Orchestra business model
Do orchestras have a viable business model any more? My question is prompted from news out of Detroit this week that the musicians of the DSO are contemplating a strike. The orchestra posted a $2.2 million annual deficit last year. Meanwhile, its payroll includes about 100 musicians at $98,800 for current minimum salary, plus extras (article says they are the 10th highest paid in the country). Musicians have taken concessions and now want a raise. ... talks have broken down between their union and symphony management, who says this contract is their final offer.
In Detroit, the coming season is now in jeopardy.
In Cincinnati, the current minimum annual salary is $88,260 plus $3,640 for recordings. Most make more.
I'm wondering how many orchestras across the country in similar markets are running deficits, and getting by somehow, year after year? Can this business model go on indefinitely?
posted by Janelle Gelfand at 10:24 AM
3 Comments:
at 8/15/2007 09:34:00 AM 
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at 8/16/2007 09:49:00 PM 
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at 8/16/2007 10:48:00 PM 
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Post a Comment*A major American orchestra with a large deficit and the musicians demanding more with a strike contemplated-who would have thought it. Can it happen anywhere-yes. Could it happen here-most certianly-at least the deficit part. The musicians union have insulated themselves this time around from having a need to go on strike. Can this business model go on indefinitely-no.
Rule #1 in operating a ongoing concern is that you have to have more money coming in than going out. No matter if you are a "for profit" or "not for profit" entity this is true. The people who comprise these institutions which includes management, musicians and visiting artists don't really seem to see beyond their insulated world. There is a finite amount of money to spend for this entertainment and there is a lot more competition for the consumers time and money in 21st century America.
Aging audiences,declining recording sales and percentage of market, high ticket prices, declining season ticket holders, major donors from the last half of the 20th century aging and disappearing along with overall donor fatigue coupled with any number of things that compete for the concert goers times does not bode well for the future. Until this industry and these organizations decide to reinvent themselves what is happening in Detoit is not a fluke.
I think one other question should be asked-What if they go on strike and it is met with a collective shrug of the shoulders by their customer base and the public in general? What is the next step for them after they have crossed that Rubicon? How will they get their customers back?
Steve Deiters/Oakley
I agree with all that Steve said above. There appears to be a sense of entitlement about some arts institutions. Many such non-profits (especially orchestras) fail to understand that their business model is also market driven, and when they fail to adapt their product to the evolving needs of their audience (especially packaging and presentation and outreach), they, like all businesses, risk their viability.
Over the years we've seen the Cincinnati Symphony reduce its community presence ( fewer park concerts, outreach programs to outlying communities), yet its annual budget has grown to near $35 million dollars. That's a lot of "jack" to sit around playing in Music Hall for fewer people. Now they want to down size the historic structure so they can tout fewer empty seats. What will that cost in the end? A $100 million?
Then there's the captial campaign to increase their 80 million dollar endowment. And what's a million or two deficit every couple of years? Somebody will write a check. Thanks goodness they get a third of the annual Fine Arts Fund campaign total.
I hope the money keeps flowing, because otherwise the CSO might really have to rethink their business model.
I don't know if I can agree. I think I want what it takes to have a great orchestra in town. I can appreciate what the community orchestras have to offer to some people---but I need the 'art' driven programing and high-end playing. The business model for arts organizations is number one: create art; number 2:raise money to do it. By the way, if we want a great city, we also need an expanded opera season, a better art museum, etc. This is what helps grow a community. (Let's throw in a viable school system) From what I see, there is a large community of citizen that are vying for mediocrity and that's so disheartening.
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