There was a great Opinion piece published yesterday by arts management guru, Michael Kaiser outlining how a bailout for arts organizations could be very useful during this time of bailout mania…

He writes:

The arts have historically received short shrift from our political leaders, who all too often seem happy to offer bland endorsements of our work without backing those words with financial appropriations. But the arts in the United States provide 5.7 million jobs and account for $166 billion in economic activity annually. This sector is at serious risk. Because the arts are so fragmented, no single organization’s demise threatens the greater economy and claims headlines. But thousands of organizations, and the state of America’s arts ecology, are in danger.

I strongly agree that death by a thousand cuts to our cultural sector is a serious threat to our society, especially when the culture wars are unfortunately still alive and kicking.

Fractured Atlas is fortunate to be among the organizations chosen to participate in the The Kennedy Center’s New York City Arts Management Initiative and I was personally fortunate enough to have received a copy of his new book, The Art of the Turnaround: Creating and Maintaining Healthy Arts Organizations for Christmas - should be a great book to start off the New Year!

What do you think about a “bailout” for arts organizations in this time of national strife?

This is from our good friends over at the Tribeca Film Institute, one of our Open Arts Network partners….

Submissions are now open for the 2009 Gucci Tribeca Documentary Fund which will offer grants ranging from $10,000 - $25,000 totaling $100,000. Eligible films include feature-length documentaries that are in production or post-production. Films should examine or document people who are ignored, ostracized or otherwise marginalized; people fighting for social or political change; or broad social movements. The ideal film will challenge the status quo not just as pertains to subject matter, but also in form. International applicants are welcome, but films should be able to sustain a festival and/or theatrical run and should resonate with a mainstream U.S. audience.  Fund recipients will be announced in summer 2009.  The deadline is Thursday, February 5, 2009.  Visit www.tribecafilminstitute.org/documentary for complete details.

And, on January 8th & 10th, the Gucci Tribeca Documentary Fund will present a two-day festival featuring the films of Tribeca Film Festival Alumni that have been shortlisted for this year’s Oscars®. Films include: At the Death House Door, The Garden, I.O.U.S.A., Man on Wire, Pray the Devil Back to Hell, and They Killed Sister Dorothy.  All screenings will feature Q&A’s with the filmmakers. Tickets are just $8 at www.tribecacinemas.com.

Our research and survey responses indicate that artists and “do gooder” arts organizations struggle with the concept and reality of competition; especially because creativity is such a product of collaboration, connectedness, and reciprocal inspiration in a network of people. We need each other, yet we are in competition for the same resources, audience members, buyers, and dollars. There seems to be a constant tension between collaboration and competitiveness. How do we reconcile this? I don’t completely have the answer, but I can share the results of my investigation so far.

September 1994, I sat in the Drama Department’s freshman orientation at NYU’s Tisch School of the Arts. I was 17 years old, fresh off the plane from California, new to the big city, bright eyed, and ready to conquer the world. The first thing they told us was, “You are 1 of 900 freshman acting students at NYU. If you can bear doing anything else with your life, do it!”

900!!!!

My mind immediately drifted into random calculations of the total number of actors in all the NYC acting schools, then the total number of actors in Manhattan, then in NY State, then the eastern seaboard, then the country. Needless to say, I felt like a grain of sand in the Sahara.

What am I doing here?

Next, that grain of sand image (me) was transported to a giant hour glass with millions and millions of other grains of sand trying to get through the same little tiny funnel. I felt as defeated as the Greek mythological character, Sisyphus. You know, the one who was doomed to the meaningless task of pushing a boulder up a hill only to have it roll down again…for eternity. Yes, I am a little dramatic…why do you think I ended up in drama school?

Call it cognitive dissonance or self soothing, but this little mental freak-out was followed by a more comforting thought:

“Maybe there isn’t just one tiny hole that we all have to fight through. Maybe this dramatic marketplace is more like a sifter then a funnel. All the emerging actors are thrown into a giant sifter. We endure the thrill of the shaking and tossing, eventually falling through our own little hole, into our own little niche. Some of us will be stars, some producers, some writers, some production managers, etc. etc. etc. We don’t all want the same thing; we don’t all have the same talents to share. We each have our own fingerprint as unique as our individual talent. All we have to do is mine the gems latent in our own little mountain of potential, then we will each have a chance to feel fulfilled. Yeah, that’s it.”

I was comforted and motivated by this thought.

Throughout my career in NYC as an actor/dancer/writer/director/producer, I held onto this soothing thought to get through the rejection, the starvation, the cold, the loneliness, the fear, the empty seats, the bad reviews, etc. In hindsight, I’m so thankful, because it got me to those cherished moments of victory: getting hired for a gig, getting a rave review, traveling the world, feeling the “whooo” of synergy with your fellow performers, the adrenaline of a packed house, seeing yourself on TV, seeing your vision realized on stage, witnessing the amazing process of collaboration with other artists, and having a kid come up to you after a show and say, “You inspired me.” Those moments would have never happened if I was intimidated by the competition.

It wasn’t until a few years ago that I discovered a term that articulates this concept of finding your hole in the sifter — DIFFERENTIATION. This is a wonderful term. It says you have a value in the competitive landscape that is unique. It says that if you differentiate yourself, your audience will appreciate you for being you…well the best of you.

How do we navigate the competitive landscape?

Step 1: Define - Who is a direct competitor? Who is an indirect competitor?

This correlates to defining your professional identity (see Professional Identity: Who are you? and What do you do?). Once you are clear about who you are and what you want to offer, then you can determine your direct/indirect competitors.

Step 2: Size - How many direct competitors do you really have?

In my mind, I saw this endless sea of actors fighting for the same two line role in some infomercial. How many competitors did I really have? Let’s do research.

In the 2008 National Endowment for the Arts report, “Artists in the Workforce,” we learned there are approximately two million artists in the US workforce and only 2% consider themselves actors (39,717 to be exact). Wow! That is a very different number from the one I perceived in that freshman orientation. If there are so few actors, why does it seem like every other person I meet is an actor? Oh, because I grew up in LA (where almost half of all actors live) and went to college in NYC (where another 20% of all actors live). Research can be very revealing.

Step 3: Growth - Is this market attracting competitors or repelling them?

This is very important information. If your particular market is attracting competitors like Silicon Valley attracted venture capitalist in the late 90’s, you need to know why and strategically position yourself to be competitive. If competitors are leaving the market like venture capitalist in the early 2000s you need to know why and strategically position yourself to harvest or exit the market.

According, to the NEA report, the number of artists in the US has remained relatively constant for the last 15 years. Why? Well, the last major growth trend happened from 1970 to 1990, when the artist population doubled due to massive investments in cultural infrastructure. Some say we hit equilibrium over the last decade and a half. What does the future look like? Well, Obama’s administration says they want to make major infrastructure investments again. If they are successful, how will that affect the creative economy? Will competition increase for new resources? Will there be less competition as more opportunities open up? Are you positioned to fill an opening?

Also, look at growth in small market segments. We have not experienced dramatic growth nationally, but what about regionally? According to the NEA, the West and the South have seen dramatic growth in artist populations over the last 15 years. Georgia and Florida saw 23% growth in artists from 1990 to 2000, while places like NYC saw a dramatic exodus of artists. Why? Will this trend continue? How does that affect your business or career?

Step 4: Benchmark - Investigate your top competitors and learn from them.

This is the nitty gritty competitive intelligence that will teach you so much. Who specifically are you in competition with for grants, for audience members, for sponsorships, for press attention? Where are they located? What do they offer? What is their reputation? What are their weaknesses? Strengths? What kind of earned or contributed revenue are they generating? What is the demand for their offering? How do they deliver their offering? How do they communicate their value? What are their plans over the next year? 5 years? Pretend you are an audience member and analyze what draws you in and what could be improved. Next, look at your offering or operations and see how you measure up, what you can improve, etc.

Step 5: Competitive Advantage - How can you effectively compete?

There are two generic strategies for competing in any market place:

Differentiation - which we already talked a little about. Differentiation means that you create something that is perceived to your audience as unique, which can usually command a premium price. Many artists create uniqueness by having an innovative design; cultivating a trendy image; using cutting edge technology, using avante garde mediums, telling an interesting story, etc. However, differentiation doesn’t always have to come from the creative design of your offering; it could come from simply having better logistics. (Many talented people have failed to succeed due to poor logistics, while many not so talented people have thrived because they had a competitive advantage in logistics.)

For example, let’s say you have a theatre and your competitor is bringing in an average of $25,000 in box office receipts per 6 week run and you are bringing in an average of $15,000 per 6 week run. By benchmarking your competitor you can see there is at least a $10,000 margin for improvement. Why are they doing so much better? Is it the quality of the shows? According to audience surveys patrons enjoy your shows a little more. Is it convenience? Well, they do have a relationship with the café across from their theatre that offers their patrons free valet parking.

Cost Leadership - this strategy emphasizes efficiency. Maybe you are able to produce a $50,000 show for $25,000 due to your ability to stringently control costs. This gives you a $25,000 advantage over your competitor. In the non-profit world that cost savings usually comes from the relationships we cultivate with in-kind donors and volunteers.

Additionally, you can use either strategy in a very narrow segment of your market to really narrow the competition. This is called a Focus Strategy.

The strategy you choose is highly dependent on your competitive advantage. If you are very innovative,  than a differentiation strategy might be right for you. If you are well connected to people and organizations with a lot of free stuff, but not too innovative, perhaps the cost leadership strategy will work.

Exercise - Try to determine your sustainable competitive advantage by asking yourself the following questions:

• What resources do I have or can I obtain?
• What skills and capabilities do I have or can I obtain?
• What competencies do I have when combining these resources and capabilities?
• Of these competencies, which are my core competencies?
• Which of these core competencies does my audience value above my competitors? (Competitive advantage)
• Is this advantage sustainable? Meaning, can it be easily imitated?

In a nutshell, I caution you against entering the creative marketplace blind to your competitor’s strengths and weaknesses OR to your own. Finding ways to compete effectively and to create collaborative competition will ultimately help grow and improve the creative economy. Your courage to compete will broaden the diversity of the creative offerings in our cultural institutions and entertainment spaces, as well as improve the vibrancy of our communities. We encourage you not to be intimidated by competition, but to embrace it. Find a way to communicate and deliver your unique value; because if you get intimidated and take yourself out of the creative marketplace, we all lose out.

A few weeks back, the NY Times published a great piece about the business of being an artist. It profiles a few artists who share tips & strategies they’ve employed (no pun intended) to get their businesses off the ground, including one who is 14 years old!

My favorite quote comes from Larry Thompson, President at the Ringling College of Art and Design in Sarasota, Florida. He says: “I am committed to destroying the myth of the starving artist,”.

From your mouth to Artists ears, Larry.

Our final Member Profile of 2008 spotlights Available Light Theatre of Columbus, Ohio.  Artistic director Matt Slaybaugh tells us about his company’s work and its dedication to keeping theatre accessible to all, even during dark economic times.

Matt, tell us a little bit about Available Light Theatre…

Available Light is a fellowship of artists dedicated to building a more conscious and compassionate world by creating joyful and profound theatre.  Our shows are split 50-50 between great new plays by “emerging” artists, and original works created by the company.

Who or what are your biggest influences?

Anne Bogart & the SITI Co., David Foster Wallace, Miles Davis, Kalle Lasn.

What do you consider to be your company’s greatest success(es) to date?

Under our previous guise as BlueForms Theatre Group, we were featured as one of 12 “Hip, Hot, and On the Verge Companies” in American Theatre magazine.

In April of 2008, we presented Sheila Callaghan’s “Dead City”.  It was among our finest productions, it was definitely the most expensive and highest-profile.  Despite the added cost, we started the “Pay What You Can” program and nearly doubled our audience.

Aside from these, our continued perseverance and financial stability in the face of all the obstacles that most artists face in our country feels like a great success.

As you mentioned, your company’s current ticket price policy is “Pay What You Want. Every seat, every show, for everyone.”  Will you be able to keep this up despite the sagging economy?

We started this policy in March of 2008, and we are planning to continue it throughout 2009.  The worsening economy means we MUST keep it up.  It’s simply a better world when everyone can see great professional theatre no matter how little cash they have in their pocket at the time.

On your website, you describe your most recent play, Steven Dietz’s “Foolin’ Around with Infinity”, as “a genre-bending political comedy [that] stares down nuclear annihilation as personal responsibility.”  How did it come to be?

From the director, Eleni Papaleonardos, a member of our company:

“Years ago, right out of college, I was an apprentice at Actors Theatre of Louisville.  In our ‘free time’ the apprentices would hide out in the Literary Department reading plays that had been submitted to Actors Theatre…  I found a 1986 draft of ‘Foolin’ Around with Infinity’ and fell in love.  I put it in my ‘love-this-must-do-something-with-it’ file.  Then I re-read it, and I felt that the ideas of fear, fear of government, fear for the economy, and fear for self were perfectly captured in this work.  Especially where we are now in history. It spoke to me.”

If you could collaborate with any performing artist — living or dead — who would be your choice and what kind of project would you propose working on?

We are still reeling from David Foster Wallace’s recent death.  One of my life-long dreams, now impossible, was to create a grand theatre event based on his amazing book Infinite Jest.

You’ve been a member of Fractured Atlas since March 2007. How do you use your membership?

Our supporters love that, because of our fiscal sponsorship through Fractured Atlas, they can get tax benefits when they make large donations.  We’ve also been able to recently apply for a couple of significant grants, thanks to the wonderful people at Fractured Atlas and that’s helping us to grow into a better organization.

How would you finish this sentence: Art is important because ______.

I’m gonna quote Brecht:  “Art is not a mirror to reflect the world, it is a hammer with which to shape it.”

How can we learn more about and experience Available Light Theatre’s work?

Our website is chock full of videos, photos, scripts, blog entries, history, links, and so on: avltheatre.com.

We just received word from Arts for LA, the leader in arts advocacy for the Los Angeles area, that the local school district has frozen all funds until the state government reconvenes in January.  For artists specifically, this means that all teaching artists and arts organizations that work within that school district will have significantly delayed payments for work already performed.  On top of that, all scheduled work for the coming weeks must cease, meaning that more will go without expected paydays.  The kicker?  There was no advance warning that this was going to happen, leaving everyone in a lurch during the holiday season.  What happened?  A recession happened, causing a projected $460M shortfall for the school district’s budget.

What’s interesting is that the Los Angeles Unified School District has a very different message on their website — one of celebration — noting an increase in test scores in the region.  No doubt, that’s the definitive sign that students are being better educated and that the district is doing well.  (Please read that last sentence with a heavy dose of sarcasm.)  To their credit, the school district has launched a special website — LA Students Count — regarding this crisis.

So, you think since you’re not in LA that your voice doesn’t matter?  Well, it most certainly does.  Have you always been wondering how to get involved in arts advocacy efforts?  Here’s your chance.  Whether or not you’re based in LA, here’s what you can do:

- Write Letters!  Here’s a template you can work from.

- Post Comments!  Leave your letters and thoughts on the Arts for LA blog.

- Blog about it!  The more we spread the word, the better.  Look how easy it is… I’m doing it right now!

- Sign a petition!  Keep an eye out for one on the Arts for LA website.

- Call your local politician!  If you are an LA resident, call your local state assemblyman or senator’s office and speak with their staff.  Here is contact information about the state assembly and for the senate.

- Talk to your friends, colleagues, patrons, and family in the LA area.  Tell them to follow the same action steps as listed above.

We always encourage our members and other artists to advocate on a local level.  This is the best, easiest, and most effective advocacy that you can do.  Your local government is supposed to be working for you and making your lives better.  If you strongly believe in arts education, then speak up!  Your fellow artists are in immediate need and can desperately use your help!

The Economist has a short piece about the opportunities and pitfalls in Obama’s plan to make massive investments in infrastructure projects.  The writer observes that the US has historically underinvested in infrastructure, while the projects that are carried out are funded in a haphazard manner through Congressional member items with little or no federal oversight or planning.

In our current rush to stimulate the economy by funding many projects as quickly as possible, it’s more important than ever that we have a coherent strategy to ensure that infrastructure spending is really an investment in economic growth instead of just a way to provide some short-term jobs.  Part of that strategy should include targeted investments aimed at bolstering the creative sector.

The arts are an unparalleled driver of economic development, especially in cities.  A vibrant cultural sector brings quality-of-life improvements that attract knowledge workers from other industries, increases the property tax base, and attracts tourism dollars.  (Yes, gentrification is a concern, but it’s a problem that can be mitigated with responsible planning.)  And if “bang for the buck” is a serious consideration - which it should be - then we could do worse than to invest in an industry that for centuries has devised ways to accomplish great things on shoestring budgets.

What would these infrastructure investments look like?  Affordable space in which to live and work.  Adequate financing for capital projects.  Tax incentives and economic development programs that no longer discriminate against non-profits.

Over the next few months, Fractured Atlas is going to be promoting this vision in New York, Washington, and anywhere else where they’ll listen to us. But we need more ideas!  So, what are YOUR thoughts about investing in our cultural infrastructure? Post them in the comments here.  If they seem worthwhile and doable, we’ll make sure they’re included in the policy discussions that unfold.

Excuse me for being M.I.A. over the last month, but I was busy producing the National Black Arts Festival’s 1^st Annual Winter Ball (“The Art of Change”), featuring special guests Dr. Cornel West and Big Boi from Outkast. I won’t go into all the details of the event (although it was fabulous!!), but I do want to give you a little background about how this event relates to the importance of market analysis.

The NBAF Winter Ball was a great success in terms of attendance, donations, branding, cultivating new sponsorship relationships, and overall visibility; but more importantly it was a great success in targeting a new market for the organization. Many established arts institutions are dealing with a generational gap that threatens their future; the National Black Arts Festival is no different. Their patron-base is comprised of Baby Boomer art lovers, who have been core supporters since the organization’s inception 20 years ago. In many respects this is a huge accomplishment, as relatively few arts organizations have been able to sustain support from their target market over two decades. However, in terms of future sustainability it is problematic, because this demographic is retiring and eager to pass the baton to a new generation.

In October, I joined the newly established Collective Renaissance Guild, a group of dynamic Urban Gen X professionals, charged with cultivating arts patronage and cultural leadership among our peers. As the planners and hosts of the NBAF Winter Ball, we were very successful in:

· researching, analyzing, segmenting and targeting our market.

· creating the right programming,

· galvanizing the right opinion leaders and gatekeepers,

· formulating the right targeted message,

· and communicating our value through the right communication channels.

The results, 450 of Atlanta’s Urban Gen X elite, with the resources and ability to support National Black Arts Festival over the next 20 years, showed up and were thoroughly engaged.

Why is analyzing your market so important? First, you need to find an attractive market, meaning a group of people or organizations that have the ability and the desire to buy/fund your work. Secondly, you have to understand their needs, wants and behaviors, so you can develop messages and select strategies/tactics that will create demand for your work. Finally, regular analysis will protect you from pending threats (e.g. investment in an internet platform on the verge of mass exodus) and open your eyes to new opportunities (e.g. being a first adopter of a new marketing and distribution channel).

For example:

In 2006 EMI, the world’s fourth-biggest recorded-music company, invited some teenagers into its headquarters in London to talk to its top managers about their listening habits. At the end of the session the EMI bosses thanked them for their comments and told them to help themselves to a big pile of CDs sitting on a table. But none of the teens took any of the CDs, even though they were free. “That was the moment we realised the game was completely up,” says a person who was there. (The Economist, January 2008 issue)

Many music industry firms missed this critical shift in the needs/behavior of their customers and are still scrambling to adjust their business models so they are less reliant on physical media sales (e.g. CDs). Good market analysis might have warned of this dramatic disruption.

In the non-profit arts arena market analysis will not only get more “butts in seats,” it will help secure grant money. According to the NEA, arts policymakers in the US are becoming increasingly concerned with measuring an artist’s ability to directly serve their community. Translation: Artists need to be able to prove to granting organizations that they effectively meet the needs of their community. How will you prove this without first researching the needs of your community and measuring your impact?

Alright, let’s get down to the nitty gritty. How do you do a market analysis?

Step 1 – Define your market.

Determine your market based on qualitative/quantitative responses to your work. Test your market. Try your stuff out in different demographics and see how they respond. When people do respond, learn as much as you can about their needs, wants, desires, hopes, behaviors, and frustrations.

Step 2 - Determine your market size.

Once you have a pretty good idea of who is responding to your work, it is important to understand how many of those people exist in given geographic area. For example, Fractured Atlas serves emerging artists. It is nearly impossible to measure the size of the emerging artist market, because the dividing line between emerging and emerged is very subjective. However, we were able to prove a sizable US market by looking at the number of visual and performing arts degrees awarded each year, along with supportive research on the number of people with arts degrees that pursue arts related careers.

Step 3 – Determine you market growth rate.

You need to know if your market is going to grow or decline in the future, so you can create the right marketing plan. For example, Hip Hop music is experiencing 4% growth in the Gen X demographic, but is seeing a 6% decline in the Gen Y demographic. An artist working in this genre has to decide whether to milk sales from Gen X or to adopt the new musical genres emerging within the Gen Y demographic.

Step 4 – Determine market profitability.

Its not just about size and growth, it is about buying power within a market segment. Gen Y wields significantly less buying power then the Boomers, who have the lion’s share of economic power in this country and the most spending discretion. However, an artist could create a fan base among the Gen Y demographic that will grow for 20+ years. Additionally, artists or arts organizations have to look at the costs in targeting a particular market. Maybe Gen Y will bring 2 times the gross revenue over the life of the creative offering, but it might take 3 times the expense to capture their interests over the Boomers. Which demographic yields a better net profit margin? In what time frame?

Step 5 – Discover or create distribution channels.

Find out how your market is gaining access to similar creative offerings. Do you have access to those channels? Can you create new channels for delivery of your creative offering? Can you make existing channels more efficient and gain an advantage in the market?

Step 6 – Determine the key success factors in your market.

What works? You can look at your own experience or that of other artists and arts organizations to determine what creates demand in your market. For example, the Collective Renaissance Guild targets Hip Hop elite. A key success factor in marketing to this demographic is having a powerful opinion leader vouch for your legitimacy. Therefore, we solicited sponsorship from Uptown magazine, who gave us a full page ad in their December issue.

Other success factors to be aware of include: access to essential unique resources (e.g. theatre in the East Village of NYC); access to distribution channels (e.g. search engine optimized website for ticket sales); and technological progress (e.g. cutting edge software for filmmaking).

There are many other research/analysis points to consider, but much of it relates to your particular set of needs and your unique creative offering. However, I hope this blog at least communicates the importance of knowing your target market.

For more information, please contact me at kamal.sinclair@fracturedatlas.org.

Four Fractured Atlas members (three are fiscally sponsored projects!) were recently awarded the Economic Revitalization for Performing Artists (ERPA) award from The Field.

Congratulations to Rachel Chavkin (The Team), Conni Hall (Conni’s Avant Garde Restaurant), Jon Stancato, and Caroline Woolard (Artist’s Community) who will each be paid $5,000 to research and develop their projects!

Check out The Field (an Open Arts Network partner) to find out more about ERPA.  ERPA is funded by the Rockfeller Foundation’s 2008 New York City Cultural Innovation Fund.

Fractured Atlas members often call our office needing legal help.  Since we don’t have an attorney on staff, we have a few resources that we direct them to and I recently came across this one in Time Out.  I spoke to a staff member at the New York City Bar Association to find out more details and they were extremely helpful and friendly.  So if you’re in need of legal help, check them out.

The New York City Bar Association offers a Monday Night Law Clinic that provides half-hour appointments with lawyers, offering pro bono advice on anything regardless of income level. Call to schedule an appointment. 42 W 44th St between Fifth and Sixth Aves (212-626-7373). 

They’ll give a half hour of their time free for potential clients to ask anything. If during the conversation it is determined that you need to hire an attorney, they’ll take your case to a panel of pro bono lawyers who offer rock bottom prices. Once you are matched with an attorney, you get one free half hour of their time to determine if you want to work with them or need further help. After that meeting, it’s up to you to determine if you want to pay them for their services. The pro bono fees vary from attorney to attorney.

And if you’re looking for other legal help options, don’t forget to check out Volunteer Lawyers for the Arts and The Lawyers Alliance for New York.