Chicken Little Syndrome

Or, how to ignore scaremongers and build for the new normal in the arts

Don’t be this guy ….

If you follow the classical music industry, you’ve likely gotten used to the gloom and doom of dwindling audiences, slashed budgets, and overall uncertainty of the last few decades. The sky is falling, people say.

In opera, the atmosphere has noticeably darkened in the last few months. But as a former opera singer who has spent a decade now in the corporate sphere, while advising arts organizations and serving on arts boards, I don’t buy into the fear.

That might be surprising, considering the news. Among the major players, the Metropolitan Opera announced a $40M draw on its endowment alongside a noticeable shift in artistic strategy for the second straight year; LA Opera pulled out of premiering a Met co-commission after years of development; and Anthony Freud decided to leave Lyric Opera Chicago before his current contract is up. On the regional side, companies in Tulsa, Syracuse, Maryland, and Chautauqua have either closed up shop or taken new, unrecognizably smaller forms (Michael Andor Brodeur does a great job discussing these changes and more in a Washington Post piece from this past weekend).

In my social media circles, the response has been loud. “This is what happens when you schedule too many Carmens/abandon the warhorses/update the Traviata to the 70’s/perform dusty museum productions,” they say. And while their fingers point blame in many directions, their solution is the same: “We need leaders who understand the art form and have a new artistic vision.”

Unfortunately, that’s wrong. Well, not all wrong. It’s just a small part of the full answer — an answer that does paint a more hopeful picture for opera.

… but also, don’t be this guy (dog).

Three Pillars: Art, Business, and Audience

First off, cancel your “build it and they will come” mentality. In Field of Dreams, Kevin Costner was haunted by ghosts of the old greats, and most people who think only higher artistic standards will save the art are similarly haunted. Great art won’t solve the problem alone.

Not-for-profits are successful when they meet their mission while balancing services provided, financial responsibility, and customer needs. For a homeless shelter, this could be housing, food, and clothes; donations, grants, and government contracts; and ensuring that current needs are met (e.g., focusing on warm housing during a New England winter).

For arts organizations, these map out to artistic planning, business planning, and audience needs, which used to operate in consistent, multi-year cycles but have increasingly shortened. After the pandemic, they’ve gone from loosely correlated (at best) to now completely out of sync:

• Artistic cycles: During the 20th century, opera houses moved from announcing singers and even productions with short notice to planning productions — and locking in singers — 5 years or even more in advance. In 2018, The Met first announced commissions by Miss Mazzoli, Mason Bates, and Jeanine Tesori, which are supposed to finally hit the Met in 2024, 2025, and 2026 respectively. No one can sustain 5 year commitments any more, even the heavy hitters, which is why LA pulled out of the Bates opera and the Met shifted its repertoire strategy (again). Most companies have recently moved to short lead-time producing and casting out of necessity, but as scramble rather than a proactive artistic planning process.
• Business cycles: While artistic planning elongated until it snapped, financial trends in the arts can only be called volatile. Decades ago, the business cycle was stabilized by reliably strong subscriptions and a donor class which prioritized the arts in their giving. Changes in philanthropic priorities and the shift from subscriptions to single tickets made income more volatile year over year, and cash flow is less consistent on a month to month basis.
• Audience cycles: Audiences no longer attend institutions out of habit, duty, or allegiance to a genre. It’s a show-specific world, where you have to articulate “why this performance” and “why now”. Once you do that, you then have to deliver on your promises and give a great experience. That means being honest with your audience (no, it’s not just like Rent), and programming shows that match audience needs (rather than would you ‘should’ program). It also means ensuring the non-artistic parts of the evening are as simple as possible. Are the ushers polite and helpful? Is parking easy and/or included[1]? Is intermission long enough for all the women to use the restroom?

Organizations stumble when they bring in a leader who excels in one of these areas and also believes it to be the most important. That’s when you get an artistic visionary who runs up operating deficits; a financial leader who balances budgets but alienates audiences; a development leader who has their pulse on donor needs but doesn’t know how to produce the art to meet it.

Frankly, nearly all[2] American arts organizations are currently in a turnaround situation. The first rule of a turnaround is to stabilize the core business. That means stabilizing the artistic, business, and audience pillars so strategic planning cycles incorporate each in tandem. In LA Opera’s announcement, CEO Christopher Koelsch directly referenced rebalancing the artist pillar with the stabilizing business/audience pillars: “The audience is back and both earned and contributed revenue is stable. The big difference is the cost structure is not pre-COVID”.

*projected but shortened due to COVID; ** no season; *** through Jan 2024. Publicly announced data.

While Met’s moves are more dramatic and on a larger scale, they’re a correction to larger artistic planning changes made last year. For public companies, a strategic shift in reaction to a poor earnings call can be seen as decisive leadership. It should be the same for arts organizations, if the shift correctly aligns those three pillars. I’m not saying these leaders are free from blame — many took to long to react to old trends — but I want to give credit when needed changes are made. Particularly when sales are nearing pre-pandemic numbers.

Looking forward

So, what can organizations do? I see a few focus areas, on which I intend to write full-sized pieces over the next few months. But, for now:

1. Embrace change. Classical music and opera attract an outsized share of “small c” conservatives: people for whom the art form is not only a callback to less complicated times, but also a comfort in its consistency year over year. Boheme has all the same notes as at its premiere. However, companies of any type only survive because they are willing to change, and more importantly, they make change a part of their DNA. No one succeeds with poor photocopy of a prior success.
2. Think local. All live arts companies make decisions on local market specifics. What works in Dallas won’t translate to Philadelphia (hell, it won’t even translate 30 minutes down the road to Fort Worth). As tempting as it may seem, it means you can’t lift and shift solutions from your peer organizations. Leaders have to engage as heavily with other local arts groups as they do with their friends at the Opera America conference.
3. Focus on higher-ROI activities. Stop producing high profile/low-grossing productions that are more successful in raking in headlines (or industry kudos) than bringing in revenue. Niche, small-scale productions are useful when used sparingly in a season, as they can galvanize some sources of funding (certain grants or donors) that won’t fund Carmen. Small shows may not break the bank, but they won’t grow your audiences, and you’ll be stuck producing small shows for ever smaller audiences. “Return on investment” is hard to embrace in an industry where performances can’t turn a profit (almost categorically), but the mindset must prevail.
4. Build the institutional brand. Didn’t I say earlier that people aren’t loyal to institutions? I did. But, audiences are loyal to brands. They won’t attend you because you are “the opera” but because you perform shows that they always enjoy. Define who you are beyond ‘what you do’, and hit that drum consistently with your audience so they’ll seek out your shows.
5. Build a real ‘company’. CPG (consumer packaged goods) companies like Hershey are able to flexibly adapt their product to customer trends because they have a fixed set of products (or SKUs) that they ramp up or down based on demand while also integrating a smaller handful of new products. The operatic equivalent is building a more consistent “company” of singers who can be engaged more frequently, lower travel and housing expenses, and build hometown allegiance. Would you go to an NFL game if your team’s players changed every Sunday? During the pandemic, Atlanta Opera showed how this might succeed at the regional level while maintaining impressive artistic standards.
6. Present an experience, not a show. People are seeing far fewer movies in theaters, but are willing to pay hundreds or thousands to see live concerts. As more people work remotely and have content at their fingertips, unamplified live arts are in a unique place to become destination entertainment — if you curate and sell the experience correctly.
7. Customer Long Term Value (LTV) reigns over revenue. Opera isn’t for everyone, just like football, wine tasting, and knitting aren’t for everyone. This shouldn’t prevent expansion to new audiences, but force leaders to target audiences which are more likely to attend and more likely to grow in their value to your organization over time. In fact, audiences for the performing arts are getting younger. Just ensure you’re reaching out to “higher return” new audiences (preview for next time — Millennials and Gen Z hit heavier here than Gen X).

Mr. Brodeur is right to see change on the horizon in his Washington Post article. The arts landscape will look very different in 10 years, with many beloved companies either unrecognizable or gone. However, I don’t think that’s a bad thing. While we should try to keep the art form alive (hello, UNESCO heritage[3]), opera doesn’t have an inalienable right to exist just because connoisseurs want it to. And it certainly shouldn’t be kept on life support.

So don’t be Chicken Little, who got everyone so wrapped up in unfounded fears that they neglected to see the real danger of the fox in the henhouse. Here, the danger is not poor artistic standards or audiences aging slowly towards death. The danger is continuing to produce art without adapting financial or business models to present day realities.

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Dan Kempson is a Senior Principal at ghSMART, a global leadership advisory firm, where his clients include Fortune 500 corporations and major not-for-profit institutions. He had an international, Grammy-nominated career as an opera singer, is a pro bono advisor to arts leaders, and is a Trustee of the Philadelphia Ballet. All opinions are his own and not those of any organization with which he is associated.

1. A private research study for a top 10 US symphony discovered that the variable closest correlated to a new audience member returning for a second show was how easy parking was in the arts complex’ garage that night.
2. In opera, Atlanta Opera and Washington National Opera have both bucked the trend and built new avenues to stable growth. While not all are transferrable to other organizations (again, the arts is a local business), there are lessons to be learned.
3. Technically, the UNESCO Cultural Heritage designation only covers “the practice of singing opera in Italy”.