The Problem with “New Models”

Over the summer, Michael Kaiser published a series of posts complaining about a lack of specificity in the ongoing chatter about a need for “new models” in the arts. I responded on this blog, both times, with my own thoughts on the subject.

Last week, Kaiser published another post in which the critics are once again faulted for a lack of specifics:

This has left many suggesting that we need new models for running arts organizations (although I have yet to hear any suggestions of new models that could save large organizations like orchestras, ballet companies and opera companies) and others looking for draconian cuts to the budgets of the institutions they love.

This comment is actually something of an aside. Kaiser’s main argument is that the field is facing an existential crisis that is fundamentally fiscal in nature and that can best be solved by institutions becoming more effective at marketing and fundraising. I 100% agree with him that simply slashing budgets cannot save us from fiscal ruin. But it’s disappointing that he continues to dismiss the possibility that salvation may be more complex or require more radical innovation than simply doing more of the same, better. (I’ll also take his comment, along with the total absence of links in his posts, to mean that he’s reading neither this blog nor Diane Ragsdale’s. Alas, I find myself shouting into the void, and not for the first time…)

But enough picking on Michael! The truth is, I share his frustration with the way most folks in our field talk about “new models.” The problem lies in the word “model.”

One Size Rarely Fits AllIt’s obvious to everyone that the field is in real trouble, especially traditional institutions. The word “model” suggests that there is a magical template somewhere, like the secret of turning lead into gold, which could act as a panacea and solve all of our problems. Even better, this one template is supposed to work for every organization in every situation. What a lovely, comforting notion! If only someone could find the “new model” and share it with the rest of us, everything would be sunshine and rainbows now and forever!

I hate to be the bearer of bad news, but no such model exists. (Rest assured, however, Santa is 100% real. I know because I met him at the mall the other day.)

The challenges we face as a field are complex and stem from a mix of structural and cultural factors. No simple template, no one model will fix them. Holding out for the “new model” is waiting for Godot. Demanding that critics of the status quo “produce the model” is missing the point.

Consider some of the more popular candidates for the role of magic bullet:

  • Raise more money and sell more tickets? Absolutely! But for how long and how far? Can everyone do that or at some point is it a zero sum game? There is ultimately a limit to the amount of money our aggregate audience is willing to spend donating to arts organizations and buying tickets to their events. This argument is like someone in the early 20th century declaring that the solution to our transportation problems is to breed faster horses and maybe teach them how to fly. You might eke out some incremental improvements, but you’re not going to change the game.
  • Increase government subsidies for arts organizations? Sure, but here, too, where’s the ceiling? The NEA makes $150 million per year in grants, compared to $13 billion in private philanthropy to US arts organizations. Tripling the NEA’s budget would amount to little more than a Band-aid. Meanwhile, how much of your budget do you really want coming from a single government agency that can be eliminated by the stroke of a pen from a freshman Congressman from Oklahoma? Relying on government support for the bulk of your budget is not a path to sustainability; it’s a recipe for terrifying fragility.
  • These Guys Aren't Coming to the RescueChange all our organizations to L3Cs, B Corps, and Limited Leprechaun Partnerships? Business entity types are tax strategies, not models (business or otherwise). They’re fun to fetishize, and by all means we should be using these tools more often and in more creative ways. But there’s no super ninja tax status that can change the fundamental economics of our industry.
  • Reinvent the governance function? Lots of good things could come from boards of directors being more community-based and/or reflective of the audiences we serve. Financial salvation isn’t one of them.

My point isn’t to be discouraging or to suggest that the situation is hopeless, it’s that complex, structural problems are rarely addressed by simple, superficial solutions. Instead of talking about new models, we should be talking openly, honestly, and unsentimentally about the myriad dysfunctional, inefficient, and/or unsustainable practices that are embedded in our field. And we should be experimenting bravely and scientifically with new strategies and tactics, some of which might turn out to have value for other practitioners.

So what are these structural and cultural factors that jeopardize our future? Diane Ragsdale addresses the cultural aspects far better than I could, so I encourage you to give her post a good read. As for the structural ones, I’d like to highlight two of the most fundamental (and, for Kaiser’s benefit, I’m straying outside my comfort zone and thinking mainly of large institutions). These are far from the only structural challenges, but they’re pretty close to the root of the problem:

  1. Baumol’s cost disease - The arts don’t benefit from improvements in labor productivity the same way other industries do. It took 4 musicians to perform a string quartet in the 1700s, and it still takes 4 musicians today. Meanwhile, real wages inevitably increase over time. As history marches on, we are therefore guaranteed to get steadily less “bang for the buck” out of our professional artists.
  2. Fixed, non-scalable supply - A 500-seat theatre has 500 seats whether the show on stage is a hit or a dud. The electric bill doesn’t change, either, making this the worst of all possible worlds. Expenses can’t be reduced, and revenue can’t be increased above a fixed ceiling. This is the inverse of the web, where the same website can almost effortlessly go from supporting 1 visitor to 1 million visitors, with revenues increasing far faster than hosting costs as you scale up.

Now I’m going to do something really stupid and offer some semi-concrete suggestions for large organizations seeking to address these issues and improve institutional sustainability. I don’t have a template, but I’ll offer some provocations that might hopefully inform an experiment or two.

If you’ll excuse the corporate speak, I find it helps to think abstractly in terms of inputs, content, and distribution. The artists are the inputs, the art is the content, and the seats are a distribution channel. What big institutions need is greater flexibility in the sourcing of artistic content and improved scalability (up and down) in the ways that content is distributed.

The institutions with the most intractable labor problems are those with large permanent companies of highly skilled, unionized artists - Kaiser’s orchestras, ballet companies, and opera houses. This is Baumol in action, and I suspect we’re nearing the tipping point where the cost disease becomes fatal without radical intervention. The painful truth here is that keeping a large permanent company attached to a single institution may simply be an unsustainable practice. (I’m just the messenger, don’t shoot me!) It was fun while it lasted, and it provided a path for artists to make a decent living doing good work. But I predict this will become an exceptional practice maintained by only a handful of institutions, while the rest will develop different relationships with the creative workforce that supplies their content. Those relationships will need to be fluid, project-based, and authentically collaborative.

The good news is that this may actually turn out to be empowering for individual artists. Sure, there’s something to be said for having a strong union that is willing to fight to the death for your job security. But there’s also something nice about embracing your inner entrepreneur and forging a path as a free agent. Gazillions of artists have already discovered this, and more are joining the movement every day.

The distribution side is where things get exciting. I would argue that most large institutions are really in the business of distributing content, not producing content. If they choose to maintain a stable of musicians or dancers, then they’re essentially insourcing a critical supplier. The heart of the operation is about financing, marketing, and distributing artistic content.

To really change the game, we have to blow up our established conventions around distribution. We must figure out ways of extending our performances beyond the limited seats in our theatres, and our exhibits beyond the limited floor space in our galleries. Yes, this is sacrilege. Yes, the live arts experience is sublime and pure and the reason we all got into this crazy business in the first place. We can either ride that purity straight over Kaiser’s fiscal cliff, or we can get over ourselves and go invent something equally sublime and wonderful that isn’t constrained by real estate and floor plans.

The mundane example that everyone cites (and that I’ve cited before) is the Metropolitan Opera’s HD broadcasts in movie theaters. These have been more successful than I ever would have predicted, and demonstrate that even awkward first steps outside the concert hall can discover new audiences and new revenue. In the short term, they present an as yet un-pursued opportunity for the Met to leverage its unique distribution channel to promote work by other companies (hat tip to Diane for this idea). In the long run, the potential for innovation in distribution technology is far more profound. If I may be so crass as to quote myself from back in June:

Fifty years from now, I suspect we’ll look back on [the Met's HD broadcasts] as a crude early experiment that laid the groundwork for currently unimaginable aesthetic experiences, like virtual reality immersion and environmental projection. If Mahler’s symphony can be performed “live” for an audience of millions, then suddenly the economics look pretty healthy.

If you’re not into the whole technology thing, then think about the possibilities for performances in community spaces like schools or commercial spaces like corporate events or (God forbid) even shopping malls. That approach doesn’t offer nearly the same potential for breaking free of existing distribution constraints, but at least it’s a move in the right direction.

Look, none of this should be taken as prescriptive. I’m not trying to play Sherpa here, nor am I qualified for the job. Rather, consider these ideas some gentle provocations and a reminder that (a) structural problems require structural solutions and (b) template strategies don’t work for complex challenges. With that in mind, maybe it’s time to retire the term “new models,” and come up with some new shorthand that reflects both the magnitude and the nuance of the task at hand. Suggestions, anyone?


20 Responses to “The Problem with “New Models””

  1. william osborne:

    You present a straw man argument about public arts funding.

    There’s no mention that both France and Germany spend about $13 billion on the arts for one quarter the population of the USA. There is no mention that Europe’s funding system is far more stable than the U.S. system as evidenced by hard numbers, orchestral bankruptcies and countless other measures. There’s no mention that Europe’s public funding system is not centralized. About %50 is municipal, 45% at the state level, and only 5% Federal. There’s no mention that a genuine public funding system is mostly local, diversified and cannot be eliminated by “a freshman Congressman from Oklahoma.” There is no mention that the NEA budget is only 1/25,000th of the Federal budget and is only a token place marker that does not even serve as a model of what a genuine public funding system would be. There’s no mention that public arts funding systems are part of a society’s cultural infrastructure and would have to be built over a long period of time.

    So we are to believe that a public funding system is a “recipe for terrifying fragility” and that we are just to forget the whole idea in spite of the perennial problems our system causes and which have no comparison any where else in the developed world. And of course, straw man arguments about public arts funding are just what all those conservative, wealthy board members for arts organizations want to hear.

  2. Adam Huttler:

    @William - Clearly my comment about public funding was a gross oversimplification. It was a snarky aside in a long post.

    Having said that, and setting aside the desirability or hidden risks of a European model of arts funding, do you really think it’s politically feasible?

    In Washington, we’re debating how much to cut Medicare and whether to retain the home mortgage interest tax deduction. Does this sound like an environment in which a 100-fold increase in arts funding is likely to fly? These days we’re lucky if we can stave off the members of Congress who want to kill off the NEA completely.

    Meanwhile, Western European governments are desperately trying to figure out how they can adopt a more US-style, decentralized/democratic/private approach to arts funding. For good or ill, the developed world is moving away from the model that you’re promoting. Rage against the tide if you like, but I’d rather spend my limited energy elsewhere.

  3. Kevin Clark:

    Thanks for more on this - great thinking on an important subject. I wonder what a thriving arts scene would look like without any existing institutions at all. That might be a good avenue to explore.

    I’d also like to add for people that get down to the comments that one of the key feature’s of Baumol’s cost disease isn’t just the productivity mismatch between things that suffer from it and things that don’t. It also gives an explanation for wages that rise for, say, orchestra musicians, in line with the administrative staff, even though the administrators are increasingly productive and the musicians aren’t (you might expect them to fall, keeping in line with their relative productivity, but they don’t).

    This leads to increased prices in most industries, but since we’ve been trying to reduce ticket prices, it leads mostly to deficits, cuts in musician pay that seem economically sensible and also completely repugnant, and, well, the current situation.

    There’s a lot more good literature on Baumol in regular, for-profit industries that could inform this discussion, too.

  4. Melba LaRose:

    Your blog is brilliant! And just what I’ve been wanting to hear. It doesn’t have all the answers — how could it! It is up to all of us to find answers for our particular organizations or specific talents/ interests. I read everything I can get my hands on and question how people are surviving. If I can find something that might work for my small theatre organization, I try it. But you’re right, one size does not fit all. I started a list of possibilities 2 years ago and it keeps growing. I had a very prophetic dream that said we had to go through total annihilation before we can start to create structures that will address the new world. I hope it doesn’t come to that, but the number of theatres, orchestras, operas, dance companies, etc., that have folded is staggering. I attend international conferences every 6 months and their funding systems are failing. They are looking to us for answers. I’m so glad to hear that SOMEONE is as concerned as I am. Thank you so much for giving me hope.

  5. Richard Kooyman:

    It’s frustrating being an artist today. I see arts organizations getting state and federal funding but little of that money ends up funding cultural production. And I see a plethora of art advocacy organizations like yours that seem unwilling to go to bat for more public funding dollars.

    The NEA was established by a mandate that suggested that the arts exist in a unique manner in society and therefore deserve both public and private support. If we want a cultural society we need to pay for it.

    Where has the art advocacy world been to advocate for that public support? It hasn’t, and even worse, you suggest what a folly it would be to even try in todays political climate.

    Where is any political voice of art advocates to rally and challenge the conservative right positions that the arts are only worthwhile if it can be shown to be good for business?

    Where has been your voice decrying that if we have money for bombs. highway systems, and space exploration we can damn well have money to support our cultural institutions and the cultural producers?

    Instead all we have heard from the administration side of the arts is debate on how to survive with less and less or how the arts community should learn to depend more and more on private dollars which have shown to be even less stable and consistent than the public dollars you flip off so easily.

    Cultural institutions and the the artists who produce that culture are hurting under the present system because it is a system that isn’t working.
    The latest excuses that the arts need to become more relevant, or they need to become a type of social engineering through creative place making, or they need to be more entrepreneurial, are directives coming from those in political control. They want you to pay your own way because they don’t value the arts enough to want to pay for it. And I fear art advocates and art agencies that exist to support cultural production, such as yours have drank that kool-aid of political conservatism.

  6. Adam Huttler:

    @Richard - For the record, Fractured Atlas spends time, energy, and money every year advocating for increased NEA funding. We’ve been doing that for a decade, along with colleagues like Americans for the Arts and coalitions like the Performing Arts Alliance. We will continue to do so, because it’s the right thing to do, but I do not believe it is especially effective.

    Meanwhile, the entrepreneurship-supporting infrastructure that we’ve developed has a positive impact on creative production that can be measured in the tens of millions of dollars per year. That’s what we’re best at, and that’s where the bulk of our attention goes.

    Even if you want to limit the discussion to political advocacy, why must arts advocates only focus on direct funding? I’ve had conversations with senior officials at HUD about how they can better understand the role of arts and culture in urban economic development. HUD’s annual budget is in the neighborhood of $50B. Does that not represent an opportunity? Or how about our work on health reform that sought to address the estimated 600,000 US artists without health insurance?

    Again: complex problems need multi-faceted solutions.

  7. Trevor O'Donnell:

    I’m with you on most of this, Adam, but your first point assumes that traditional arts organizations are already good at marketing and they’re not. They may be good at fundraising, but they pretty much suck at marketing and the room for improvement is far from incremental.

    Michael Kaiser is right about doing better marketing. He’s probably no better prepared than most arts leaders to articulate a solution, but at least he knows where the weakness lies.

    Arts marketing is tradition-bound, subjective, egocentric and amateurish, while effective marketing is fresh, audience-centric, fact-based and firmly grounded in professional standards and practices.

    Fixing arts marketing, if you’ll forgive an alternate equine analogy, is like replacing a stubborn old mule with a purebred racing horse.

  8. Adam Huttler:

    @Trevor - That’s a great point. I would add that many arts organizations fail to appreciate the difference between marketing and advertising. Marketing can and should be a holistic process that begins with understanding your customers and their needs and heavily influences product design and development. Messaging is only a small part of it.

  9. nilelivingston:

    Funding for the arts can be unlimited. We should absolutely experiment and extend the arts beyond institutional walls. Thank you for your encouragement.

  10. william osborne:

    Adam, it is simply false to say that Europe is moving away from its public funding system for the arts. That is a common bit a neo-liberal propaganda that is a flat out lie, and yet even people such as yourself believe it. Even in the current economic climate Europe’s funding has generally remained stable or even increased. Continental Europeans are deeply wary of the American system which they view as a form of classism and cultural plutocracy. It is not something they are going to adopt. In fact they would fight it tooth and nail.

    Our system doesn’t work. The evidence is everywhere to be seen such as with our collapsing orchestras. Statistics also show the truth, such as the fact that we only have 3 cities in the top 100 for opera performances per year. If we really want to solve our funding problems and have a cultural life along international standards we will have to join the rest of the developed world and gradually develop a public funding system for the arts. This will be a long process lasting decades.

    As an aside, I wonder if you sense how it comes across when you bash unions and public arts funding in the same post. Why are arts administrators beginning to sound more and more like a bunch of Tea Baggers?

  11. Adam Huttler:

    @William - When I say that Europe is moving towards a US-style model of arts funding, I’m basing that belief on conversations I’ve had with senior officials at European cultural agencies. Who knows if/when it will actually happen (and it isn’t a binary decision in any event), but I promise you it is being talked about seriously and at the highest levels.

    Meanwhile, I don’t know how you get the impression that I think our system works. I’ve been on the record for a decade now talking about the deep, structural problems in the US arts and culture sector. You and I agree on that point; we just disagree profoundly on what it will take to fix the problem.

  12. Richard Kooyman:

    The new language being used in the arts administration and art advocacy realms today originates in the writings of Charles Leadbeater who helped advise Tony Blair’s Labor Party to sell off liberal socialism for capitalism.
    The new models for art organizations and institutions which include the language of ’social inclusion’, ‘participation’, ‘public-private partnership’, ‘creative placemaking’ are not being attempted today because the old model of public support didn’t work. They are being attempted today because of the political pressure which intentionally killed the old model.
    The NEA had a successful granting program for over 20 years until it was systematically destroyed, first by the religious right, then by the conservative political right.
    This historical narrative is important to remember in attempting to move the conversation about cultural support forward.

  13. Diane Ragsdale:

    Adam, great post and thanks for the links to Jumper. A few thoughts:

    (1) one of my favorite definitions of “model” comes from a Stanford Biz School Prof who said, “A model is a representation of your beliefs about causality.” As I’ve said before, if the model is broken then perhaps our underlying beliefs about how our business works need to be reexamined. Your post addresses this brilliantly with some terrific solutions.

    (2) Just last week in my arts management course I presented a few slides on the English Chamber Orchestra. Derrick Chong highlights the orchestra in a chapter in his 2010 book on Arts Management and shares the following quote from the founding director of the ECO:
    “It is run on a completely different basis from any other orchestra in the world. [The others all rely heavily on government subsidy.] All our players are freelance; we have no such thing as a written contract, though it is understood that they will give the ECO work first call. There is no such thing as public money without strings. We have to produce the best produce. I find that pressure stimulating.” – (Chong 2010: p. 154)

    How does the orchestra keep these talented musicians despite offering them no permanent contract? Well, a few ideas are suggested: (1) the director is himself a musician and so there’s no “us” and “them” … they trust him; (2) the orchestra pays well; and (3) it hires talented musicians who appreciate the opportunity to work with other talented musicians. I would add that the orchestra is located in a city where these musicians can find other opportunities to work. In any event, it seems to be example of what you are proposing.

    I’m generally someone who advocates that institutions need to do *more* for artists not, less. But fulltime contracts and companies are not the only way to do more.

    (3) Regarding distribution … yes, yes, yes … and I would add to that we also need to think about reaching new markets with new products/services - those organizations that see themselves as “community-based” tend to embrace such ideas easily (reaching the DIY market, for instance) but I would argue that all arts groups could stand to think more creatively about how their existing assets and expertise could be recombined to offer new services to the community.

  14. Anita Lauricella:

    Good points. I am going to pursue learning more about Limited Leprechaun Partnerships. It might be the way to go.
    On the serious side, I would add the failure of philanthropic funding to support sustainable organizations to your list of magic bullets. The longer I do this work the more amazed I am by how much damage is done by poor philanthropy. It is a critical element of the capital structure for nonprofits and really should be more accountable and present in the conversations about crisis. Reworking how this money flows could help a lot of organizations.
    I think your points about “labor” are interesting but they ask the wrong question. Institutions with ‘highly skilled, unionized artists” seem to have attained a living wage for artists. We should all be striving for this level of livable wage, not demonizing it as the cause for the existential crisis. Not mentioned in your labor discussion is the role of “talent” or stars in cost structures. Like sports and corporate CEOS, the arts have bought the notion that paying exceptional fees for a select few, famous and sought after is the way to attract audiences. I have not seen data but I wonder if the same divergence between the 1% and 99% that we see in much of our culture is replicated in the arts. What is this doing to cost structures and long term sustainability? And should this be part of the conversation?

  15. Heidi Rettig:

    It’s easier to sell tickets than it is to get grants, but you can’t out-press release consistently bad [audience] experiences. A founder that can’t manage institutional growth and changes to patterns of arts participation won’t help either. If you don’t have a solid artistic product (and effective management) it’s unlikely that any organizational model will be effective.

  16. william osborne:

    Adam, Europe has an extensive network of agencies for collecting statistical data about the arts that includes funding levels, number of performances, attendance numbers, etc. You should use that concrete evidence for your conclusions and not subjective conversations with a few administrators. Administrative science should be formulated on evidence based conclusions. I realize we share the same goals. The profound differences seem to be that you think in more immediate terms and believe our private funding system can be repaired or adapted, while I take a much longer view and believe our system is irreparable and must be replaced with a public funding system.

  17. william osborne:

    Diane, without the cultural infrastructure in London created by public arts funding, the English Chamber Orchestra could not exist. London has five fulltime symphony orchestras and two fulltime opera houses, all of which receive ample public funding. Covant Garden and the English National Opera alone, for example, receive over 70 million dollars in public funding. This infrastructure creates a rich cultural environment and allows the ECO’s members to find enough work to survive. Without it, the orchestra would vanish. The reasons you give for the orchestra’s survival don’t add up. 1) The “them and us” mentality amounts to nothing if the money isn’t around to pay the musicians. And it is a fact that management and musicians often work well together even if the business director is not a musician. 2) The orchestra pays well because of the cultural infrastructure public funding has built. 3) In all good orchestras, musicians appreciate working with good musicians regardless of funding systems or management style.

  18. Richard Kooyman:

    More commentary on the language used in talking about new models.

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