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Lockouts highlight a need for change in the orchestra business

Thanks to the power of great music, the American orchestra has become a treasured institution. Threats to its well-being make its value all the more apparent. Yet orchestra disputes like those we’re seeing in the Twin Cities may be inevitable. Can we realistically expect the vestiges of a costly luxury created for 18th-century European aristocracy to fit comfortably within our modern capitalist democracy? When the orchestra occupies such a tiny patch of cultural turf, how can any faction agree to cede ground during a skirmish?

Both sides in the current disputes buzz about an outdated orchestra business model. Usually such complaints are too simplistic, according to Joseph Kluger, president of the Philadelphia Orchestra from 1989-2005. For management, Kluger says, changing the business model is code for cutting expenses, especially musician salaries, and for musicians it amounts to blaming management for bad financial planning.

Kluger, now a principal with the respected consulting firm WolfBrown, believes orchestras need to take bold steps toward serving a broader community and new organizational relationships.

According to National Endowment for the Arts research, attendance at U.S. classical music performances fell by 28 percent between 1982 and 2008. For American orchestras, box-office receipts have never covered expenses, but now they don’t even come close to the old industry benchmark. Kluger says the standard for ticket sales was once 50 percent of total expenses. In 2010, the Minnesota Orchestra reached only 28 percent. The St. Paul Chamber Orchestra’s lower-than-average 18 percent ratio reflects its strategic decision to slash ticket prices several years ago.

The Great Recession exposed two decades of box office decline that had been masked by a fundraising boom in the 1990s. The falloff, combined with shifting priorities in the philanthropic community, created what Kluger describes as a “perfect storm of changes” that has rocked orchestras in Minneapolis, St. Paul, Seattle, Atlanta and other cities.

Before the recession, the Knight Foundation invested heavily in promoting “major institutional change” among American orchestras. A 2003 Knight report [PDF] charged that some orchestras seemed to be “misusing scarce funds by spending too much to please a shrinking subscriber base and not enough to attract new audiences.” When Knight, Mellon and other foundations stopped funding orchestras, Kluger says orchestra stakeholders felt less pressure to change the way they do business. Now they ought to be feeling it again.

Don Lee
MinnPost photo by Jana FreibandDon Lee

Knight research [PDF] has revealed potential for audience growth. Reaching new patrons will depend on making the concert experience relevant to the 21st century. Part of that involves the music itself, an appeal to more eclectic, more fluid tastes than those traditionally associated with classical music. Another part of it involves the concert hall environment. A number of observers, Kluger included, believe “the ritual of the passive concert experience” needs to change. For the good of the music, patrons who consider the concert hall a kind of sanctuary must make room for other serious listeners who, as Kluger puts it, “want to be engaged with an experience that’s active.”

Our local orchestras are not deaf to these concerns. The Minnesota Orchestra is seriously invested in its new-music initiative, Future Classics. And the SPCO’s just-launched Liquid Music series presents alternative classical music in intimate, nontraditional spaces. The question is, will lessons learned there be applied to the rest of the orchestras’ programming?

In order to succeed artistically and financially, Kluger says orchestra stakeholders must forge a new kind of relationship. The current system is “incentivizing the board and management to pay everyone as little as possible and training musicians to fight tooth and nail to squeeze as much out of their employers as they can.”

Instead, he asks, why not build on the management model the SPCO created in 2004? Kluger envisions a “partnership-like financial relationship” among all orchestra staff members. If the organization ends the year with a budget surplus, everyone gets a bonus. “So in effect,” Kluger says, “the executive director and the development director are agents of the musicians. And the musicians are incentivized … to encourage the organization to be prudent.”

This might be the worst of times to propose such a scheme. But instead of focusing on the tension, those involved should see it as “an opportunity to restructure the emotional and strategic relationship among … the stakeholders of these institutions,” Kluger says.

If that sounds naive, he reminds all concerned that they agree about what’s most important: music’s power to transform lives.

Don Lee, a St. Paul media producer and writer, was executive producer of Performance Today at NPR and directed arts programming and cultural news coverage for Minnesota Public Radio.


Write your reaction to this piece in Comments below. Or consider submitting your own Community Voices commentary; for information, email Susan Albright.

Comments (12)

  1. Submitted by Greg Kapphahn on 12/03/2012 - 07:50 am.

    Who Benefits?

    If we back up a few paces, perhaps we can consider a question that seems to be ignored in the current debate over the current attempt to decimate Minnesota’s two orchestras.

    Who stands to benefit from what’s being demanded by management and from the policies being proposed to “change the business model” of arts organizations, nationwide?

    First and foremost, both of our local orchestras are not classic “businesses,” and hence do not fit any classic “for profit” business model. The goals of arts organizations are quite different from those of standard businesses. First and foremost in that they do NOT seek to make a profit, but only to provide an excellent product while procuring sufficient funding to support that product.

    When you bring in standard “business management”-types, in the false belief that they will do a better job of tracking expenses and help the volunteer organization to operate more efficiently, you generally get nasty unintended consequences:

    1) Those profit-oriented managers and board members simply can’t seem to set aside their original proclivities and, hence bring the extreme anti-worker bias so prevalent among American business management today into the volunteer organization,…

    2) CEOs with the current business-management mindset simply can’t reward themselves far too handsomely, raising their own salaries and benefits at every turn (no matter the deficits the organization is running, nor the debt it’s carrying, whether form external or internal borrowing). Just the average practicing alcoholic regards almost any occurrence as sufficient reason to have a drink, so the average CEO regards any day-to-day occurrence in their business as sufficient reason to grant themselves an increase in their compensation.

    Such business-management types (generally lacking empathy and compassion for anyone else) have no appreciation for the many ways that it serves the best interests of an arts organization to operate in less efficient ways.

    Consequently, rather than looking to standard business models and standard business management types for how to manage an arts organization, we need to look at other volunteer organizations to see which of them are supporting themselves while providing excellent services to the public,…

    then discover how they’re doing it, and adapt their example for our local circumstances.

    As we see from the sorry way American business (and business-oriented politicians) currently operate, the kind of creativity required to appropriately and effectively manage any local arts organization is almost NEVER found in those who manage businesses and serve on their boards. In the arts, one size definitely does NOT fit all.

    Consequently the needed new models for successfully operating arts organizations in this and future decades will NOT arise from the business community. It can ONLY arise from within those organizations themselves.

    Lacking that, operating arts organizations according to for-profit business models and putting for-profit business management types in charge, can and will ONLY result in what we now have in Minnesota: the destruction of those organizations (at least in part because those models value profit over product quality, and those managers value their own compensation above the well being and ultimate survival of the organization).

  2. Submitted by Hiram Foster on 12/03/2012 - 09:55 am.

    New music?

    Part of that involves the music itself, an appeal to more eclectic, more fluid tastes than those traditionally associated with classical music. ”

    I have talked a lot about the need for new ideas and innovations, although you might notice I personally don’t have any. In this article, I do welcome the attempt to provide some, but what I would point out is that in reality, the new music is what people don’t like about orchestras. We tend to get the eclectic stuff elsewhere, and mostly what we want from orchestras when they are performing Brahms and Beethoven is the summertime Rodgers and Hammerstein repertoire.

    Speaking as a fogy, what the orchestras need to do, is find a better way to sell, to provide access to, what they do well and what the audiences want.

  3. Submitted by Karen Sandness on 12/03/2012 - 10:54 am.

    The decline of music education in our schools

    and in the broadcast media has taken its toll on the classical music scene. Even many churches have moved away from traditional hymns and organ music and use pop-influenced “praise music” and electronically amplified bands during their services.

    I’m old enough to remember when Leonard Bernstein’s Young People’s Concerts were broadcast on one of the big three networks on Sunday afternoons (but I’m not old enough to remember which network it was.) Those and similar programs (I also recall opera in English and ballet on Sunday afternoons) taught a generation *how to listen.* Now classical programming is confined to the PBS/NPR ghetto, and the NPR services in some states have switched their formats to eliminate classical music completely.

    Yet young people are not necessarily turned off to classical music. Witness all the young musicians on From the Top. Witness the popularity of film scores, which are usually classical in style. I’ve even heard music by Copeland, Fauré, Gershwin, Prokofiev, Orff, and Mozart used in TV advertisements.

    I know from my own experience that one needs to start with small, easily digestible bits of classical music, not Mahler symphonies. Perhaps orchestras need to send more small ensemble “missionaries” to schools and other venues where young people are, not necessarily imposing classical concert hall etiquette, but explaining in simple terms how the piece is structured and following up with participatory activities, such as having the students improvise dances to the music or dividing the listeners into as many sections as there are instruments and having them raise their hands when “their” instrument picks up the theme or stands out prominently.

    The musical missionaries could play in coffee houses and restaurants, irrespective of whether anyone seems to be listening, concentrating on pieces that have folk or jazz ties or that have been featured in movies or advertisements. Note that aspiring pop, rock, folk, and jazz musicians don’t just wait for the audiences to come to them. They play in whatever venue will have them and try to interact with their audiences. They have websites and offer free downloads to entice listeners to buy full albums.

    Going even younger, musical organizations could distribute CDs of slow, quiet music for kindergartens and daycare centers to play during nap time.

    The current mainstream audience for classical music was built up in a much friendlier, less complicated environment. If orchestras are to prosper, they will have to reach out and go where the potential audiences are.

    • Submitted by Jeff Kline on 12/03/2012 - 11:09 am.


      Music isn’t seen as a “Tangible asset” in someone’s education. Why? who knows. Facts are facts and it’s well established that kids with a musical understanding begin to excel in math among other things.

      Well put ma’am!

  4. Submitted by Jeff Kline on 12/03/2012 - 10:55 am.

    Many have said this.

    One thing that was stressed to me back in the early days of my “musician” career was this;

    “Don’t quit your day job!”

    It wasn’t a slam or telling you that you were not good. It stands to reason the music business is fickle but we have many people who do not have a lot of “penache'” to hold some form of traditional employment. And; so they try and rely on music exclusively.

    I have been blessed to work with many professional and amateur musicians and entertainers over the years. They have commended my ability to keep my “Day Job” yet be able to show up for sessions and gigs. I get paid based on my performance ability and quality which has always been above par.
    I paid my way through technical college doing this. Now I enjoy my occasional gigs and appearances but I do not rely on it.

    Maybe it’s time for these folks to realize this and go find a day job.

    • Submitted by Greg Kapphahn on 12/03/2012 - 05:24 pm.

      When You’re Acknowledged to be Among the Finest Musicians

      in the world, “musician” IS your day job.

      But that’s not to say that many of these fine musicians do not also work as music teachers for up-and-coming young musicians throughout the metro area.

      What you’re suggesting is akin to telling any of those who are among the most popular and talented musicians in any genre you care to name that they should not expect to make a living at music and that they should “keep their day jobs.”

      After all, these are NOT the equivalent of local garage or bar bands, they’re among the best in the world.

  5. Submitted by Hiram Foster on 12/03/2012 - 11:25 am.

    Reaching out

    Something I do support is reaching out to younger audiences. I get solicitations from the orchestra occasionally, asking for money to support those kinds of programs. I do think that rather than being something extra the orchestra does, those kinds of programs should be seen as integral to the orchestra’s mission. But I don’t see such programs as any kind of panacea either.

  6. Submitted by james anderson on 12/03/2012 - 03:05 pm.

    The real world orchestra

    The musicians need to realize that they are employees. Talented but employees .

    • Submitted by Greg Kapphahn on 12/03/2012 - 05:29 pm.

      No, They’re NOT Just Employees

      They’re the REASON the entire organization and Orchestra Hall exist!

      It is the management and the board who are employees of the orchestra, for the sole purpose of providing the organizational structure necessary for the Orchestra to function well.

      And why do some of us seem to think that being an “employee” means you are a lesser class of human being then those titans who breathe the magical air of the board room and the head office?!

      • Submitted by Michael Pigott on 12/05/2012 - 03:54 pm.

        “They’re the REASON the entire organization and Orchestra Hall exist!”

        No, the music itself is the reason the entire organization and Orchestra Hall exist. The management and board are there to see to it that the public can engage with the art form, in this case classical music. These statements do nothing to elevate any party–management, musicians, board members–over any other. The music is (or should be) above any constituency.

        To say that the musicians are the reason the org and hall exist, and that the management and board are ’employees’ of the orchestra is, well, daft.

  7. Submitted by Hiram Foster on 12/03/2012 - 04:23 pm.


    In at least one Young People’s Concert, Bernstein did go with Mahler:

  8. Submitted by Pamela Brown on 12/08/2012 - 09:42 pm.

    Thank you, Don Lee

    In all of the angst and distress of the last two months plus over the lack of communication between players and management of both the MO and SPCO, it is refreshing to hear a voice of sanity. This paradigm — this ‘business model’ has failed everyone; and in this case, it has failed the players who trusted management to look out for them. How is this situation any different than, for example, what Mozart had to suffer over 200 years ago? One can easily envision the same sort of frustration in the voices of the players and in the agonizingly honest letter of Maestro Vanska.

    The NYPhil began as a player-coop. It is not impossible to think outside of the box. Nobody expected the players to have to be money-crunchers and financial analysts as well as musicians, but they have stepped up to the plate and are looking at more than just having their needs met. They want to know how the mission statement of the MO was changed behind their backs, and they want to know exactly where the money went. They will never relax into complacency again. All this struggle can be used for good for the future — to find alternatives that work for everyone.

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