In my June column, I spoke of the financial reality of orchestras – how ticket sales usually pay less than half of total expenses, and how we depend on the philanthropy of generous donors to make up the difference and keep the music playing.
Another point that’s important to make is that most of the costs of orchestras are human costs, starting with the 60-70 musicians you see on stage at each concert. They’re joined by conductors and guest artists, and supported backstage by stagehands and technical personnel. Our staff run the business, handling logistics, scheduling, finance, personnel, music library, marketing, program development, and philanthropy. Because we employ a lot of substitute and extra musicians over the course of a year, we typically have more than 300 W-2 forms (employees) and over 100 1099 forms (contractors) to send out each January.
Human costs mean payroll, and people have a reasonable expectation to be paid more over time, for as we all know, costs for all goods and services increase over time, including daily staples like food, fuel, and clothing. A dollar today does not buy as much as it did in 1993 when the Orlando Philharmonic was founded, so we can always expect our costs to increase from year to year.
Meanwhile, ticket purchasers are sensitive to price increases, and most donors do not make automatic increases for inflation. In my experience, most people who give $1,000 think, correctly, that they are making a generous gift, and keep it the same from year to year. Keeping pace with our costs would, over time, be more like $1,000, then $1,050, then $1,103, etc. While most donors don’t do that, occasionally some do make a major leap in giving, like going from $5,000 to $10,000, and we appreciate it very much when that happens. But generally speaking, increasing philanthropic income means finding more donors, and that takes more staff resources, and the result is a constant battle for revenue to keep up with expenses. Overall, revenue tends to be static or inelastic, whereas expenses are dynamic and always growing.
For all these reasons, orchestras do not make a profit, and instead function as not-for-profits that depend on the contributed support of generous donors.
But we do sell tickets, and it’s a fact that some concerts do sell better than others. If you’ve been in the business a while, it’s not too hard to predict what those will be. In the opera world, it’s A-B-C: Aida, La Boheme, and Carmen. In ballet, it’s the Nutcracker, Swan Lake, and then basically everything else. For orchestras, Beethoven’s 9th, Carmina Burana, the Mozart & Verdi Requiems, the Rachmaninoff Piano Concertos, pretty much anything by Tchaikovsky especially the Piano and Violin Concertos and some big showcase pieces like “Pictures at an Exhibition” – these are the things we know will fill the seats, or at least more than an all-Lutoslawski program will.
On the pops side of things, we know that Holiday concerts, Broadway, movies, and well-known guest artists always sell well. Classical concerts that sell well lose less money than those that don’t, and some pops concerts actually make money. In the pre-pandemic world for instance, I could count on my “Rockin’ Orchestra” series concerts in Dayton to add $15,000 to the bottom line, on average, for each one we did back then.
So inevitably, once more fiscally attuned board members become aware of this, the question gets asked, “Why don’t we just do more of the things that make money, and less of the things that don’t?”
It’s a good question, so let’s look at several constituencies that benefit from a broad range of programming.
The Audience: appreciates variety in repertoire, not Beethoven’s 9th and the Tchaikovsky Violin Concerto every single season. This is particularly true of subscription audiences.
Musicians: similarly expect to play a broad range of music, not just a narrow slice of popular works. Orchestral musicians have a different mindset than Broadway performers who may sing the same show, over and over again, 8 shows a week for years.
Contributors: are often motivated specifically by certain works and artists. Foundation funders may have a particular interest in new and diverse repertoire. No matter what we program, we’ll always depend on contributed income, so aligning with our funders’ interests is important. And if we just play what people already know and like, we’d never play anything new or unknown at all.
In my view, while one can program pops with a primary goal of maximizing revenue, that approach simply cannot be followed in the same way with core repertoire programming, often called “Classics” or “Masterworks” concerts by orchestra programmers. It’s not true to our mission, to both serve the community and to advance the art form. We will always come back regularly to Rachmaninoff’s 3rd, Beethoven’s 5th, and other favorites, but we’ll do it as part of a balanced and varied programming that does more than just honor the established masterworks of the past.
Orchestra management is challenging indeed, and I hope these columns have helped share an insider’s perspective. Thank you for reading!
Read more like this on our LinkedIn Newsletter!