Reinventing America’s Cultural Support System

Imagine for a moment that the current tumult over federal and state funding for culture led to the opportunity to pause and thoughtfully reinvent a viable public support system. A silver lining to the dark cloud, if you will.

Would it look like the support systems and amalgamation of agencies our country invented – one piece at a time, over a half century ago? Chances are, not at all.

Anyone looking for good thinking about a new type of cultural system would do well to read Culture and Creativity in the EU Structure, a report that came out last September. It studies EU investment in culture over the past decade and makes a solid case for what it calls “a focused, flexible and integrated culture-based development
strategy” throughout communities and regions of the EU.

At its foundation for examining the value of investing in culture, the analysis uses the tri-part definition that the EU Cultural System has employed since 2006:

Core Arts Areas: Performing and visual arts, cultural and architectural heritage, and literature.
Cultural Industries: Film, DVD and Video, TV and Radio, Video games, New media, music, books, and press.
Creative Industries:Those industries that use culture as input but whose outputs are mainly functional, including architecture, advertising, design, and fashion.

Both the Cultural and Creative Industries are further defined as “Those industries that have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the creation and exploitation of intellectual property.”

In a few simple lines, this glues together all the splinters across arts, heritage, history, and combines non-profits and for-profit industries. Wouldn’t it be great if our cultural system was as straightforward and inclusive as this?

By taking this holistic view, the report (an outgrowth of a policy group brought together in Brussels in 2009), was able to examine both the traditional impacts of core areas – tourism and related economic value of attending and participating in arts and culture – and contributions to a larger economic future. The report points to the “the rich and dynamic contribution” that all three of the above areas make to the knowledge economy and innovation, and to employment creation and social cohesion. In policy, the EU is unafraid to talk about supporting creative entrepreneurs at the same time as supporting traditional institutions. They have equally important roles worthy of investment, and the report notes that even in the past two to three years, the ROI on supporting culture and creativity as drivers of broad innovation has been well documented and demonstrated.

It is in this area of arguing for investment in culture as an economic driver of wide ranging knowledge-based industries that the EU has come the furthest in making a case for a comprehensive approach to culture and creativity. According to the report, “Culture-based creativity is an essential feature of a post-industrial economy. Culture drives technological and non-technological innovation, stimulates research and optimizes the application of human resources in the development of new products and services.” Basically, it makes a coherent case that the knowledge-based economic system cannot thrive without a healthy cultural-creative capacity.

How refreshing. How non-defensive. Imagine if we could restructure, reinvent, and optimize our investments in America’s cultural-creative system along similar lines. Imagine if we could go beyond the economic impact studies we rely on so heavily to make our case. (Per the report, a research institute in the UK that focuses on the nature of innovation has documented the supply chain linkages between artistic and creative activities, demonstrating positive relations to innovation and showing that creativity and culture “play an important role in the ecology of innovation.”) We could and should do the same.

Imagine, too, if like the EU we recognized that artists are important leaders in demonstrating entrepreneurship and small business development. The report writes that “The creative sector makes many of these processes evident and communicates the positive attitudes, the excitement and the vision that provide the motivation for entrepreneurs.” Rather than seeing the arts community as off to the side of entrepreneurialism and small business development, the EU is increasingly putting artist out ahead as models to others.

Now let’s be totally honest. Culture is not all rosy in the EU. A great deal of what the EU has attempted in what it calls “social cohesion” through culture has failed to live up to expectations. Some, including most recently the President of France, say it has failed completely.

That said, there is much to consider if we in the United States were to advance our system of cultural support and related advocacy for investment as has the EU in its support of the three part cultural system and the related recognition of both culture and creativity as central to innovation. We hear a lot these days about “invest in clean energy” or “invest in new technology.” Wouldn’t it be great if we could similarly talk about America’s investment in culture and creativity? We could, and should. The first step is to reinvent our cultural support systems and structures, and bring the field together around a new vision and expanded purpose.
Culture and Creativity in the EU Structure

Cultural Funding in America: All for One, or Splintered Forever?

On March 4, 2011, the federal government will shut down unless the continuing resolution to fund the balance of this current fiscal year (which started October 1) is passed by Congress. This leaves three weeks before virtually every penny of federal funding for our American culture could well end. Today a whole new round of cuts were recommended by the House Republicans as they respond to pressure from their constituencies to go far beyond their earlier cuts. Those original cut recommendations would have peeled back about $12 million, combined, from the $146 million to the NEA and NEH that haven’t yet been spent this year. Forget that modest approach.

Today’s recommendations include the following immediate agency eliminations that would be effective March 4 for the balance of this fiscal year:

Eliminate NEH to save $71 million.
Eliminate NEA to save $76 million.
Eliminate IMLS to save $147 million.
Make the public pay to get into the Smithsonian, to save $254 million.
Eliminate the Advisory Committee on Historic Preservation to save $3 million.
Eliminate the Committee on Fine Arts to save $6 million.
Eliminate the Department of State Cultural Exchange/Education Program to save $363 million.

Plus, as the House Republicans have already recommended:

Eliminate $51 million out of the National Park Service (this would end Save America’s Treasures, Preserve America and National Heritage Areas).
Eliminate the Corporation for Public Broadcasting.

And, don’t forget that other cuts – such as the proposed elimination of the Economic Development Administration, Community Development Block Grants and more – will also have impact on cultural infrastructure. And that, needless to say, without Federal matching funds few states will find it necessary to maintain their own public matching dollars for arts, heritage, history, museums, etc.

No doubt that you have and will be getting emails and calls to action about this. But probably those calls are piecemeal, asking you for you to advocate for one or another of these line items while ignoring the whole, and that’s the problem. We a splintered sector that has never to date united around the concept of our culture, and now each splinter may be too small and too isolated from its compatriots to build a coalition to save federal support for any of the splinters.

We have a few weeks to save the half century-plus of infrastructure that modest as it may be demonstrates our public commitment to the breadth and majesty of our American culture, our shared story. If we stand splintered now, we may never get a chance to regroup. If we think that saving orchestras or contemporary dance is more important or that saving library funding and museum funding matters more than poetry, or that history and heritage and historic architecture should out trump theatre…well, how will it end? And even, let’s pray, that some of the splinters retain a bit for the balance of this year. How will we keep the whole of culture alive in federal funding next year?

Is Landesman Right? Is 2011 the Crossroads for the Arts Economy?

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.