Understanding the Dilemma Orchestras Face when trying to Balanced the Budget

There is more to orchestras balancing their books than just selling more tickets

It is hardly news anymore to hear of an orchestra struggling to balance their budget. Atlanta musicians are locked out for the 2nd time in two years over contract negotiations - the musicians have been asked to take yet another pay cut. The Philadelphia Orchestra declared bankruptcy a couple of years ago. Colorado Symphony has been operating with a deficit for years. These are not isolated examples.

When ever the news reports the demise of an orchestra, there are a half dozen articles that pop up to discussing what changes need to be made in order for orchestras to be profitable again:

- raise ticket prices to cover costs
- lower ticket prices to get more people into the concert hall
- program new music
- program old music
- attract a younger audience
- better leverage the existing audience (particularly the donor base)

The list goes on and on, yet the real problem is: based on the type of orchestra, the cost of putting on a good, live orchestra performance can be quite expensive.  Playing in an orchestra isn't something you can just 'pick up' and start doing; it takes years of practice and education to get good enough to even audition for the better orchestras. Orchestra musicians of the top orchestras in the US are some of the best musicians in the business. A typical orchestra has 80 musicians. Include the cost of the concert hall - orchestras require more space, add to this the time needed for rehearsal of the music, and a single orchestra performance can be considerably more expensive than most contemporary music performances.

It is not possible to just raise ticket prices to cover the cost of an orchestra performance. Classical music is not as popular as contemporary music, so demand for tickets isn't as strong. It is not possible to just raise prices to make more money. Price the tickets too high and the orchestra comes off being elitist; price them too low and the tickets don't pay for the seat the patron is sitting in. For those wanting to raise or lower ticket prices, the question really focuses around trying to maximize profit. Raise the prices too much and the audience won't buy tickets. Classical music doesn't have the demand for pricing that their contemporary artists do. People don't think anything of paying $100+ to get tickets to Pink, Lady Gaga or Justin Timberlake, but are seldom willing to pay half that for an orchestral performance. On one hand we think classical music is elitist and yet don't give it the value we give other musical performers.

Lowering prices does not work either. Should classical music tickets should start at $5 to $10 so students and senior citizens can afford to buy tickets? While lower prices might help attract a new audience, the basic math doesn't hold up. If the concert hall seats 1000 people, and the orchestra sold out at $10, they made $10,000. Divide that by the 80 musicians for their two hours worth of work, plus another six hours of rehearsal (80 x [2+6] = 640) and the musicians made just over $15 an hour - and that's not considering ANY other costs for the performance, hall rental, printing of programs, advertising, the conductor, and so on. If you include the time they had to personally rehearse their parts (add 10 hours and most musicians spend a lot more than that) and their pay drops to $6.90. Try and hire a professional in any field for $7/hr and see what kind of quality you get.

Of course, not all seats are priced at $10, and not all concerts sell 1000 tickets. The juggling act is trying to get the right number of high priced seats verses low priced seats (and all the seats in-between). There is also a sense of value that comes with ticket prices. Cheap and discounted tickets can undermine the value of the end product. With "deal of the day" websites like Group On and Living Social, people are always on the lookout for cheap tickets. But, if classical music is to have value in the market, the price of the tickets needs compare favorable with other ticket prices.

Still, very few orchestras performing in the US make enough in ticket sales to cover the cost of a performance. Orchestras get roughly 50% of their income from ticket sales. The rest comes from donations, grants and other sources. Orchestra music is performed not done because it is profitable, but because the music adds something to our lives, to our communities.

So, how do we make orchestras more popular? 

Some suggest orchestras need to program more new music and not keep performing the same repertoire over and over again. While I am a big fan of new music, programming new music is problematic for orchestras. Professional musicians played all the standard repertoire, so programming a Beethoven or Mozart means the orchestra doesn't need as much rehearsal time as they might when playing a new piece by Higdon, Adams, or Glass. Rehearsal time is expensive, as the more time you need to get a piece ready, means more money you need to make at the box office of compensate. More recent music is still under copyright, so performing a piece of contemporary music cost more than performing a piece by Brahms or Beethoven, whose music is in public domain. Orchestras have to consider what music they have in their library, as renting parts can be costly. New pieces also don't tend to perform at the box office as well. While we may have heard Beethoven's 9th Symphony a half dozen times in the past 10 years, it continues to sell well, to fill concert halls every time it gets played. Of course, orchestras can't just play Beethoven's 9th, but if you ever wonder why it seems orchestras play the same music (over 100 years old, the standard repertoire) over and over again, it is because

1. the standard repertoire does well at the box office, 
2. music in the public domain is cheaper, and 
3. frequently performed pieces don't require as much rehearsal.

Unfortunately, this does tend to stagnate both the repertoire and discourage new audience participation. The balancing act here is trying to include enough of the standard pieces to sell tickets, while performing new works (or less popular ones) to maintain a sense of artistic integrity. It is important for artistic planning to understand a programming less popular music in no way signifies the music is somehow less. It just means there is less demand for it at the box office.

So, if the goal is to play pieces the audience recognizes perhaps they should play more film music. Music by John Williams is very popular with audiences everywhere. However, royalties to perform his works can be costly and erase any potential profit from additional ticket sales.

Orchestras struggle with this idea of popular verses artistic. Not all music in the standard repertoire performs the same at the box office. Musicians don't want to play the same music over and over again. Orchestras might want to play the rarely heard Brahms or Elgar, rather than sitting through another rendition of Tchaikovsky or Rachmaninoff, but the challenging Brahms or the romantic Elgar don't sell as well as the ever popular Tchaikovsky or robust Rachmaninoff. People love Mozart, and somewhat less so Haydn, but try and program a concert filled with Stamitz or Salieri and you'll struggle to give tickets away. For all the fans of Vivaldi and Bach, the prolific Telemann or the talented Couperin are virtually unknown. This does not mean Brahms, Salieri or Telemann should be ignored or that musicians hate playing Tchaikovsky, Rachmaninoff, Mozart, Haydn, Vivaldi or Bach. There is a lot of great music considered part of the standard repertoire, and musicians like playing it all. Unfortunately, some composers, some pieces do better at the box office. Programming music has to done with the understanding as to what the music will mean in regards to sales balanced against what needs to be done to fill the artistic need of the orchestra.

The idea of getting a younger audience into the concert hall is nothing new, and every orchestra out there has some program designed to do just this. However, there is also the realization that younger audience members generally don't have the spending capital as their older counter-parts. Plus, much of the established donor base is older. They have reached a point in their life where they have the luxury to give both time and money to the arts. While it is important to bring in new audience members, orchestras can't afford to alienate existing patrons to try and grasp a potential new audience. So, whether the orchestra is attempting to program new music, or create an atmosphere that appeals to the a new audience, it has to be balance this against what their existing patrons want from the orchestra.

One of the problems orchestras face today is the lack of understanding about the very things I am discussing in this blog post. Musicians want to be paid fairly for their work (as we all do). Audience members want cheap tickets and for the orchestra to perform more of the music they want to hear (whether that is new music or the standard repertoire). Because demand for classical music isn't enough to have continual sell out performances, it is necessary to balance all of these concerns.

Types of Orchestras

In the US orchestras come in a variety of different levels (not necessarily based on quality of the musician):

• 52 week orchestras
  These orchestras perform 52 weeks a year. The musicians are paid a salary whether they perform or not, so it is in the interest of the orchestra administration to have the orchestra perform as often as possible.

• Pay per service
  These musicians are paid per time they spend rehearsing and/or performing. Typically there is a contract between the musicians (generally the union) and the administration for a rate at which the musicians are paid. Rehearsals are expensive as they generate no revenue, but performances with few rehearsals don't sound as good.

• Pay to play (volunteer)
  These orchestras ask their musicians to pay a small fee to cover costs of the orchestra. Hopefully ticket sales will make the rest.

Each of these models has benefits and drawbacks, yet each struggle in their own way to balance their budgets.

52 week orchestras - the NY Phil, the LA Phil, San Francisco Symphony, Chicago Symphony Orchestra, Boston Symphony Orchestra, and more - are the cream of the crop. The musicians play together all the time, and are generally paid pretty well in terms of average US wages. Musicians at this level are generally educated to the masters level and may have additional performance certifications beyond their masters degree. Much like Doctors, musicians at this level are constantly honing their craft, 'working' far more than the standard 40 hour work week to maintain their standard of performance. Because they are performing every week -- often multiple performances each week, each with different music -- they have less time between performances to learn new music. While they may have 8-12 hours of rehearsal time per concert, the musicians often dedicate twice that (or more) at home learning their parts, particularly for pieces they have never played before. Add to this their performance hours are not 9-5, but evenings and weekends.

Pay per service are orchestras that don't perform every week, so the administration 'hires' the musicians for when they want to put on a performance. They have a set of standard musicians the administration use with an alternate list of musicians to fill in space as needed. The musicians don't play together as often as in 52 week orchestras, so they need more rehearsal time to achieve quality performances. Many of the musicians have to work other jobs - lots of them - in order to make ends meet. They have to juggle working as teachers or playing in other ensembles with their obligations with the orchestra. And, unless they are a principal chair, they may not play in every performance. If the concert is Mozart or Haydn, the number of musicians needed on stage is much less than if the concert has Mahler, Stravinsky or John Williams. In some respects Pay per service orchestra are easier to budget than 52 week orchestras because administration can plan on the cost of the musicians well in advance. Since rehearsals are paid time for the musicians, Pay per service orchestras have to balance how much rehearsal time the music needs for a performance, how many musicians need to be on stage - Mahler symphonies take more musicians than those of Haydn, but tend to bring in more audience - with how well they think the concert will perform at the box office.

Pay to play orchestras are often the most solvent on the group. If the orchestra does not balance the budget, they either charge more to play or the group stops performing. The balancing act is really based on how much are the musicians willing to pay to play in the orchestra. Because the musicians have to pay to participate, they are not full time musicians, therefore generally not the quality the other types or orchestras get.