One measure of the decline: its population has fallen from 1.5 million in 1960 (No. 5 in the U.S.) to 900,000 now (No. 11).

Unfortunately, Detroit is not alone as far as its orchestra’s turmoil is concerned.  There are myriad other indications that classical music is in deep trouble financially.  Recent press articles have cited financial issues with a host of other orchestras. Most American orchestras are operating at a deficit – and that’s after philanthropic contributions. Indeed, income earned from ticket sales usually accounts for less than half the operating budget of a musical performing arts organization. Even selling out the house doesn’t solve the problem. Those orchestras lucky enough to have endowments have been eating into them to meet operating expenses. And, unlike European arts organizations, which are heavily subsidized, American groups get essentially zero financial support from federal or local governments.

There are at least two exceptions to this bleak outlook. The Los Angeles Philharmonic and the Boston Symphony have the luxury of owning cash cows that enhance the orchestras’ financial situations. In L.A., it’s the very profitable Hollywood Bowl, and in Boston it’s the highly successful Tanglewood summer festival. But outside of those two orchestras, it’s difficult financial sledding for the other majors, and worse for the smaller organizations.

So how will all this play out?

Well, there is one scenario that could be a harbinger.  It’s not a pretty scenario, but it’s one that has allowed a once-proud but financially strapped orchestra to survive.

In the early 1990s, after six decades of performing, the New Orleans Symphony ran out of money, donors and time. It went bankrupt. In its ashes, the Symphony’s musicians got together and created the Louisiana Philharmonic, the nation’s first musician-owned and –operated orchestra. The musicians run the organization, control the board, hire and fire, raise money, and pay themselves. And therein lies the rub. In order to survive as an orchestra, they pay themselves astonishingly little – an average of $23,000 per year. A little over $10 per hour. Pretty frightening, no?

By contrast, the Detroit Symphony members earned a minimum of $104,000 last year. (That’s a number somewhat below the salaries earned by members of the other major orchestras.) They rejected an offer in the low $80,000s.  Here’s the issue management faced, as reported by the Detroit Free Press this weekend: “The DSO has lost $19 million since 2008, remains in default on the terms of its $54 million in real-estate debt and is rapidly depleting its endowment to cover the red ink.”

There’s no easy answer. The musicians want not just a living wage, but one also reflecting their talent, years of training, and status as being among the elite musicians in the country. Management wants a solution that reflects the exigencies of a virtually bankrupt organization. As the Detroit meltdown illustrates, there’s a wide gulf that separates the two positions.

Now I believe that talented classical musicians are absolutely deserving of  earning far more than most of them are getting around the country, but they’ve run into an economic model that just isn’t able to properly compensate them anymore. And it’s not getting any better. Youth isn’t exactly flocking to classical music as tastes are dumbing down. Schools aren’t helping by cutting arts budgets.  Philanthropy is the only solution, and there are signs it’s stretched pretty far. New young philanthropists have to be developed to replace the ageing ones, but it’s not clear that classical music is attracting new wealth. It’s not a pretty picture.

By the way, we attended a concert Saturday night in New Orleans of the Louisiana Philharmonic, and it was terrific. The orchestra sounded wonderful, conductor  Carlos Miguel Prieto was electric, and the house was packed. There were encores, standing ovations, and even an audience member who mamboed spontaneously (this is New Orleans, after all) as the orchestra played a selection of Leonard Bernstein’s dances. There was a world premiere of Terence Blanchard’s Concerto for Roger Dickerson. And a spectacular performance of Philip Glass’s Violin Concerto No. 2 played by Robert McDuffie, for whom Glass wrote the piece.

The LPO model is one solution. They produce a fine product, one that an audience appreciates and relates to. But it’s a draconian solution that requires that the musicians provide the subsidy. Somehow, that doesn’t seem fair.

Solving the economic problem of classical music is not easy. If it were, someone would have figured it out already. Perhaps fresh thinking is required.

Any thoughts?

28 comments:

  1. Hi, Ben -
    Part of the problem lies in the sorry state of our secondary education system, which no longer seems to have the wherewithal to support classical music education to the tune required. No wonder the symphonies are on a kind of Baton Death March.

    Sadly, the same is true of classical radio stations. A signal example is KDFC here in the San Francisco bay area, which, as of two weeks ago, was forced to go listener-supported, and is, at least for now, without an antenna in the Silicon Valley area.

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  2. When it looked like our world might come to an end in New Orleans, we decided we couldn't recover without music! We're living out that notion now and succeeding with a great deal of growth from all kinds of concerts in New Orleans and the surrounding communities. People come and they connect. But the traditional model around philanthropy as the primary financial resource supporting orchestras is challenged to keep up. We need additional revenue streams.
    The average person pays more for a cell phone every year. Has the sense of "value" been co-opted more effectively by technology? Or do we need to co-opt technology and consider a business model that has very broad reach for music through technology...and maybe it's not about one orchestra/one city. Maybe the broad reach is many orchestras sharing the technology along with the art and the market (the consumer's choice: this week hearing something from New York, the next week from New Orleans, the next week from Detroit, etc.). Maybe only the home-grown people have access to live concerts. Me, I can't visit all these orchestras, but maybe my cell phone could take me there for a fee.

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  3. A MET-HD format for a symphony orchestra. Can be spread on a delayed basis to schools also, as well as other cities lacking an orchestra.

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  4. You mention in your original post the name Roger Dickerson. Roger is one of the true angels of music residing in New Orleans. He has mentored so many of the musicians and composers who grew up or reside there. One of the greatest lessons Roger taught me (a composition student of his some 33 years ago) was that one of the greatest challenges every composer faces is finding their way in a profession with no clear path. If you pursue law or medicine, the path to success is quite a bit clearer. However, for composers we must find our own way. Also, this is one of the greatest joys to being a composer, we get to walk our own way. We are not stuck by a singular pathway. All we really need to do is to prove to our fellow citizens why the culture needs us.

    I would substitute the words "classical music" for composer in his lesson, and to me, we have the direction to move towards. Too often, we in music have not taken the the time to understand how to best work inside of the culture in which we live. Every community has a place for music, of all genres. Surely classical musicians can find their way as well. This is not to excuse the non-musician from taking part as well in a cultural journey. Sports have attracted the non-athelete as well as garnered enormous financial support form politicians in the form of subsidies. Their so-called free market, functions not only with subsidies, but, in the case of football, careful control of how limited the rewards are for winning. The number one team always picks last in the next draft, the worst picks first.

    Certainly, if sports can find its way to the top, so can we in music.

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  5. Economics is a brutal science. Economists talk about how employment is 'trending' rather than how painful it is for Joe, who is out of work right now. Economists are important, however, because we need to know what we are up against over the long run and what possible options may exist to 'bend trends' (shorten all the 'Joes' unemployment.)

    I wonder how Economists are trending our traditional arts-and-culture delivery systems right now. So many of us are feeling like 'Joe', but from the outside I think we may look like businesses with a growing admin structure, but without even the goal of financial independence. As a member of this arts delivery system (by passion,business, board membership, etc,) I hope our brightest arts economists and visionaries are rethinking our delivery system paradigms. I can't help but think we need to find ways to bend our trend....fast!

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  6. Please have a thorough read of the musicians' website ... this strike is about much more than finances ... it is about resisting the management's desire to deconstruct the DSO and force musicians to play for as little as possible. If they actually succeed in hiring a "new" orchestra to take the DSO's place they will be severely damaging the musicians' union and the future for all orchestral musicians in this country. The LPO in New Orleans was formed out of necessity not choice and continues to struggle to pay its musicians a salary that can actually constitute a living. If the LPO was to become a model for American orchestras then classical music will have a very bleak future in this country.

    PLEASE read the DSO musicians website :
    http://detroitsymphonymusicians.org/index.html

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  7. Clearly these organizations must support themselves principally through contributions rather than ticket sales. However, it starts with ticket sales. The Boston Pops and Tanglewood took off when Serge Koussevitsky was the local star. The New York Philharmonic took off when Leonard Bernstein joined as music director. The LA Philharmonic is having a resurgence with Gustavo Dudamel. Stars sell tickets -- and attract new board members and big donors. People want to play with a winner.

    Ken Roman

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  8. There are too many professional symphony orchestras in this country. Orchestras used to tour a lot more. The musicians union has killed that for the major orchestras. There should be about a dozen top-notch orchestras that get paid top money and tour regionally and constantly. Obviously, that puts hundreds of professional musicians out of work. But until we recognize the value of the arts in this country, that's the solution.

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  9. It's time to stop blaming unions for the ills of this country and specifically the musicians' union (AFM) for what's wrong with the orchestral business. There is no orchestra players' contract that is not negotiated by an orchestra committee elected by the players, ratified by the players and aided by the Union. Touring actually costs more money and requires sponsors and presenters to pony up the additional support. Touring "regionally and constantly" doesn't add up to much home life for those who would have to do it. It's unfortunate that musicians should have to pay the price for a lack of cultural awareness, education and support in this country.

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  10. Orchestras are, always have been, and always will be paid for on the dime of philanthropists. It has been that way since the time of kings and courts, and it always will be. Managements might not be able to afford the salaries they pay to musicians the in the top orchestras anymore, but that is mostly due to the economy. Remember that these same managements agreed to these contracts in the first place - they clearly thought they could afford to invest more in their musicians. But no one saw the recession coming, and then managements realized they tried to grow too fast. Now people talk of "new models" being needed, but what they propose isn't really radically different from funding structures of the past.

    Boards and donors need to decide for themselves what quality of orchestra they want in their community, what kinds of programs they want that institution to focus on, and then pony up the $$ to get it. If the money isn't coming in, then the priorities of the institution may not match the priorities of the donors.

    Music education in the schools has fallen drastically in the last 30 years. Orchestras should have been picking up the slack, but sadly, most of them have failed to do this to the extent it needed to. Perhaps they didn't think it was their place to do so, but I think bold action in this area is needed by most orchestras.

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  11. Ben,

    You should read Matthew Guerrieri's blog post from a couple weeks ago about the Economic impact of arts funding. It makes a compelling case for more nationalized funding for all arts because it results in almost 3 jobs per $100,000 spent.

    Here is the URL: http://sohothedog.blogspot.com/2011/02/just-asking.html

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  12. Economics is not a brutal science, it's a pragmatic one. Artists don't like pragmatism, economists don't like 'arty' solutions. I am both an economist and a classical music fanatic and have often been shocked by the total disconnect between the two worlds, ie when I go to a concert or talk to my arty friends, I switch the economic part of my brain off to have a nice evening and keep my friends.

    We definitely have to think about a viable model for classical music. There has never been one, just lots of heads stuck in the sand and the occasional public subsidy (if you are in Europe) or donors (if you are in the US).

    Classical music has particular problems that other arts form don't quite have or don't have in such an acute form: (i) you have to practice a lot, which requires time, which in turn requires not having to worry about how to pay the bills; (ii) we are not as popular as most other genres and, apart from a couple of stars many of you mentioned, we have difficulties covering our costs, which in turn are higher than in many other genres; (iii) we keep struggling to attract young, diverse and underprivileged audiences which in turn makes it difficult to get public support; (iv) we keep struggling to make audience fall in love with our modern output which in turn makes our discipline stale and conservationist in comparison with other genres and art forms; (v) we don't offer local communities the same benefits as a local boxing club for troubled youth so can't really reasonably ask for public subsidies; (vi) we tend to think that our genre is better than others and that we have a God given right for support which clouds our judgement and alienates outsiders.

    Just take all these issues one at a time and think what can be done under each of them and you will find a solution eventually.

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  13. Thanks for the interesting post and engaging comments.

    Responding to Jay Weigel, one solution is to train future musicians with entrepreneurship skills. Organizations like Arts Enterprise (www.artsenterprise.com) and its many campus chapters or the new NEC musical entrepreneurship department are taking this approach and this could be expanded.

    I also wonder if the large unemployed / underemployed labor pool of professional musicians can be tapped to fill the void in public arts education. Certainly full-time music teachers in the schools are preferred, but where that is not happening maybe underemployed musicians could fill the gap as part-time instructors. Certainly playing with the Louisiana symphony would be a more viable job if it's musicians had additional work teaching. Historically, the notion of a professional musician working with a single organization is both rare and precarious. A broad entrepreneurial approach to the work of musicians has more strength and possibility.

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  14. Economics is actually known as the "dismal science" by economists.

    To members of symphony orchestras: the Detroit fiasco is a Oscar nominated horror film coming to a theater near you. I don't care if you are in Boston or Boise (actually, they may have killed that one already)

    I don't say this lightly-I'm a member of one.

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  15. usmusicscholar - It's interesting to hear what you said about musicians taking other jobs or working part-time as instructors. This is how many of them get by in the UK. If you look at any of the four London orchestras you will see that many of its members are professors at eminent universities and music schools in the city. The problem is that extra-musical activities eat into the rehearsal time of the orchestra which means that they cannot achieve as good a sound. Orchestras can get by doing this, but they struggle to get in the league of the Berlin Philharmonic irrespective of how good their individual players are.

    This is a sore (I mean very sore) point with British orchestra players. There was recently quite a vicious debate on this topic in the media following the Detroit strike. Sadly, most of the musicians participating in the debate simply said: "Give us more money in public subsidy. It's totally unfair that orchestras in Continental Europe should get so much more than us." This sort of thing goes down very badly with the rest of the population at the time when so many people are losing jobs and social services are being cut for the poorest and given that most of music goers are better of than the average citizen. The result is that public subsidies have been cut and ticket prices went up. It made no difference to the ticket sales of Dudamel's Venezuelans (sold out), but the sales of other concerts are slower. There is a fundamental problem that a generally well-to-do classical music fan isn't prepared to pay as much for a concert ticket as a poor sod is prepared to pay for a football game.

    Interesting to listen to the 12:31 PM anonymous too. That's precisely the kind of mild abuse that I generally get when discussing economics with musicians. I don't mind, it won't stop Earth going round, two plus two being five and laws of economics applying. It won't help musicians though. By the way, a quick check on Wikipedia will tell you who and why coined the term 'dismal science'. It wasn't an economist but a historian supporting slavery as a morally superior option over economists' idea of demand and supply. I leave you to judge this one ...

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  16. I meant two plus two not being five of course :-) (Now, that would not a bad joke at the expense of economists, we generally can't do simple sums)

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  17. 'If they actually succeed in hiring a "new" orchestra to take the DSO's place they will be severely damaging the musicians' union and the future for all orchestral musicians in this country.'

    It would seem that the future of the musical culture--as in, live classical music as an integral part of the culture, should matter more than the future of the American Federation of Musicians.

    But, then again, so many unionized musicians have lulled themselves into the belief that those orchestra boards, and all that donated money, exist for them! The orchestras exist to serve the community, not the other way around.

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  18. Old South--

    I have to say that I very much agree with your comment. I appreciate and am inspired by the work musicians do and the art they create, but the problems facing the orchestra run deeper than the union vs. management rhetoric that continues to weaken the industry, at least in the eyes of potential audience members. I absolutely think there are some things orchestras can do to update their current operating model and adapt to the contemporary cultural environment, but it will require all parties to be more flexible and open minded. My current dissertation research deals with this very issue, so i'm especially interested to hear some other thoughts on this.

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  19. Is classical music relevant to the rock music we listen to today?

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  20. Is classical music relevant to the rock music we listen to today?

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  21. As a young opera singer, and son of a classical violinist, this is a topic which I have personal experience with and which I've thought about a great deal. Unfortunately, I see a quandary with no easy solution. The breadth and depth of the problem is far more than simply economic -- it's cultural. Money goes where money is made, and that means you need consumers to buy the product. The consumer base for classical music, and high culture in general, has been eroded by popular music and television in particular, which has overwhelmingly convinced the public that visually attractive but ultimately vapid and empty programming is more worthwhile than an investment of several hours into a musical presentation that requires the use of one's mental faculties as well as a deep connection to one's emotions.

    Twenty years ago, you might have seen Pavarotti or Domingo sing on The Tonight Show with Johnny Carson. Today, you won't see a single opera singer. If you do, it will be someone like Paul Potts or Charlotte Church. In the 50s, the arrival in New York of a Callas or Tebaldi by trans-Atlantic ship would sell newspapers, because they were the biggest superstars of the day. Would the New York Times find such a thing today "news that's fit to print?" At the turn of the 20th century, Caruso enjoyed the kind of celebrity we now bestow upon the likes of Brittney Spears, and for far more prurient reasons I might add. Van Kliburn was an international star, celebrated by many, as were Heifetz, Horowitz, Stokowski, and literally dozens of others. Their performances, and the classical music repertoire, was even used in popular cartoons of the day like Loony Toons. All that is gone.

    So what's the answer? It lies in our values. What we teach our kids. What we as a society deem important, not just with our words, but with our deeds. If we spent half as much energy and resources teaching kids to value music as the Reagan administration spent on educating kids against drug use, or the Christian coalition has spent on things like school prayer, teaching abstinence, or intelligent design, we might see some change. This is a MUCH harder problem that just figuring out how an orchestra survives. It will take a sea-change in what our society finds valuable enough to put resources into at the educational level. Public schools with music classes for kindergarteners on up. Music and art classes as a requirement rather than an elective. Not until we put music in our schools at the same level of importance as foreign language or science will you see any substantial change to the business realities of the American orchestra.

    Here again, we have a problem. Musical instruction is expensive. Music programs get cut before sports in most high schools, because we as a culture tend to prize performance on the football field a bit (a lot) more than performance in the orchestra pit or on the choir riser. And universities contribute to the problem indirectly. In most universities, the cost of resource intensive programs such as music are subsidized in large part by the revenue generated by their sports programs. This is why many of the strongest college music programs are at schools that also happen to have a great sports team or two. So college recruiters need that next football or basketball star. They don't go to the high school orchestra concert and recruit the next great violin soloist.

    So, when looking to the solution to this problem, we all need look no further than our reflection in the mirror each morning. When we all find it important enough to save, and even prioritize, then perhaps we will see a change. Philanthropy is great, but it's the vast middle class that wields the real economic power -- and it will take a cultural revolution of sorts to get the middle class to re-assess where they put their money.

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  22. What music followed the classical period but precluded more modern genres such as blues, jazz and country?

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