How Will Arts Organizations Change to Deal with COVID-19?
It’s an overwhelming time to be in the arts, whether you’re a professional performer, educator, administrator, or student. On one hand, it can feel like everything is semi normal: you can create a practice routine, exercise plan, teach students remotely, and get things done, if you’re so inclined. Online musical businesses are popping up everywhere, from online music lessons to online audition preparation to online practice challenges and beyond. Conversely, there’s a lot of uncertainty as to when/if things will return to “normal,” and what the new “normal” will be. It’s hard for me to be motivated to practice my instrument when my best chance of performing for people is via a video made on my phone.
The bigger question I’ve been grappling with these last few weeks and that I haven’t seen being addressed is, “How will arts organizations change to deal with this and how will the music industry change?”
I’ve performed as a member of a few professional ensembles over the last decade, and performing groups have three primary ways to generate revenue: earned revenue, contributed revenue, and government funding. One of the main sources of earned revenue is ticket sales, whether it’s an orchestra, small ensemble, dance company, theatre production, or other performance, and we’re looking at subscriptions, food and beverage, parking, programs and advertisements, merchandise, and more. In addition, contributed revenue can consist of grants from both corporations and foundations, private and corporate donors, and fundraising events. Lastly, we have the government funding, which tends to be around 10% of revenue. (Citation from Grantmakers in the Arts, although I’ve seen different conflicting estimates depending on the year and the organization). I haven’t found conclusive data on how much endowment interest revenue counts for a budget, so I assume it’s highly dependent on the endowment and the organization.
Each organization has a different percentage of earned revenue, contributed revenue, and governmental funding, depending on the country, size of the organization, and overall financial situation. It also means that some organizations are more dependent on ticket sales and performances than others. In addition, each organization has a different number of employees (an opera, dance, or theatre company may hire costumers, stage hands, set designers, musicians, choirs, rehearsal pianists, and more), different rental costs for spaces (or none at all), as well as endowment size and what the restrictions are for withdrawing from the endowment’s interest. We already know that no organization is currently performing, which takes out all of the earned revenue based on performance, and that the no one knows when organizations will be able to perform again. In addition, many arts organizations run educational programs, whether they are youth symphonies, school concerts, summer training programs, or after school training programs to additionally subsidize the organization. Presumably, that tuition and grant money is either on hold or being returned, as most educational programs are unable to currently operate.
It’s a difficult time to be in an arts organization, no matter whether you’re a performer, educator, administrator, or other type of employee, and it’s an uncharted territory for everyone.
Hypothetically, there will be government funding to help cover some of the costs of deficits, but if the earned revenue stream is zero, the costs of renting a space needs to be paid (regardless of whether the ensemble is performing), and contributed revenue diminish, there is a substantial deficit. A recent Seattle Times article estimated that Seattle based arts organizations are projected to lose 74.1 million dollars by the end of May, assuming no performances are able to take place. While that combines many different organizations together, that number is staggering for one city in the US.
If governmental funding is the primary hope for bailout, we need to remember that the current administration has attempted to undermine or dismantle the National Endowment for the Arts and generally reduce arts funding in the US. In addition, the amount of governmental bailout needed would be much higher than it has ever been, in a time where every organization is struggling, not just one. In order to try to make some revenue, many ensembles are furiously selling future subscriptions (future ticket sales) to cover costs, which is also currently being negatively affected by the current situation. Why?
Because many performing arts audiences are higher at risk for the COVID-19 virus, either because of age or health conditions
Because it’s unclear whether next season will actually be happening, and ticket holders don’t necessarily want to spend money on something that may not happen
Because some subscription and ticket purchasers are being hit financially by COVID and cannot justify the cost right now
Now to be clear, I am not an economist, nor do I know the exact workings of each organization. I’m a musician who has played in orchestras during difficult negotiations and financial issues, and I’ve been furloughed 3 years out of the last 6. One of my biggest predictions is that we are not going to be back to normal come fall, with a full season of performances, well financed ensembles, and the same pay salary as this past season, regardless of the ensemble. Most orchestras are enthusiastically selling their next season despite the fact that none of us know when we’ll return, because that seems like the only way to proactively make money. Conversely, those same ensembles in the US have canceled the rest of their 2019-2020 season and have furloughed the bulk of their staff because they don’t have liquid assets to pay staff for months without earned revenue.
While most of us agree that flattening the curve is critical for the health of performers and our audiences, we haven’t acknowledged that flattening the curve actually spreads this virus over a long period of time, which is great for managing our healthcare system, but doesn’t bode well for in person based businesses such as the performing arts. In addition, until there’s a vaccine or widespread immunity, people will be less enthusiastic about going out, especially aging audiences. My point is instead twofold:
Things will probably not just go back to normal in a few months, especially with substantial arts deficits and if organizations cannot perform due to quarantine.
The performing arts deserve to survive, but to do so, will need to change. How will they change? I have no idea. This pandemic highlights many of the issues the arts- the dependence on private funding and ticket sales, the narrow demographic of audiences, the small number of performing jobs available, the dependence on freelance workers who are now without benefits, and the low salaries for many of these individuals. How will the industry change (or not change) to manage this moving forward? How will going digital in this time impact the arts, for better and for worse?
I have many questions, but few answers.