US Orchestras loose subscribers and audiences

The League of American Orchestras has released Orchestra Facts: 2006-2014, the organization’s first comprehensive longitudinal study of American orchestra finances and operations.

Survey says: US orchestras loose subscribers and audienees

Survey says: US orchestras loose subscribers and audienees

Using an extensive variety of organizational and external data sources, the study depicts the enormous breadth and scope of the American orchestra field, along with the complexities and resiliencies inherent in the art form’s business model. With its focus on the nine-year period from 2006 to 2014, including topline trends, five-year trends, and one-year snapshots, Orchestra Facts examines the effects of the recent recession, as well as broader trends around audience attendance, orchestra finances, and accessibility.

Orchestra Facts: 2006-2014 reveals a remarkable breadth of activity and commitment of resources on the part of orchestras in service to their communities,” said League of American Orchestras President and CEO Jesse Rosen. “Our first-ever longitudinal study provides an authoritative fact base for analyzing orchestras’ finances and operations, as well as new metrics for understanding orchestras’ education and community engagement activity.” The report finds that the scope and scale of the orchestra field in the United States is vast: in 2014, 1,224 orchestras contributed $1.8 billion to the U.S. economy and attracted a total audience of nearly 25 million. Two out of every three orchestras operated with annual expenses budgets of under $300,000. Cost barriers traditionally associated with attending orchestra performances are coming down: the number of free concerts has increased, while the cost of purchasing paid-for tickets fell.

 

An 18% growth in the number of households subscribing shows that demand for subscriptions is still growing, even if spend per subscriber is down. Overall, audiences declined by 10.5% between 2010 and 2014, broadly in line with other performing arts sectors. However, audiences for classical series concerts declined by 5.5% (corresponding roughly to a 3% decline in the number of classical series performances offered). The report also finds that orchestras’ work continues outside the concert hall through a wide array of education and community engagement activities for diverse audiences.

Generally, the report confirms recession recovery for the field as a whole, but individual orchestras may have different experiences. The study also illustrates the complexity of the orchestra business model as orchestras balance multiple forms of earned, contributed, and investment revenue. Looking at Change in Unrestricted Net Assets (CUNA), defined as the difference between unrestricted income and total expenses, the proportion of orchestras reporting deficits dropped from 40% in 2010 to 18% in 2014.

 Report Highlights*:

See report’s Key Findings (pp 4-5) and Conclusions (p 20) sections for more details.

Download the Full Report Here

 

For the first time, this report publicly reveals a detailed picture of the scope and scale of the orchestra field in the United States:

  • In 2014, the orchestra field contributed $1.8 billion to the U.S. economy and attracted a total audience of nearly 25 million.
  • That same year, there were 1,224 U.S. orchestras, distributed widely across all 50 states, and two out of every three orchestras operated with annual expenses budgets of under $300,000.

Orchestras perform, but also teach, lead, facilitate, and train.

  • Their work drives a vast array of education and community engagement (EdCE) activities.
  • A segment of the report analyzes survey responses from 98 orchestras EdCE activities: these 98 orchestras alone reported 19,000 EdCE performances, musical activities, and events, with 2.1 million people participating in these EdCE events.
  • Two thirds participated without charge.
  • Thirty-eight percent of the EdCE participants were African American, Hispanic/Latino, Asian American/Pacific Islander, or American Indian/Alaskan Native. Sixty-two percent were white.

Cost barriers traditionally associated with attending orchestra performances are coming down:

  • Between 2010 and 2014, the number of free concerts increased, while the cost of purchasing paid-for tickets fell.

Orchestras find themselves at a moment of transition:

  • 2013 saw a significant shift in the traditional orchestra business model as – for the first time – income produced by single ticket and group sales was higher than that earned from subscription revenues.
  • The subscription model remains important: an 18% growth in the number of households subscribing shows that demand for subscriptions is still growing, even if spend per subscriber is down.
  • Overall, audiences declined by 10.5% between 2010 and 2014, broadly in line with other performing arts sectors.
  • However, audiences for classical series concerts declined by 5.5%, corresponding roughly to a 3% decline in the number of classical series performances offered.
  • The stability of contributed income through the recession years and the large number of small gifts made to orchestras (around 75% of the gifts made by non-trustee individuals were under $250) indicate a broad base of continuing community support for – and appreciation of – orchestras’ work.

The orchestra business model is complex but resilient:

  • Orchestras depend upon a complex portfolio of revenue sources that includes multiple forms of earned, contributed, and investment income.
  • Orchestras successfully maintained contributed income levels through the recession while containing growth in expenses.
  • Many orchestras rely on investment income, though this makes them more vulnerable during leaner times.
  • Between 2006 and 2014, total asset value increased by 4% while liabilities decreased by 7.5%, having peaked at the recession’s height. Consequently, net assets grew at a rate exceeding inflation by 6.6%.
  • In general terms, these measures indicate improved organizational stability over time, despite the impact of recession on the field.
  • Looking at Change in Unrestricted Net Assets (CUNA), defined as the difference between unrestricted income and total expenses, the proportion of orchestras reporting deficits dropped from 40% in 2010 to 18% in 2014.
  • It’s important to note that the report confirms recession recovery for the whole field; individual orchestras may have different experiences.

Orchestra Field-wide 2014 Snapshot: 1,224 orchestras in the NCAR and OSR data sets for financial year 2013-14

Orchestra Field 2006-14, 9-year Trends: The 547 orchestras with annual expenses of $50,000 or more that submitted data each of the five financial years from 2005-06 to 2013-14

The OSR data set was also exclusively analyzed in the following two ways: OSR2014 Snapshot: The 107 League member orchestras participating in the Orchestra Statistical Report for financial year 2013-14;  OSR 2010-14, 5-year Trends: The 65 League member orchestras participating in the Orchestra Statistical Report for each of the five financial years from 2009-10 to 2013-14

Figures in the report are adjusted for inflation.

Orchestras surveyed include both professional and semi-professional orchestras, but do not include school, college, or military orchestras.

Youth orchestras are partially represented in the data sets, and are identified by footnotes throughout the report.

Read the full press release here.

League of American Orchestras Releases Five-Year Strategic Plan 2016 – 2020

The League of American Orchestras’ Board of Directors has announced the organization’s blueprint for the future: Creativity, Engagement, Impact: The League of American Orchestras’ Strategic Plan, 2016-2020 http://www.americanorchestras.org/strategy). The plan comes at a moment of great possibility in the orchestral field, as orchestras are embracing the opportunities presented by the current environment with vigor and ingenuity.

LAO-Logo

“Orchestras are keenly aware of profound changes in their environment,” said Jesse Rosen, the League’s President and CEO. “Building upon the field’s momentum, the five-year Strategic Plan addresses a wide array of critical issues and internal and external field challenges in response to broad social, demographic, and technological changes, affirming the League’s vital role as a catalyst, convener, and source of knowledge.”

Synthesizing feedback from member orchestras and other stakeholders, including musicians, funders, external partners, and League board and staff, the plan identifies five outward- and inward-focused strategic priorities:
• Advancing the orchestral experience
• Developing the orchestral field
• Better serving members
• Strengthening the League’s business model
• Growing the League’s capacity

The organization’s mission and vision have also been refreshed. The mission is now: To advance the experience of orchestral music, support the people and organizations that create it, and champion the contributions they make to the health and vibrancy of communities. The vision is now: The orchestral experience is shared by all and supported by artistically vibrant, robust, and civically engaged organizations; and the League is an indispensable leader, resource, and voice for the orchestra community and its value to the public.

The League’s previous plan, Supporting Orchestras in a New Era, guided the League through a large-scale global economic recession. Since then, the field has pushed forward on a variety of fronts, and the new plan addresses such critical issues as the need for diversity, community impact and relevance, public perception, technological advances, and fiscal health. Internal and external challenges identified by League members and stakeholders are also assessed in the plan, such as music education, demographic change, changing patterns of philanthropy, and changing patterns in the use of leisure time.

Rosen commented, “Looking from 30,000 feet at the evolution taking place, orchestras continue to strive for excellence in performance, but now bring equal attention to the nature of the orchestral experience itself: the interplay with different audiences; synergistic and authentic engagement with communities; expanding roles of musicians, composers, and conductors as ambassadors, advocates, and educators; and increasing activity in lifelong learning and civic participation.

“The League will embrace our commitment to support orchestras and promote public understanding of their role in civic and community life. We will lead our members in collectively advancing, articulating, and advocating for the essential experience that only orchestras can provide.”

The planning effort was led by a strategic planning task force of the Board of the League of American Orchestras. The task force was chaired by Steven C. Parrish, vice-chair of the Board. The process was facilitated by AEA Consulting.

Note:
• Find a brief overview of the plan here: http://americanorchestras.org/strategyglance
• Find an abridged and full version of the plan, both of which contain the President’s introduction, here: http://americanorchestras.org/strategy

Read the full release here.

US Orchestras: Ways to Enhance Subscriber Relationships

American Orchestras Need to Get “Sticky” to Meet Challenges: A study from Oliver Wyman, “Reimagining the Orchestra Subscription Model,” commissioned by the League of American Orchestras, argues that American orchestras can meet their challenge to retain subscribers and meet revenue needs by exploring methods used in other industries (e.g., retail, grocery, fitness), that build “stickier” relationships with customers.

LAO-Logo

There has been a shift away from subscriptions and toward single purchasing. Subscriptions are a key source of revenue, so the shift presents orchestras with difficult choices. Some larger orchestras have offset declines by increasing prices, but that strategy is unsustainable and the tradeoff may be reaching a break point that could trigger a far sharper drop in revenues. The report recommends that the current subscription model must be revitalized and it identifies strategies that orchestras of all sizes can use to increase customer loyalty and participation.

The data-rich study – the first of its kind for American orchestras – draws on ten years of data from four million customers across 45 orchestras of varying sizes and a profile and preferences survey of
4,000 people who attended an orchestra concert in the last five years. The final recommendations
are informed by a dynamic market simulation that tested the willingness-to-pay of 1,000 people making 10,000 purchasing decisions in order to reveal the relative attractiveness of various package features.

Some interesting facts uncovered by the study:
• Satisfaction remains high: Consumers do remain broadly satisfied with the orchestral concert experience – 90% of each patron type is satisfied with their orchestra-going experience and subscribers are the happiest with 77% reporting they are “very satisfied.”
• Consumers are not abandoning the orchestra for other art forms or entertainment options; but they are disenchanted with traditional subscription models.
• Millennials are not as price sensitive as many have assumed. To attract them, orchestras should consider expanding their use of social media, apps, and “bring-a-friend” programs that rely on the high level of interconnectedness of those young consumers.
• It’s about the relationships: Orchestras should explore methods used in other industries (e.g., retail, grocery, fitness), that build “stickier” relationships with customers.
“We are grateful to Oliver Wyman for their contribution to our understanding of subscription dynamics. The study provides a fact-based platform to support the experimentation and innovation taking place at orchestras today,” notes League of American Orchestras President and CEO Jesse Rosen.

Partha Bose, Partner at Oliver Wyman, sees the report as further evidence of Oliver Wyman’s deep commitment to the communities in which the firm works. “The recommendations contained in this report combine deep analytical rigor and sensitivity to the unique challenges of the entire range of America’s orchestras, large and small. They are cultural mainstays of the cities and towns in which they are located, and we hope the report helps them to flourish and to continue to enrich all of our lives.”

The report can be found at http://americanorchestras.org/images/stories/ReimaginingtheOrchestraSubscriptionModel2015.pdf and at http://www.oliverwyman.com/insights/publications/2015/nov/league-of-american-orchestra.html.

A version is also available on the iTunes App Store at https://itunes.apple.com/us/app/id997069338?mt=8&ign-mpt=uo%3D6.

Orchestras tell their story: Why are we relevant for our community?

The Orchestra Story Bank is a resource created by North American orchestras and the League to show the many ways in which orchestras serve communities, providing the first-hand perspective of musicians, families, and care-takers.

LAO-Logo

Through the power of music, collaboration, and collective action, orchestras serve the public in many ways. Just as the needs of one community differ greatly from those of another, each orchestra develops programs, partnerships, and performances that provide unique value to their community.

Take a look at the examples on the Story Bank and start telling your own orchestras’ stories. There are dozens!

International Conferences coming up soon

Conference year 2014 has taken up speed.

The 3rd International Orchestra Conference is going to start on Sunday, February 23, 2014, in Oslo (Norway). Until February 26 managers, musicians, unions and arts organization from around the globe will discuss topic problems of orchestras, health issues, as well a labor conflicts. More information

 

International Orchestra Conference 2014

International Orchestra Conference 2014

Artist managers and agencies will gather for the 24th International IAMA Conference in Milton Court, London (UK) from April 10 to 12, 2014. The title of this conference: “Time for change”. More information

 

The organizers of the successful classical music expo Classical:NEXT announced the 2014 edition: the international professionals’ forum for classical and art music will take place from 14 until 17 May 2014, a little earlier in the calendar than the first two editions. The main venue will again be the Austrian Museum of Applied Arts (MAK) in Vienna. More information

 

The League of American Orchestras Conference 2014 will be held June 4–6, 2014, Pre-Conference June 2 to 4 Seattle, Washington. Conference will take place at the Westin Seattle, 1900 Fifth Avenue, Seattle, Washington, 98101. The Seattle Symphony is co-host of Conference 2014. More information

LAO Conference in St. Louis looks ten years ahead (June 18-20, 2013)

“It’s time to imagine what orchestras will look like in ten years. It’s time to put on yout thinking cap. It’s time to see your colleagues. It’s time to hear the incredible St. Louis Symphony. Now is the time to build your future. Find your opportunity and inspiration at Conference 2013.”

LAO Conference - Round table discussions

LAO Conference – Round table discussions

This is the message from the League of American Orchestras website announcing the National Conference in St. Louis next week. From June 18-20 with a pre-conference from June 16-18 managers, board members, musicians and many others from the music industry will get together in Missouri.

You can’t make it to St. Louis? No problem! The League has announced to put material from key Conference session online.

Upcoming events and conferences

A couple of interesting national and international events and conferences are coming up for the orchestra and arts management sector:

The China Symphony Development Foundation is preparing the National Conference 2013 in Xiamen, April 16-18.

The 23rd IAMA (International Artists Managers Association) Conference will take place in Vienna Konzerthaus from April 25-27. Title of the conference: “Innovating Tradition”.

Classical:NEXZ

Classical:NEXT

Second edition of the fresh and innovative conference format Classical:NEXT 2013 is announced from May 29 to June 1 in Vienna, too. Classical:NEXT is a new, annual event that addresses head on the challenges facing the international classical and art music community, both in its entirety and within its various sectors. Classical:NEXT also offers an ideal opportunity to promote new talent, new creative ideas and future-oriented business practices.

The League of American Orchestras National Conference 2013 will be in St. Louis, June 18-20, with pre-conference seminars June 16-18.

The date and placed for the next National Conference of the ABO (Association of British Orchestras)  have already been announced: The 2014 Conference will be held in London from January 29-31, hosted by London Symphony Orchestra in association with the Barbican.

Finally: The 3rd International Orchestra Conference is to be prepared in Oslo (Norway) for 2014 , April 24 -26.