Theatre Bay Area Chatterbox

Thursday, June 2, 2011

Can We Really "Do Less, But Better, with the Same?"

Sasha Hnatkovich is the Communications Director of Marin Theatre Company. He has an MA in Community Development and Planning from Clark University and previously worked with Philharmonia Baroque Orchestra, Trinity Church in the City of Boston and as a freelance writer. His views do not necessarily reflect those of Theatre Bay Area or those of his employer.

Can we really ‘Do less, but better, with the same?’
A follow-up to the 2011 Theatre Bay Area Annual Conference Plenary

During the Supply and Demand Plenary at the 2011 Theatre Bay Area Annual Conference, it took me a moment to realize just how misleading the advice of Ralph Remington of the NEA and John McGuirk of the Hewlett Foundation was. ‘Do less, but better, with the same’ was the gist of their statements. The suggestion was not to, for example, continue spending $10,000 on five shows, but rather spend $10,000 on four shows (or three or two), increasing the budget per show and thus, according to the speakers, increasing the excellence of the artistic product.

With further thought, I see two problems with this advice.

First, the advice of Remington and McGuirk was based in what is, in my opinion, false logic: Funding equates to excellence of artistic product. In other words: if more funding, then better art; less funding, worse art. I think we can all agree that we have all, on more than one occasion, seen quite the opposite: small budget projects succeeding because of creative solutions to having less and big budget projects failing because of uninspired excesses from having more. That is not to say there is not excellence being produced with more (or crap with less), only that it is impossible to support the claim that that funding is the sole catalyst of artistic excellence.

Second, the advice of Remington and McGuirk was based on math that did not account for the less-than-flexible variable of earned income.

Let us say that we run a theatre company and our budget for our 2010-11 season of five productions was $10,000 (we’ll roll the operational budget into the production to keep this simple). For the sake of easy math, let us divide our budget equally among the productions: $2,000 per production. That’s all we had to spend on each show.

Of course, we are fiscally responsible managers in our hypothetical example and our expenses are based not only on what it would take to accomplish our artistic vision but also our pragmatic revenue expectations. We don’t think running up a cumulative deficit year after year is very healthy, so we aim to earn at least $10,000 (or $2,000 a production) to balance the books.

Being a nonprofit performing arts organization, we tend to only earn about 50% of our income from ticket sales. We earn the remainder from donations and grants. So, let’s say we are able to recoup the costs of each $2,000 productions with $1,000 in ticket sales and $1,000 in contributions, like this:

$1,000 earned + $1,000 contributed = $2,000 x 5 = $10,000 total season revenue

Aren’t our auditors happy?

However, let’s say we were inspired by the advice given by Remington and McGuirk at the 2011 TBA Conference! If we decided to “focus on excellence” by reducing the number of productions (in this case, we’ll say from five to two) while keeping our budget flat, as was suggested by Remington and McGuirk, then we’d expect to get a model like this in 2011-12:

$2,500 earned + $2,500 contributed = $5,000 x 2 = $10,000 total season revenue

Right?

If you are or have ever been responsible for ticket sale income, you are probably hyperventilating. You’ve been squeezing blood from of a stone for years with your pathetic marketing budget just to sell $1,000 worth of tickets to each show. Now, you’re expected increase income by 150%?! In one year?! And this expectation comes with fewer chances to recoup losses (you only have two productions to earn your budgeted income) and a just slightly less-than-pathetic marketing budget. But wait, wait, you have capital-E Excellence on your side!

Edgar Allen Poe once said: “There are few cases in which mere popularity should be considered a proper test of merit.” A marketer knows this. He or she knows that merit is not enough fuel sales of a product. More often than not, sales of a product are related to consumer behavior, brand or product reputation, customer and business networks, price points, persuasiveness of messaging, accessibility to bandwidth (and so much more) rather than just excellence alone. In other words, our hypothetical theatre company will be lucky to pull this off in 2011-12:

$1,500 earned (a miraculous 50% increase from 2010-11) + $2,500 contributed = $4,000 x 2 = $8,000 total season revenue

Oh crap, we kept our spending flat at $10,000 and now we have a $2,000 deficit. But Remington and McGuirk's advice, to spend the same on fewer shows, in fact puts the burden of funding our artistic product on their organizations–the very organizations that they say are unable to increase funding to us. In the example above, contributed income would have to increase 40% (now the folks in charge of development are hyperventilating) to break even.

Does consolidating resources in fewer shows make for better shows? Can it even be done? Do you know of any examples to support this advice? Let me know in the comment section below. I’m hoping you’ll prove my logic exercise wrong.

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