Are Mid-size Performing Arts Organizations Caught in the Middle?

In 2001 RAND released a report on performing arts in the U.S., Performing Arts in a New Era. The report predicted that it was going to be a difficult time for performing arts organizations for the foreseeable future. Almost a year later, Frances Phillips, in Grantmakers in the Arts Reader, examines the prediction by comparing it to recently published field reports from different performing arts disciplines: Dancing with Dollars in the Millennium, a ten-year study of trends in dance published by Dance/USA in Dance Magazine in April 2001; TheaterFacts, the annual fiscal survey published by Theater Communications Group (TCG) and Reaffirming the Tradition of the New, a report on five regional round table sessions on the future of the National Performance Network (NPN). Phillips identified eight elements in Performing Arts in a New Era and examined them in light of the findings in the other three reports. Following are the eight Performing Arts statements (in bold) and her findings in the other reports.

1 The number of performing arts organizations has grown but the average earned revenue shave not.

It would seem that there has been impressive growth in the number of professional dance companies in the past ten years. According to the Dance/USA survey, the number of professional dance companies grew from 157 in 1975 to over 650 in 1993, the date of their last survey. In its 2000 survey of the theatre community, TCG reported a slight increase in the number of members responding to the survey, 230, compared to 215 in1995. But, as Phillips points out, this small increase is not a reliablemeasure. In both dance and theatre, the average earned revenues have grown inrecent years. In particular, in the past 10 years, large and medium ballet companies and large modern dance companies have become moreprofitable (75% with profits), while only 33% of medium-size dance companies were profitable. The TCG survey reported that the average audience per performance remained the same in 1995 and 2000, while the average earnings per performance in 2000 was much higher than in 1995 ,though the numbers were not adjusted for inflation.

2 Nonprofit performing arts organizations continue to be as dependent noncontributed revenue as in the past. Although a high earned income ratio (the relationship between earned and contributed revenues) is usually considered to be a healthy sign, this may not be the case in the dance community. According to the Dance/USA report, many dance companies with low earned income ratios have been profitable in the past 10 years, while there have also been dance companies with high earned income ratios who have ended up with a deficit. However, medium-size modern dance companies, which tend to beless profitable, also have the lowest earned income ratios. In the theatre community, the earned income ratios for all theatres in the TCGsurvey have increased between 1997 and 2000, particularly for mid-size theatres, while theatres with small budgets tend to rely more heavily oncontributed income.

3 Average ticket prices have risen sharply. Not much information is available on changes in dance ticket prices except for increases in Nutcracker tickets. On the other hand, theatre ticket prices have increased at a rate of 4% above inflation between 1997and 2000.

4 Shifts in federal funding have been dramatic, affecting small and mid-sized organizations more than large-budget organizations. Since the early 1990s funding from the National Endowment for the Arts(NEA) has gone to fewer dance companies and the amount given has alsodecreased, with medium-size modern dance companies being hardest hit. In addition, contrary to the prediction that this decrease would be offset by an increase in state funding, the level of state funding has also declined except for support to medium-size ballet companies. On the other hand, local support for dance companies, except for large ballet companies, has increased slightly, although the dollar amounts are smaller. But even with these increases, overall government support has decreased for all type of dance companies.
The picture for the theatre community is somewhat different, with state and local funding filling the gap left by the drop in NEA funding, Aswell, in 2000 there was a slight growth from 1997 in overall public support due to increased state and local funding. Small theatres are most dependent on state and local funding, while medium-size theatres receive only a modest percentage of their contributed income from state and local sources.

5 Mid-sized arts organizations face relatively high fixed costs for real estate and personnel. For dance companies, personnel expenses are at least 50% of fixed costs, going to almost 60% for large ballet companies. In the Dance/USA study, there was a slight increase in administrative staff between 1991 and1999, while overall wages kept up with inflation and there was no decrease in the number of weeks dancers worked. The situation is similarin theatre, where more than 54% of budgets go to personnel, a figure that increases to 57% if royalties to playwrights is included.
The cost of facilities is also critical as real estate prices increase and performance and rehearsal space is bought up by developers. One solution is for an organization to buy its own space. But, as the NPNreport points out, While obtaining ones own building has historically been viewed as a measure of success, it instils great responsibility on those who need to finance, manage and maintain the space.

6 Mid-sized artsorganizations must downsize to focus on niche markets or grow to competewith larger organizations.
None of the reports examines these possibilities though there is a discussion of niche marketing in the NPN report.
The Dance/USA report notes that no mid-size ballet companies have grown enough to be classified as large ballet companies in the past 10 years.

7 Key tolarge-budget organizations vitality is successful mounting of blockbuster performances.
The closest to a discussion of blockbusters is a discussion of Nutcracker productions in the Dance/USA report, which suggests that there are limitations to blockbuster productions but also suggests that medium-size organizations can exploit these opportunities. For large balletcompanies, attendance at Nutcracker productions peaked in 1993 and has declined since then. However, medium-size ballet companies were more successful in retaining audiences and also in maintaining the amount ofrevenues from their Nutcracker productions.

8 Touring detersmid-sized organizations from growing and from developing localaudiences.
The amount of touring has declined in the past ten years, due in part tochanges in NEA funding, while there is still a small amount of regional touring by large performing arts companies. Some of these companies willhave fall and spring home seasons and tour their most successful programmes regionally, relying on guaranteed revenues from presenters rather than producing their own tours.
In summing up, the author suggests that, while the reports provide important information, more research is needed to track the accuracy of the predictions in Performing Arts and that it is still too early to determine whether medium-size arts organizations are caught in the middle.

Performing Arts in a New Era is available online in PDF format at http://www.rand.org.
Dancing With Dollars in the Millennium is available from Dance Magazine (Email: dancemag@dancemagazine.com), but is not available online.

Theatre Facts 2000 is available online in PDF format at http://www.tcg.org/index_content.htm

Reaffirming the Tradition of the New is available from the NationalPerformance Network http://www.npnweb.org, but is not available online.

ACENews - August 28, 2002, http://www.arts.uwaterloo.ca/ccm
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