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The Perilous Life of Symphony Orchestras

The Perilous Life of Symphony Orchestras

Robert J. Flanagan
Copyright Date: 2012
Published by: Yale University Press
Pages: 224
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  • Book Info
    The Perilous Life of Symphony Orchestras
    Book Description:

    This book analyzes the economic challenges facing symphony orchestras and contrasts the experience of orchestras in the United States (where there is little direct government support) and abroad (where governments typically provide large direct subsidies). Robert J. Flanagan explains the tension between artistic excellence and financial jeopardy that confronts most symphony orchestras. He analyzes three complementary strategies for addressing orchestras' economic challenges-raising performance revenues, slowing the growth of performance expenses, and increasing nonperformance income-and demonstrates that none of the three strategiesaloneis likely to provide economic security for orchestras.

    eISBN: 978-0-300-17795-4
    Subjects: Business, Music

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
    (pp. vii-x)
  4. CHAPTER 1 Surpluses, Deficits, and Symphony Orchestras
    (pp. 1-5)

    On February 26, 2008, the New York Philharmonic Orchestra, the oldest symphony orchestra in the United States, played a remarkable concert in Pyongyang, the capital city of North Korea, as part of an effort to use cultural exchange to thaw diplomatic relations between the two countries. The program included the national anthems of each country, the prelude to act 3 of Richard Wagner’sLohengrin, Antonín Dvořák’s “New World” Symphony, and George Gershwin’sAn American in Paris. The encores included compositions by Georges Bizet and Leonard Bernstein, along with a popular Korean folk song. Whatever the ultimate diplomatic effects, the concert...

  5. CHAPTER 2 Why Are Surpluses So Difficult to Maintain?
    (pp. 6-18)

    This quote from aNew York Timesarticle could have been written in the early years of the 21st century. As it happens, it appeared a century earlier in a review of the financial results of the 1902–3 concert season (Aldrich 1903). In it we can see a number of themes that remain salient today. First, no symphony orchestra earns enough from performances to cover its performance expenses. Second, that fact is not likely to change in the foreseeable future. Third, the survival of orchestras depends on the resources provided by “guarantors.” And, finally, the hope persists that building...

  6. CHAPTER 3 Cost Disease or Business Cycles?
    (pp. 19-30)

    This Associated Press dispatch, bearing the headline “Recession Closes 10 % of U.S. Arts Organizations,” signals how recessions undermine the economic security of symphony orchestras and other arts organizations. As personal and business incomes fall in the face of layoffs, rising unemployment, reduced work hours, and declining sales, orchestras suffer losses in both performance and nonperformance income. Sales of concert tickets and recorded music wax and wane with variations in personal incomes. And just when orchestras require more nonperformance income to pay their bills, orchestra patrons lack the resources to provide it. Of course, when real incomes subsequently recover during...

  7. CHAPTER 4 Snapshots of Symphony Orchestra Finances
    (pp. 31-39)

    While it should now be clear why orchestras cannot survive as profit-seeking organizations, we cannot understand the varied economic success of nonprofit symphony orchestras without learning more about where their money comes from and how it is spent. That is the task of this chapter, which describes the flows of revenues and expenses for orchestras in the United States and provides clues about how these economic flows may differ for orchestras in other countries. The chapter leads to identification of three broad strategies available to orchestras in their quest for financial balance.

    All the highly visible ways in which symphony...

  8. CHAPTER 5 The Search for Symphony Audiences
    (pp. 40-62)

    Raising performance revenues is largely a matter of building and retaining audiences and pricing tickets to increase revenues, the topics of this chapter. These goals must be easier to state than to achieve, since the evidence in chapter 3 showed that performance revenues have fallen further and further behind performance expenses over time. This chapter shows how the policies of orchestras, the economic characteristics of local communities, and competition from other performing arts all play a role in the search for larger audiences

    Much of what we know about performing arts audiences in the United States comes from surveys conducted...

  9. CHAPTER 6 Artistic and Nonartistic Costs
    (pp. 63-90)

    Most people who attend a symphony orchestra concert do not realize that the musicians, guest soloists, and conductors who deliver the performance account for little more than half of the orchestra’s expenses. Nor do they realize that the share of artistic costs in orchestra budgets slowly declined in the late 20th century. But because artistic costs remain the largest component of symphony expenses, even small increases can have a notable impact on the overall financial balance of orchestras.

    Symphony patrons also might be surprised at the variation in pay among an orchestra’s musicians. A violinist in one major symphony orchestra...

  10. CHAPTER 7 Government Support of Orchestras
    (pp. 91-111)

    The relentless advance of costs has made it increasingly difficult for wealthy individuals to cover the growing operating deficits of symphony orchestras. In response, orchestras have attempted to adjust to the diminishing role of wealthy angels. First, they gradually developed fundraising operations that sought a much broader base of private support. The revenue modern orchestras now receive from their private fundraising activities will receive attention in the next chapter and in chapter 9, which addresses building and managing endowments.

    Symphony orchestras and other performing arts organizations have also increasingly sought government support for their activities, but there has been far...

  11. CHAPTER 8 Private Support of Orchestras
    (pp. 112-123)

    “The symphony orchestras were the first professional nonprofit arts groups in the United States to have patrons.… Long before the graduated income tax became a major incentive for private philanthropy, symphony orchestras were supported by the rich who wished to put their fortunes to good uses in public settings” (Ford Foundation 1974, p. 14). When a few committed patrons could cover deficits, professional fundraising operations were not necessary. As recently as the mid—960s, many performing arts organizations had no systematic fundraising activities (Baumol and Bowen 1966, p. 324).

    Over time, the relentless toll of increasing performance deficits required a...

  12. CHAPTER 9 Symphony Orchestra Endowments and Governance
    (pp. 124-143)

    When symphony orchestras encounter financial difficulties, attention focuses on building audiences, controlling expenses, raising contributions, concert programming, the quality of the music director, and so on—in short, virtually all aspects except the performance of the board of trustees, the group that ultimately has responsibility for oversight of the organization’s economic health. One of a symphony board’s most important tasks is to build and manage the orchestra’s endowments to provide a reliable long-term source of annual support, and well-functioning symphony boards are successful in this endeavor. The following report summarizes what can happen when the board of an arts organization...

  13. CHAPTER 10 How Do Other Countries Support Their Orchestras?
    (pp. 144-170)

    Symphonic music and symphony orchestras emerged in Europe during the 17th century. Courts and churches financed the earliest orchestras, which accompanied operas and sacred texts composed for performance in those venues. There was a dark side to supporting this musical establishment: “Hand in hand with the brilliant development of court and church music went the inquisition and the ruthless exploitation of the lower classes by means of oppressive taxes” (Bukofzer 1947, pp. 394—95).

    By the early 18th century, the original sponsors of orchestras became less able to cover the ever-increasing costs of a stable of musicians and composers. Musical...

  14. CHAPTER 11 The Economic Future of Symphony Orchestras
    (pp. 171-186)

    The “perilous life” of orchestras noted in this book’s title signals the tension between significant artistic achievements and the challenging economic circumstances that most orchestras live with. Symphonic music probably never has been performed better than today, yet orchestras at all levels of achievement confront ongoing economic distress. This book has tried to provide an up-to-date diagnosis of the economic challenges and an appraisal of the main strategies for addressing them.

    The diagnosis of a symphony’s perilous economic life begins with the limited opportunities for ongoing productivity growth. With the labor required for performances more or less frozen for all...

  15. Appendixes
    (pp. 187-208)
  16. NOTES
    (pp. 209-212)
    (pp. 213-218)
  18. INDEX
    (pp. 219-224)