A profile of the performing arts industry culture and commerce

A Profile of the Performing Arts Industry EBOOKS FOR BUSINESS STUDENTS David H Gaylin POLICIES BUILT BY LIBRARIANS • Unlimited simultaneous usage • Unrestricted downloading and printing • Perpetual access for a one-time fee • No platform or maintenance fees • Free MARC records • No license to execute The Digital Libraries are a comprehensive, cost-effective way to deliver practical treatments of important business issues to every student and faculty member For further information, a free trial, or to order, contact:  sales@businessexpertpress.com www.businessexpertpress.com/librarians Industry Profiles Collection Donald N Stengel, Editor Culture and Commerce Attending a live concert or theatrical performance can be a thrilling experience At their best, the performing arts represent the height of human creativity and ­expression But the presentation on stage, whether it is Shakespeare, Beethoven, or The Lion King, depends on a business ­backstage This book provides an overview of both the product on stage and the industry that makes it possible While the i­ndustry’s product is unique—with unique supply and ­ demand characteristics—it is still an industry, with economic inputs, organization structures, competitors, ­ business ­ models, value chains, and customers We will examine each of the major segments (Broadway, regional theater, orchestra, opera, and dance) along these business dimensions This book will give lovers of the performing arts an ­nderstanding of the business realities that make live u performances possible Managers, board members, and ­ performers will be better equipped to take on the ­strategic challenges their companies face People contemplating any of these roles will have a better idea of what to expect Business analysts and students of strategy will discover ­ how economic frameworks apply in this unique setting where culture and commerce converge David H Gaylin is an expert in arts management, business strategy, and executive development He is a ­ managing director of Con Brio Consulting LLC, a management-­ ­ consulting firm, and combines a 25-year career in corporate strategy and development with eight years of CEO-level arts management experience Gaylin earned his AB degree from Harvard College and MBA from Harvard Business School An active clarinetist, his music study includes a Master’s degree in conducting from the New England Conservatory of Music He has written for the Wall Street Journal, Management Review, Journal of Business Strategy, Human Resources Professional, and other publications Industry Profiles Collection Donald N Stengel, Editor ISBN: 978-1-60649-564-3 A PROFILE OF THE PERFORMING ARTS INDUSTRY Curriculum-oriented, borndigital books for advanced business students, written by academic thought leaders who translate realworld business experience into course readings and reference materials for students expecting to tackle management and leadership challenges during their professional careers GAYLIN THE BUSINESS EXPERT PRESS DIGITAL LIBRARIES A Profile of the Performing Arts Industry Culture and Commerce David H Gaylin A Profile of the Performing Arts Industry A Profile of the Performing Arts Industry Culture and Commerce David H Gaylin A Profile of the Performing Arts Industry: Culture and Commerce Copyright © Business Expert Press, LLC, 2016 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopy, recording, or any other except for brief quotations, not to exceed 400 words, without the prior permission of the publisher First published in 2016 by Business Expert Press, LLC 222 East 46th Street, New York, NY 10017 www.businessexpertpress.com ISBN-13: 978-1-60649-564-3 (paperback) ISBN-13: 978-1-60649-565-0 (e-book) Business Expert Press Industry Profiles Collection Collection ISSN: 2331-0065 (print) Collection ISSN: 2331-0073 (electronic) Cover and interior design by Exeter Premedia Services Private Ltd., Chennai, India First edition: 2016 10 Printed in the United States of America Abstract Attending a live concert or theatrical performance can be a thrilling ­experience At their best, the performing arts represent the height of human creativity and expression But the presentation on stage, whether it is Shakespeare, Beethoven, or The Lion King, depends on a business backstage A Profile of the Performing Arts Industry provides an overview of both the product on stage and the industry that makes it possible While the industry’s product is unique—with unique supply and demand ­characteristics—it is still an industry, with economic inputs, organization structures, competitors, business models, value chains, and customers We will examine each of the major segments (Broadway, regional theater, orchestra, opera, and dance) along these business dimensions The challenges facing the performing arts industry in America are well known Many companies struggle to survive, and there have been some high-profile bankruptcies Participation rates are falling, audiences are aging faster than the general population, season ticket sales are in decline, and gift-giving levels are hard to sustain in today’s economy The value of the arts and arts education are in question, and both have largely disappeared from public policy agendas Yet there are bright spots Some companies are thriving, enjoying s­old-out performances, extended runs, and healthy balance sheets The  Metropolitan Opera’s Live in HD series continues to be widely successful Some Broadway productions have turned into global, ­ billion-dollar businesses Admission to professional schools of the ­performing arts is more competitive than ever, and the caliber of ­graduates is ­astonishingly high At the nonprofessional level, there is no shortage of community productions across all genres and geographies Why some companies struggle and some thrive? Despite trends that appear uncontrollable, management decisions have a huge impact on economic outcomes This book examines the range of product, market, and resource choices available to performing arts managers and provides practical examples in key areas such as programming, venues, performer relations, marketing, and fund-raising vi ABSTRACT Three features of the book are a historical perspective, broad industry coverage, and data-driven analysis Today’s business models and performance practices were largely developed in the 19th and early 20th ­centuries Sound strategy requires an understanding of the status quo We therefore have chapters on the historical evolution of the artistic ­disciplines and the industry’s development in America, as well as more recent trends and initiatives Broad industry coverage allows the reader to compare developments across genres In practice, genres tend to be siloed (e.g., theater people keep to theater), but there are learnings to be shared While the focus is on the traditional arts, we also look at developments in live entertainment and popular culture more generally Data-driven analysis provides a fact base for comparative and longitudinal insights—for example, regarding the performing arts versus other industries, long-term trends in revenues and costs, the bargaining power of labor unions, and the impact of new technologies, including the Internet and social media This book will give lovers of the performing arts an understanding of the business realities that make live performances possible Managers, board members, and performers will be better equipped to take on the strategic challenges their companies face People contemplating any of these roles will have a better idea of what to expect Business analysts and students of strategy will discover how economic frameworks apply in this unique setting where culture and commerce converge Keywords arts management, Actors’ Equity, ballet, Broadway, classical music, dance, Metropolitan Opera, musicians union, nonprofit management, opera, orchestra, performing arts, theater Contents Chapter Introduction���������������������������������������������������������������������1 Chapter Defining the Arts and the Industry���������������������������������13 Chapter 3 Historical Background on the Performing Arts Disciplines���������������������������������������������������������������29 Chapter The Industry’s Development in America�������������������������47 Chapter Industry Size, Structure, and Value Chain�����������������������79 Chapter Performing Artists and Their Unions����������������������������107 Chapter Theater, Orchestra, Opera, and Dance Companies�������143 Chapter Audiences and Tastes����������������������������������������������������197 Chapter Managing Performing Arts Companies�������������������������221 Notes ������������������������������������������������������������������������������������������������243 References�������������������������������������������������������������������������������������������269 Index�������������������������������������������������������������������������������������������������275 CHAPTER Introduction The performing arts include music, theater, and dance, and reflect some of humankind’s most essential activities The format was set in ancient times—live performers, a space to perform in, and a live audience Indeed, the arts predate civilization Archeologists have found flutes made of mammoth ivory and bear bone that are 42,000 years old, with carefully carved finger holes and mouthpieces The earliest cave drawings are equally old By comparison, farming and domestic animals did not appear until about 10000 BC and writing not until 3000 BC Some anthropologists even hypothesize that language began as a mixture of singing and speaking Miraculously, our Paleolithic art evolved into the works of Sophocles and Shakespeare, Bach, Beethoven, and Balanchine It is one of civilization’s great achievements and transcends its cultural origins Shakespeare is by far the world’s most produced playwright, in both English and translation Tokyo has more professional orchestras (eight!) than any other city China reportedly has 50 million piano students, and there are opera houses in Bangkok, Hanoi, Kuala Lumpur, and Ulan Bator The uniquely American inventions of jazz, modern dance, and the Broadway musical likewise can be seen and heard around the world The performing arts that developed from Western culture have demonstrated close to universal appeal and staying power.1 The industry that sustains it, however, is in transition Turbulent Times: Winners and Losers Spending on live entertainment in America was almost $29 billion in 2013 According to government statistics, it has been the fastest-growing form of recreation since 2005 and one of the fastest-growing segments of the entire economy But growth has been uneven Pop-rock concerts References 271 Giving USA Foundation 2014 Giving USA http://www.philanthropy.iupui edu/news/article/giving-usa-2014 Grant, M., and H.S Hettinger 1940 America’s Symphony Orchestras and How They Are Supported New York: W.W Norton Harris Interactive Press December 4, 2008 Leisure Time Plummets 20% in 2008 Rochester, NY http://www.harrisinteractive.com/vault/HarrisInteractive-Poll-Research-Time-and-Leisure-2008-12.pdf Harris Interactive Press December 9, 2013 We Work Before We Play New York http://www.harrisinteractive.com/NewsRoom/HarrisPolls/tabid/447/ ctl/ReadCustom%20Default/mid/1508/ArticleId/1345/Default.aspx Healy, P August 7, 2011 “Downsizing ‘Rent’ for a New Run.” New York Times http://www.nytimes.com/2011/08/08/theater/rent-is-to-open-off-broadwayat-new-world-stages.html Healy, P August 1, 2013 “Like the Movie, Only Different: Hollywood’s Big Bet on Broadway Adaptations.” The New York Times http://www.nytimes com/2013/08/04/movies/hollywoods-big-bet-on-broadway-adaptations html Jepson, B October 10, 2012 “Can These Philadelphians be Fabulous Again?” The Wall Street Journal http://www.wsj.com/articles/SB1000087239639044 3635404578036890677495144 Kaiser, M.M., and P.S Engler 1995 Strategic Planning in the Arts: A Practical Guide NY: Kaiser/Engler Group www.artsmanager.org Kane, M., and S Gogliormella May 30, 2007 “Legitimate Theater’ Incentives Promote Broadway Theater District Preservation.” New York Law Journal http://www.newyorklawjournal.com/id=900005482294/LegitimateTheater?slreturn=20150621005816 Kennicott, P August 25, 2013 “America’s Orchestras Are in Crisis: How an Effort to Popularize Classical Music Undermines What Makes Orchestras Great.” The New Republic http://www.newrepublic.com/article/114221/ orchestras-crisis-outreach-ruining-them Kristeller, P October 1951 “The Modern System of the Arts: A Study in the History of Aesthetics.” Journal of the History of Ideas 13, no http:// www.compilerpress.ca/Competitiveness/Anno/Anno%20Krislteler%20 Modern%201.htm Krueger, A.B June 12, 2013 “Land of Hope and Dreams: Rock and Roll, Economics and Rebuilding the Middle Class.” Cleveland, Ohio https:// www.whitehouse.gov/sites/default/files/docs/hope_and_dreams_-_final.pdf Kushner, R.J., and R Cohen 2013 National Arts Index 2013: An Annual Measure of the Vitality of Arts and Culture in the United States: 2000– 2011 Americans for the Arts http://www.artsindexusa.org/wp-content/ uploads/2013/09/2013-NAI-Full-Report.pdf 272 References Las Vegas Shows 2010 “Theater Business Costs & Earnings – How Much it Costs to Put on a Show Infographic.” www.bestshowticketslasvegas.com/ TheaterBusiness.asp League of American Orchestras December 10, 2009 Audience Demographic Research Review http://www.americanorchestras.org/images/stories/ knowledge_pdf/Audience_Demographic_Review.pdf Lewis, Z December 6, 2013 “Cleveland Orchestra Reports Balanced Budget, Larger Endowment and Growing Audiences in Fiscal 2013.” http://www cleveland.com/musicdance/index.ssf/2013/12/cleveland_orchestra_reports_ ba.html McCarthy, K., A Brooks, J Lowell, and L Zakaras 2001 The Performing Arts in a New Era Santa Monica, CA: RAND McCarthy, K.F., E.H Ondaatje, L Zakaras, and A Brooks 2004 Gifts of the Muse: Reframing the Debate About the Benefits of the Arts Santa Monica, CA: RAND Corporation Mid-Continent Surveys 1955 In-Concert Survey of the Audience Attending the November 11th Symphony Concert at Northrup Auditorium, University of Minnesota http://www.gregsandow.com/BookBlog/minnesota_excerpt.pdf Midgette, A May 10, 2013 “American Orchestras: A Time of Crisis or Rebirth?” The Washington Post http://www.washingtonpost.com/entertainment/music/ american-orchestras-a-time-of-crisis-or-rebirth/2013/05/09/66b27afc-b29211e2-9a98-4be1688d7d84_story.html Motion Picture Association of America 2014 Theatrical Market Statistics 2013 http://www.mpaa.org/wp-content/uploads/2014/03/MPAA-TheatricalMarket-Statistics-2013_032514-v2.pdf Mueller, J.H 1951 The American Symphony Orchestra: A Social History of Musical Taste Bloomington, IN: Indiana University Press NEA (National Endowment for the Arts) November 2009 2008 Survey of Public Participation in the Arts Research Report #49 Washington, DC, NEA http://arts.gov/publications/2008-survey-public-participation-arts NEA June 2012 An Average Day in the Arts: State Participation Patterns from the American Time Use Survey for 2006–2010 NEA Research Note #106 http://arts.gov/sites/default/files/106.pdf NEA September 2013 How a Nation Engages with Arts: Highlights from the 2012 Survey of Public Participation in the Arts Research Report #57 Washington, DC: NEA http://arts.gov/sites/default/files/highlights-from2012-sppa-revised-jan2015.pdf Newman, D 1977 Subscribe Now! Building Arts Audiences through Dynamic Subscription Promotion New York: Theatre Communications Group O’Bannon, R 2014 “The 2014-15 Orchestra Season by the Numbers Baltimore Symphony Orchestra.” http://bsomusic.org/stories/the-2014-15-orchestraseason-by-the-numbers.aspx References 273 Offenbach, J 1877 Offenbach in America: Notes of a Travelling Musician, 58 New York: G.W Carlton & Co Oliver Wyman June 9, 2009 “Churn Revisited: Is Anyone Making Butter Yet?” Presented at League of American Orchestras Conference http:// www.americanorchestras.org/knowledge-research-innovation/audienceengagement/churn-presentation.html#butteryet Parsad, B., and M Spiegelman 2012 Arts Education in Public Elementary and Secondary Schools: 1999–2000 and 2009–10 National Center for Education Statistics, U.S Department of Education http://nces.ed.gov/pubsearch/ pubsinfo.asp?pubid=2012014rev Performing Arts Research Coalition 2004 2002 Household Surveys, Urban Institute Washington, D.C http://www.cpanda.org/cpanda/studies/ a00115?view=summary Pew Research Center’s Internet & American Life Project 2014 Three Technology Revolutions http://www.pewinternet.org/three-technologyrevolutions/ Prescott & Associates June 2014 “Looking Forward - Acting Now.” Presentation to League of American Orchestras Conference 2014 http://www americanorchestras.org/conference2014/wp-content/uploads/2014/03/ Presentation.pdf Pugliese, P.J April 30, 2005 “Parallels Between Fencing and Dancing in Late Sixteenth Century Treatises.” Paper Presented at the Symposium on Historical European Swordsmanship at the Massachusetts Center for Renaissance Studies Rosen, J 2013 “Imagining 2023.” Keynote address at League of American Orchestras 2013 National Conference, June 18 Russell, C.E 1909 “The Grand Orchestra in America.” Cosmopolitan Magazine, March New York: Schlicht and Field, Publisher Sanders, M.A.E September 26, 2012 Atlanta Symphony Orchestra and Atlanta Symphony Orchestra Players Association Ratify Two-Year Agreement http:// www.atlantasymphony.org/~/media/Sites/ASO2011/Newsroom/Press%20 Releases/ContractRatificationReleaseFINAL92612_3.ashx Schweitzer, V October 11, 2013 “Concerto for Piano and YouTube.” The New York Times http://www.nytimes.com/2013/10/13/arts/music/valentinalisitsa-jump-starts-her-career-online.html Scott-Smith, G May 2000 “The ‘Masterpieces of the Twentieth Century’ Festival and the Congress for Cultural Freedom: Origins and Consolidation 1947-1952.” Intelligence and National Security 15, no 1, p 121 Stern, M.J February 2011 Age and Arts Participation: A Case against Demographic Destiny National Endowment for the Arts Research Report #53 Based on the 2008 Survey of Public Participation in the Arts Terry, W 1940 “Radio City Corps de Ballet.” New York Herald Tribune, March 3 http://www.unruffled.org/radiocityballet/wtreview.html 274 References The New York Times June 27, 1869 “The Boston Peace Jubilee.” http://query nytimes.com/gst/abstract.html?res=9401E6DC103AEF34BC4F51DFB 0668382679FDE The New York Times February 10, 1889 “Max Maretzek’s Career.” http://www newspapers.com/newspage/20306445/ The New York Times June 5, 1942 “Ezio Pinza Freed After 11 Weeks on Ellis Island as Enemy Alien.” Tommasini, A October 10, 2014 “The Art of Wooing Commitment-Phobes.” The New York Times http://www.nytimes.com/2014/10/12/arts/music/assubscriptions-fall-orchestras-aim-higher.html Travis, S March 1958 “The Rise and Fall of the Theatrical Syndicate.” Educational Theatre Journal 10, no Johns Hopkins University Press U.S Bureau of Labor Statistics January 2013 2010 Standard Occupational Classification (SOC) System Definitions http://www.bls.gov/soc/ U.S Bureau of the Census 1975 Historical Statistics of the United States: Colonial Times to 1970 Washington, D.C http://www2.census.gov/prod2/ statcomp/documents/CT1970p1-01.pdf U.S Census Bureau 2012 Industry Statistics Portal http://www.census.gov/ econ/isp/index.php von Rhein, J October 24, 2013 “CSO Reports Small Deficit, Record Ticket Sales and Fundraising.” http://articles.chicagotribune.com/2013-10-24/ entertainment/chi-cso-fiscal-report-20131023_1_investment-returnssymphony-center-deficit Vogel, H.L 2011 Entertainment Industry Economics, 8th ed New York: Cambridge University Press WolfBrown 2011 “How Dance Audiences Engage: Summary Report from a National Survey of Dance Audiences.” Research Commissioned by Dance/ USA, San Francisco, CA http://www2.danceusa.org/uploads/EDA/ DanceUSA_EDA_HowDanceAudiencesEngage.pdf Wolf Organization 1992 The Financial Condition of Symphony Orchestras Commissioned by the American Symphony Orchestra League, Washington, D.C Woronkowicz, J December 2011 “An Overview of Cultural Building in the United States: 1994-2008.” Working Paper, Cultural Policy Center, University of Chicago https://culturalpolicy.uchicago.edu/sites/culturalpolicy.uchicago edu/files/setinstone/pdf/overviewcultural.pdf Zinoman, J 2013 “More Revivals This Way Come.” The New York Times, December http://www.nytimes.com/2013/12/08/theater/shakespearedominates-american-stages.html?_r=1\ Index Abstract ballet, 44 Actor-manager system, 33 Actors, 32, 41, 69, 119, 125–126, 127, 135, 166 See also Performing artists Actors’ Equity Association, 128 actors’ income, 126 audition procedures, 122 conditions of employment, 130 contracts with theaters, 153, 147, 162–163, 247, 256 formation of, 134–136 membership and dues, 136–137 relations with other unions, 138, 255 and touring, 157, 229, 266 Agents and managers functions, 100–102 in industry value chain, 89 NAICS classification (industry 7114), 86, 92 Aging audiences, 7, 210–214 American Ballet Theatre, 72, 193, 221 American Federation of Musicians (AFM), 128 audition procedures, 122 conditions of employment, 130 formation of, 131–133 leader system, 133, 134 locals, 129, 183 membership and dues, 136–137 orchestra conferences, 182–184 and recordings, 134, 248 and talking pictures, 69, 133 American Guild of Musical Artists (AGMA), 128, 131, 136, 137 American Guild of Variety Artists (AGVA), 128, 131 American Society of Composers, Authors and Publishers (ASCAP), 141–142 American Time Use Survey, 203–206 Americans for the Arts, 199, 239 Artistic director (AD), 168–169, 223, 230 Art, nature of complexity and intellectual capital, 16–18 longevity and self-containment, 15–16 purpose and audience impact, 15 typology of art forms, 22 Arts advocacy and economic development, 239 and education, 239 objections to public funding, 238 Arts education, 219, 237–239 ASCAP See American Society of Composers, Authors and Publishers Audiences, 197–219 aging problem, 7, 210–214 attendance and rates, 6, 198–203 churn, 217–218 frequency of attendance, 201–203 leisure time activities, 203–207 participant characteristics, 207–210 rebuilding demand, 218–219 subscribers vs single ticket buyers, 214–216 Audition process, 122–124, 254 Bach, Johann Sebastian, 187 Balanchine, George, 3, 43, 72, 194 Ballet attendance, 198–199, 201, 212 companies and budgets, 193–195 dancer salaries by position, 126–127 origins and forms, 42–44 growth in America, 72–73 and The Nutcracker, 3, 43, 194 season programming, 196, 224 See also Dance Barter Theater, 70–71, 249 276 Index Baumol, William, “the cost disease,” 8, 27, 226 Beethoven, Ludwig van, 15, 36, 50, 54, 185–187, 226 Berlioz, Hector, 187 BMI See Broadcast Music Inc Board of directors, 63, 168, 178 governance roles, 229–231 Boston Symphony Orchestra (BSO), 14, 59–65, 74, 181, 224 Bowen, William, Brahms, Johannes, 17, 185–187 Broadcast Music Inc (BMI), 141 Broadway Across America, 159 Broadway League, 147 Broadway theater, 144–147 attendance, 156–157, 200–201 audience demographics, 210–211, 219 flop rate, 59, 146, 151 historical development, 58–59, 68 The Lion King and Wicked, 2, 140, 148, 152, 154–155 musicals vs plays, 147–149 new production costs, 149–151 post-Broadway revenue streams, 151–152 producers and investors, 152–155 revenue trends, 145, 157, 160 running costs, 151 and unions, 138–139, 147 venues and owners, 147, 155–156 Bureau of Economic Analysis, 18–19, 23, 84, 251 Bureau of Labor Statistics, 107, 111–112, 203 Business models, importance of, Caruso, Enrico, 66, 265 Cash flow management, 234–235 Casting agencies, 89, 103, 121 Casting Society of America, 122 Caves, Richard, 10 CBAs See Collective Bargaining Agreements Censorship, 34–35 Census Bureau, 18–19, 87–88, 95–96, 109, 111 Chamber music, 35–36 Chicago Symphony Orchestra, 61, 63, 177, 195, 221, 224 Choral music, 36 Choreographers, 44–45, 194 Classical music attendance, 198, 202–203 forms of, 35–36 historical development, 35–38 musical instruments, 35, 37, 56, 182 popular composers, 185–187, 192 Collaboration and coproduction, 166–168, 229 Collective Bargaining Agreements (CBAs), 129–130, 147, 266 Community service and outreach, 200, 238 Composers ballet, 43 contemporary, 237, 260, 267 historical roles, 32, 36–38, 39, 41 melodists, 16 opera, 41, 192 orchestral, 51, 61, 185–187 Conductor, role of, 37–38, 60–61 Contemporary plays, 161, 164–166 Contributed income cash flow cycle, 234 fund-raising appeals, 233–234 nonprofit accounting, 231–232 regional theater, 145, 169–172, 258 orchestras, 175–176 Copyrights, 139–142 Cost management, 226–229 Creative Industries principles (Caves) A list/B list, 25 art for art’s sake, 25 infinite variety, 26–27 nobody knows, 10, 151 Creators (composers, playwrights, choreographers, etc.) copyrights and royalties, 139–142 in industry value chain, 89–90 Index 277 Cultural diplomacy, 74 Current Population Survey (CPS), 111–115 Dance as an art form, 42, 45 ballet, role of, 42–44 choreographer, role of, 44–45 companies and budgets, 193–194 development in America, 71–73 genres and segmentation, 195 modern/contemporary, 44, 193 notation, 45 positions and movements, 43 salary scales, 126–127 Dancers, 17, 43, 114, 119, 126, 194 See also Performing artists de la Halle, Adam, 31 de Tocqueville, Alexis, 49 Dinner theater, 95, 146, 256 Directors and authors’ unions, 130 Disney (The Walt Disney Company) dynamic pricing, 218 Fantasia, 69 Disney on Ice, 99 The Lion King, 152, 154–155 theme park employment, 253 Dramatists Guild of America, 140 Dvorak, Antonin, 62, 186 Earned income regional theater, 145, 169–172 orchestras, 176, 185 Economic performance drivers, 3–4 Economies of scale, 227–228 in theater, 57–58, 171–172 Education, 116–120 artist training, 116–117 arts degree programs, 117–118 and arts advocacy, 239 and arts participation, 207–208, 211, 219 and audience development, 219, 237–238 and company mission, 178 Employment, forms of, 120–122 employee vs sole proprietor, 109 freelance/self-employed, 96–97, 109, 122 full-time vs part-time, 4, 120, 266 nonemployers, 87–88, 109–110 per service, 125, 254 unemployment rates, 112–113 Endowment income, foundation support, 75, 77 and nonprofit accounting, 232–234 at orchestra companies, 177, 185 at theater companies, 170 Enhancement funds, 167–168 Federal relief programs, 71 Festival company, 144 Festivals, 196 First Continental Congress, 47 Ford Foundation, 74–75, 250 Foster, Stephen, 50, 245–246 Foundation grants and support, 73–75, 77, 170, 174, 217 Fund-raising appeals, 233–234 Geographic expansion, 225–226 Germania Musical Society, 54, 131 Gilmore, Patrick, 55, 196, 246 Goodman Theater, 163, 195 Government support during the Cold War, 73–75 during the Depression, 71 of nonprofit theater, 170 objections to public funding, 238–239 of orchestras, 185 in other countries, 231, 243 public policy agenda, 234 Graham, Martha, 15, 17, 44 Great Recession See Recession of 2008–2009 Handel, George Frideric, 36, 40, 51 Handel and Haydn Society, 51, 54, 60, 246 Haydn, Franz Joseph, 36, 51, 186 Higginson, Henry Lee, 59–60, 62 Higher education, 116–120 278 Index Historically informed performance movement, 38 Hollywood, 10, 154, 223, 246 IMG Artists, 102, 252 Independents and freelancers “Freeway Philharmonic,” 125 NAICS classification (industry 7115), 86, 92, 100 NAICS exception for independent musicians (industry 7111), 96 numbers and income, 106, 109–112 pops orchestras, 181 self-employment, 122 Industries under NAICS classification independent artists, writers, and performers, 92 performing arts companies, 91 promoters, 91 talent agents and managers, 92 Institutional alliances, 225 Intellectual property copyrights and royalties, 139–142 directors and authors, 130–131 Hollywood’s investment, 154 online/Internet services, 142 International Association of Theatrical Stage Employees (IATSE), 129, 131, 138, 162, 255 International Conference of Symphony and Opera Musicians (ICSOM), 182 Internet, 142, 206, 219 Interpretive artists, 120 Italian style of opera, 39–40 Jazz, 18, 38, 74, 94, 196, 243 attendance, 6, 198, 264 Joffrey Ballet, 196 Jullien, Louis Antoine, 54, 60 Jujamcyn Theaters, 155, 167 Key Brands Entertainment, 159 Labor cooperatives, 61 League of American Orchestras, 173, 176–177, 217, 236 League of Resident Theatres (LORT), 162–163 Legitimate theater, 19–20, 34, 144 Lincoln Center, 38, 75, 147, 224, 265 Lincoln Center Theater, 76, 156, 163 Liszt, Franz, 186 Little Theater movement, 70 Live entertainment as a Census category, 20–21 as a spectator amusement, 81 industry participants, 88–92, 100–103 vs the performing arts, 13–14 vs spectator sports, 82–84, 87 U.S spending on (PCE), 1, 9, 81–85, 251 Live Nation, 100, 102, 159 Los Angeles Philharmonic, 3, 10, 125, 177, 265 Hollywood Bowl, 181–182, 196 Los Angeles Music Center, 101, 224, 266 Lyric Opera of Chicago, 189, 195, 222, 265 Madison Square Garden Company, 85, 87 Mahler, Gustav, 63, 186–187, 244 Management strategies market strategy, 10 product strategy, 9–10, 222–224 resource strategy, 10–11 Managers (of artists), 92, 102–103 Managing director (MD), 168–169 Maretzek, Max, 53, 240–241, 246 Market and competitive forces, 4, aging audiences, 7–8 declining attendance rates, 6–7 Market strategy, 10 Marketing, 88–89, 179, 216–217, 235, 250 Metropolitan Opera, 188–192 endowment and finances, 259, 261 Live in HD, 191, 236 Met Opera House, 52, 224 Met Orchestra, 116, 122, 254 National Council Auditions, 124 and New York City Ballet, 72 radio broadcasts, 66, 189–190 Index 279 repertoire, 192 revenue, 98–99 soloist fees, 127 strike in 1980–1981, 77 supertitles/surtitles, 42 union agreements, 129 Mission, 15, 28 and strategy, 221–222 orchestra companies, 178, 221 theater companies, 161, 164 Modern dance, 44 Movie theaters attendance trend, 204 impact on live theater, 67–68, 133–134 vs legitimate theater, 20 NAICS classification, 85 as spectator amusement, 19, 82–83 Mozart, Wolfgang Amadeus, 36–37, 41, 51, 185–187, 260 Muck, Karl, 64, 247 Music historical origins, 29–32 classical music, 35–38 early history in America, 48, 50–54 and dance, 44 and opera, 39 Music contractor, 134 Music directors occupational classification, 108 orchestra role, 61, 178–181, 224 salaries, 127 and unions, 134 Musical instruments, 30–31, 35–36, 56 Musician-manager system, 53 Musicians, 36, 51, 60, 68, 96, 107, 113–116, 122, 125, 178, 188 See also Performing artists NAICS See North American Industry Classification System National Bureau of Economic Research, 78 National Endowment for the Arts (NEA), 18, 23, 73, 75, 198, 233 National Endowment for the Humanities (NEH), 75 Nederlander Organization, 153, 155 New York City Ballet, 3, 72, 193 New York Metropolitan Opera See Metropolitan Opera New York Philharmonic budget, 177 early years, 51, 52, 61, 63 institutional alliances, 225–226 Lincoln Center, 224, 266 New York Symphony, 61, 65, 133 number of subscribers, 215 number of ticket buyers, 217 NY Phil Biennial, 236 New York Times, 62, 183, 246, 248 Niblo, William, 51–52 Nonprofit accounting contributed income, 231–232 revenue recognition, 232 Nonprofit management board governance, 229–231 cash flow and annual cycle, 234–235 fund-raising appeals, 233–234 nonprofit accounting, 231–232 Nonprofit theater See Regional/ nonprofit theater Nonprofit business model, 11 and contractual commitments, 227 development in America, 62–65 during the Depression, 69–71 and subscription sales, 170, 214 North American Industry Classification System (NAICS), 20–21, 85–88 Notation, 45 Occupational Employment Statistics (OES) program, 115–116 Off-Broadway, 147, 166, 258 Off-Off-Broadway, 147 Online music streaming, 142 Opera as music vs theater, 39 costs, 190 historical development, 39–41 language and translation, 41–42 largest U.S companies, 188–190 Live in HD, 191 280 Index repertoire, 192 scheduling, 191 singer training, 117 and unions, 128, 136 See also Metropolitan Opera Operetta, 41 Orchestras attendance, 175, 178, 200–201 audiences, 213–217 auditions, 122–124 community outreach, 200, 238 composers and repertoire, 185–187 concerts by type, 180 financial trends, 175–176, 183–185 growth in America, 54, 59–65, 69, 174–175 historical origins, 35–38 largest U.S companies, 176–177 mission statements, 178, 221 organization and governance, 178–181 overview, 173–174 Patron Growth Initiative, 213–216, 264 pops orchestras, 182–183 survival rates, 184 survival initiatives, 187–188, 236–237 and unions, 129–130, 182–183 Oregon Shakespeare Festival, 70–71, 164, 167 Part-time work, 4, 25–26, 107, 125 PCE See Personal consumption expenditures Performance practices, 4, 38, 190 Performance rights organizations (PROs), 141 Performing artists, 107–128 See also Employment, forms of defining the workforce, 107–108 demographic characteristics, 114 education and training, 17, 116–120 employment characteristics, 109–115 motivations, 24–25 salaries, 116, 124–127 talent and compensation, 25, 227 Performing arts, nature of ancient origins, 29–32 as cultural and creative industry, 22–24 definitions, 13–14 vs entertainment, 15–18 legitimate theater, 19–20 industry participants, 88–89 in relation to other arts, 22 standard industrial classification, 20–21 unique business features, 24–28 value chain, 89–90 Performing arts business, unique features of audience investment, 26 cost and productivity challenges, 27 ambiguous metrics, 28 “no accounting for taste,” 26–27 not-for-profit and no-profit, 27–28 part-time and volunteer, 25–26 steep, stratified talent pyramid, 25 “what I did for love,” 24–25 Performing arts companies basic business types, 143–144 characteristics by size, location, art form, and tax status, 92–100 “the cost disease” (Baumol and Bowen), 8, 27, 226 cost management, 226–229 employment opportunities growth strategies, 224–226 NAICS classification (industry 7111), 21, 85–87 product decisions, 222–224 recent financial trends, 103–106 Performing arts industry history background by art form, 31–35 in colonial America, 47–48 19th century America, 49–63 20th century America, 63–78 Personal consumption expenditures (PCE), 19, 79–80 “Pic-to-legit” musicals, 154 Philadelphia Orchestra, 2, 6, 62, 69, 177, 196, 266 Index 281 Playwrights changing popularity, 16 contemporary, 74, 164–166, 222 Dramatists Guild of America, 140 historical roles, 30, 34, 70 Shakespeare’s popularity, 49, 164 Pops orchestras, 181–182 Popular culture, 16, 23–24, 66, 96, 196 high culture vs popular culture, 24, 50, 69, 181–182, 243 pop/rock concerts, 1–2, 9, 84, 127–128, 204, 251, 252 Producing director (theater), 169 Product redefinition, 236–237 Product strategy, 9–10, 222–224 Prokofiev, Sergei, 186–187 Promoters and presenters functions, 88, 90–92, 100 in industry value chain, 89 NAICS classification (industry 7113), 86, 91 number and revenue, 101, 104, 110, 112 and touring, 143, 153 Publishers copyrights and royalties, 139–141 in industry value chain, 89–90 leading companies, 140, 255 licensing Broadway shows, 151 19th century America, 50, 56 Puccini, Giacomo, 192, 241 Radio City Music Hall, 73 Ravel, Maurice, 64, 186–187 Recession of 2008–2009, 2, 5, 78, 80, 103–104, 110, 114, 119, 145, 160, 170 Recreation and leisure time, 204–206 NAICS classification (sector 71), 21, 85–87 spending (PCE), 79–84, 250 Regional/nonprofit theater attendance, 161, 200–201 audiences, 218 and commercial theater, 167–168 financial trends, 169–173 historical development, 70–71, 78 largest U.S companies, 163 mission and repertoire, 163–166 overview, 144, 159–161 organization, 168–169 season planning, 168, 195, 223 and unions, 162–163 Regional Orchestra Players’ Association (ROPA), 183–184 Regional theater movement, 70 Resident company, 144, 161 Resource strategy, 10–11 Roundabout Theater, 156, 162–164, 224 Royalties, 139–142, 228 mechanical/nonmechanical, 141 performance, 141 royalty pools, 151 Running costs, 151 SAG-AFTRA, 128, 137, 254, 255 Salary scales dance, 126–127 orchestra, 125 soloists and stars, 127–128 theater, 125–126 San Francisco Ballet, 72, 126, 193 Shakespeare, William, 1, 15–16, 19, 29, 32–34, 49, 152, 164, 222, 237 244 Shubert brothers, 58–59 Shubert Organization, 59, 100, 155 Singers, 17, 39, 41, 109, 117, 190 See also Performing artists Single production company, 143 Sole proprietorships, 109 Soloists and stars, 124, 127–128 Spectator amusements, 19, 81–85 Spectator sports and spending vs live entertainment, 87 NAICS classification ( industry 7112), 21, 86 price indexes, 84 vs recreation spending (PCE), 82–84 as a spectator amusement, 19, 81 Stage Directors and Choreographers (SDC) Society, 130 282 Index Stock company, 57, 247 Story ballets, 43 Strauss, Richard, 186–187, 241, 260 Stravinsky, Igor, 44, 186–187, 244, 245 Subscription programs and cash flow cycle, 234–235 declining sales, 170, 214–216 and nonprofit business model, 76 nontraditional alternatives, 236 and season programming, 168, 180, 195–196 Ticketing services, 89, 90, 103 Touring Broadway attendance, 156, 200, 201 economics of touring, 157–159 leading companies, 159 revenue trends, 145, 157, 160 and unions, 157, 229, 266 Touring companies, 143 in 19th century, 53, 57–58, 132 decline of, 68, 70, 135 Typology, art forms, 22 Talent buyer, 102 TCG See Theatre Communications Group Tchaikovsky, Piotr Ilyich, 3, 43, 62, 185–187, 245 Technology, impact of, 7–8, 24 early film, 67–69 Internet, 205–206, 219 musical instruments, 31, 37, 56 phonograph and radio, 65–67 recreation spending, mix of, 81–82 stagecraft, 33, 158 union reactions to, 133–134, 136 Theater legitimate theater, 19–20 historical origins, 30, 32–34 in colonial America, 47–48 in 19th century America, 49–50, 56–59 See also Broadway theater, Regional/ nonprofit theater, and Touring Broadway Theatre Communications Group (TCG), 146, 161–162, 176, 200, 215, 258 Theatrical Syndicate, 58 Thomas, Theodore, 60–61, 63, 66, 133, 181 Ticket prices, 9, 84 discounting, 217–218 historical 63, 67, 70 in theater, 145, 147–148, 157, 171 Unions, 128–139, 182–183 collective bargaining agreement (CBA), 129–130 comparisons among, 136–138 orchestras musicians, 182–183 See also Actors Equity Association, American Federation of Musicians, American Guild of Musical Artists, American Guild of Variety Artists, and International Association of Theatrical Stage Employees Value chain, 88–90 Vaudeville theaters, 56–59 Venues and copyright law, 141–142, 256 historical development, 30, 51–52 in product strategy, 9, 223 and promoter industry, 91, 100–101 in value chain, 88–91 and vertical integration, 224–225 variations by art form, 195–196 Verdi, Giuseppe, 192, 241 Vocal music, 36 Volunteer performer, 25–26 Wagner, Richard, 41, 187, 241, 248 Washington, George, 48–49 Wilde, Oscar, 15 Works Progress Administration (WPA), 71 OTHER TITLES IN OUR INDUSTRY PROFILES COLLECTION Donald Stengel, California State University, Fresno, Editor • A Profile of the Electric Power Industry: Facing the Challenges of the 21st Century by Charles Clark • A Profile of the Steel Industry: Global Reinvention for a New Economy by Peter Warrian • A Profile of the United States Toy Industry: Serious Fun by Christopher Byrne • A Profile of the Furniture Manufacturing Industry: Global Restructuring by Susan M Walcott • A Profile of the Oil and Gas Industry: Resources, Market Forces,Geopolitics, and Technology by Linda Herkenhoff • A Profile of the Farm Machinery Industry: Helping Farmers Feed the World by Dawn M Drake • A Profile of the Automobile and Motor Vehicle Industry: Innovation, Transformation, Globalization by James M Rubenstein • A Profile of the Software Industry: Emergence, Ascendance, Risks, and Rewards by Sandra A Slaughter Business Expert Press has over 30 collection in business subjects such as finance, marketing strategy, sustainability, public relations, economics, accounting, corporate communications, and many others For more information about all our collections, please visit www.businessexpertpress.com/collections Business Expert Press is actively seeking collection editors as well as authors For more information about becoming an BEP author or collection editor, please visit http://www businessexpertpress.com/author Announcing the Business Expert Press Digital Library Concise e-books business students need for classroom and research This book can also be purchased in an e-book collection by your library as • • • • • a one-time purchase, that is owned forever, allows for simultaneous readers, has no restrictions on printing, and can be downloaded as PDFs from within the library community Our digital library collections are a great solution to beat the rising cost of textbooks E-books can be loaded into their course management systems or onto students’ e-book readers The Business Expert Press digital libraries are very affordable, with no obligation to buy in future years For more information, please visit www.businessexpertpress.com/librarians To set up a trial in the United States, please email sales@businessexpertpress.com A Profile of the Performing Arts Industry EBOOKS FOR BUSINESS STUDENTS David H Gaylin POLICIES BUILT BY LIBRARIANS • Unlimited simultaneous usage • Unrestricted downloading and printing • Perpetual access for a one-time fee • No platform or maintenance fees • Free MARC records • No license to execute The Digital Libraries are a comprehensive, cost-effective way to deliver practical treatments of important business issues to every student and faculty member For further information, a free trial, or to order, contact:  sales@businessexpertpress.com www.businessexpertpress.com/librarians Industry Profiles Collection Donald N Stengel, Editor Culture and Commerce Attending a live concert or theatrical performance can be a thrilling experience At their best, the performing arts represent the height of human creativity and ­expression But the presentation on stage, whether it is Shakespeare, Beethoven, or The Lion King, depends on a business ­backstage This book provides an overview of both the product on stage and the industry that makes it possible While the i­ndustry’s product is unique—with unique supply and ­ demand characteristics—it is still an industry, with economic inputs, organization structures, competitors, ­ business ­ models, value chains, and customers We will examine each of the major segments (Broadway, regional theater, orchestra, opera, and dance) along these business dimensions This book will give lovers of the performing arts an ­nderstanding of the business realities that make live u performances possible Managers, board members, and ­ performers will be better equipped to take on the ­strategic challenges their companies face People contemplating any of these roles will have a better idea of what to expect Business analysts and students of strategy will discover ­ how economic frameworks apply in this unique setting where culture and commerce converge David H Gaylin is an expert in arts management, business strategy, and executive development He is a ­ managing director of Con Brio Consulting LLC, a management-­ ­ consulting firm, and combines a 25-year career in corporate strategy and development with eight years of CEO-level arts management experience Gaylin earned his AB degree from Harvard College and MBA from Harvard Business School An active clarinetist, his music study includes a Master’s degree in conducting from the New England Conservatory of Music He has written for the Wall Street Journal, Management Review, Journal of Business Strategy, Human Resources Professional, and other publications Industry Profiles Collection Donald N Stengel, Editor ISBN: 978-1-60649-564-3 A PROFILE OF THE PERFORMING ARTS INDUSTRY Curriculum-oriented, borndigital books for advanced business students, written by academic thought leaders who translate realworld business experience into course readings and reference materials for students expecting to tackle management and leadership challenges during their professional careers GAYLIN THE BUSINESS EXPERT PRESS DIGITAL LIBRARIES A Profile of the Performing Arts Industry Culture and Commerce David H Gaylin .. .A Profile of the Performing Arts Industry A Profile of the Performing Arts Industry Culture and Commerce David H Gaylin A Profile of the Performing Arts Industry: Culture and Commerce. .. PROFILE OF THE PERFORMING ARTS INDUSTRY Performing Arts in Relation to Other Arts Another way of defining the performing arts is their position in the overall art world In the first half of the. .. the carnival season at the palace of the 40 A PROFILE OF THE PERFORMING ARTS INDUSTRY Duke of Mantua, Italy, where Monteverdi was the master of music Based on the Greek myth of Orpheus and Eurydice,