What if NEA head Roco Landesman is right? What if we have reached the zenith of demand for theater (you can insert live performing arts in general), meaning that supply should tighten? Landesman has been extensively blogged and re-blogged around the country since the New York Times quoted his comments Thursday. According to the Times’ Robin Pegrebin, Landesman spoke at a symposium on new play development at Arena Stage in Washington. He responded to a question about the financially struggling world of theater saying “you can either increase demand or decrease supply. Demand is not going to increase, so it is time to think about decreasing supply.”
Needless to say, he’s gotten most of the arts field good and hot under the collar: How can he even suggest less product? You’ll read that Landesman’s incendiary remarks have already led to loud calls for the NEA to start building audience demand. “Isn’t it the NEA’s job to build demand?” they cry. You’ll also read that indignant artists and arts administrators are jumping onto this with calls that every other funder – in addition to the NEA – should be back at the task of building demand – a task most funders have largely left.
So what is wrong?
Call it the upside down economic pyramid. The not-so-good outcome of too much supply.
1. We live in a market economy that shapes every thought and every purchase we make. We know full well that when there is plenty of supply, we can be last minute buyers and can get cheap tix. We can expect bargains. We can act toward the live performing arts like we act toward buying clothes: there’s plenty (too much?) to choose from and we don’t need to be motivated to lock in advance tickets.
2. As consumers in a recession economy, we live in the real world of diminished disposable income, adding the factor I refer to as “it better be really, really special or forget it.” I’m not even talking about the terrible impacts of unemployment and layoffs on people all around us, either, just plain old every day less disposable income. Looking at the impact of the strife in Egypt on the cost of fuel, I calculated out a hypothetical $1 more per gallon of gas at 30 gallons a week, and that comes in at $1,560 per year in less spending money. I don’t even want to think about what the additional cost of home heating will be. So at an average of $120 tickets per household for live events, that is 13 lost nights at the theater in the coming year.
3. But at the same time as we have less money to spend, there is more product available. Face it: the arts have been on supply overload for years. Today there is ton of supply – more to choose from, longer seasons, hundreds of events every year. There are thousands of arts companies presenting their work. And over the years performing arts halls have evolved to offer more seats than ever before, offering more performances per week.
4. Then, there is the cost of labor. One of the greatest successes in the arts field as a profession over the past few decades is that most of the artists in the field are compensated, largely, at a professional wage. At the same time, those fixed costs have led to an attempt to recover the expenses through more performances, to sell more units, if you will, to cover the costs, and that has led to … a need to sell more and seats. Rather than three performances of the ballet, you now can choose from six or seven, simply because the ballet company needs to sell that many tickets to cover the “earned” portion of ticket costs.
5. All these events and related audience development savvy have indeed led to greater audiences. But the audience growth is no more monolithic than the audiences for network television in the face of the couple hundred on-demand channels that exist. As audiences grow, they splinter. As we diversify culturally, we are much less likely to go to a few main stream events and more likely to pick out that which reflects our own unique interests and culture. As audiences splinter, the largest of the entities – those that built for ever larger crowds and sadly that have the largest fixed costs and very little elasticity – suffer more.
This upside-down pyramid means that things don’t look good for the most fixed-expense, least elastic performing arts organizations out there, unless they find ways to self-subsidize to meet the expenses by inventing new product lines (think of the long term prognosis for simulcasts) or by raising ever more in endowment. The likely outcome of this is that there will be fewer fixed expense performing arts organizations. The most vulnerable, those without endowments or new revenue prospects will either face mergers or folding unless there is a major adjustment in the overall amount of product and demand.
Those most likely to succeed – as always – will be the flexible, the adventurous, the small, and the experimental who are making art more to make art than to build audiences. They always have been the soul of the field, the reason that great artistic breakthroughs happen in any lifetime. They don’t live in the constraints of a market economy, never have and hopefully never will.
In between will be the paid-per-session orchestra in most smaller and mid-sized cities, or the community theater company that has become less and less volunteer, moving closer to that fixed cost model. It will be the ballet school that reaches beyond its annual Nutcracker to put on a Coppelia so that it has a “season,” but that can no longer afford to balance the cost of a union tech crew with the fact that the Coppelia audience is one twentieth the size of the Nutcracker crowd. In between will be necklace of performing art presenters in every suburb, each a fifteen minute drive from the others, all competing for a share of the splintered market between them.
It begs the question of what is to be done.
One side would dramatically scale up subsidies from the government so that things can at least be status quo; the other side would let the market run its course. Some would see mergers as the only path for the decade ahead: others would fight to the end against any loss of arts-related jobs. One side would seek to protect consumers from the costs of real art; the other side would let consumers confront the real costs of art. One side would look to limit fixed expenses: the other side would look to protect existing models. One side would put all funding into deficit subsidy: the other side would invest everything in new product and distribution.
There is no single, correct answer to any of these, no single side that is right. We are unmistakably at a crossroads in the economy of the arts of a scale and ripple magnitude we haven’t seen before. I for one am thrilled that Landesman put the reality of market, demand and supply out there. I doubt there has been a NEA chair that has done us a greater service. He’s made us look deeply at the economic realities and is challenging us toward what may be a new future for the consumption-based industry that is the majority of the arts field today. It is time to ask the questions of supply and demand, and time to – hopefully – shape a new economy for the arts.