Symphony orchestra, Repertoire, Funding, Z11,

We examined the relationship between funding sources and programming for major US symphony orchestras for the 2001 through 2007 seasons. We find that increased levels of funding from the federal government and businesses encourage more nonconventional programming, and increased levels of funding from local government and endowments encourage more conventional programming. In addition, yearly events such as a composer's anniversary and higher unemployment influence programming decisions. Given the challenging financial environment for symphony orchestras, we discussed programming choices that managers could implement to reduce budget deficits.

JEL Classification: Z11We examine the fixed subscription ticket market for U.S. symphony orchestras, which is a crucial element of their business model and has experienced declining sales in recent years. We find that subscription ticket buyers are more sensitive to price changes than total ticket buyers. Hiring a new music director may increase subscription ticket sales, and economic downturns will decrease ticket sales. We find that increasing flexible subscriptions contributes to a decline in total subscription tickets and single ticket sales, in general. In addition, with increasing advertising costs per attendee and falling revenue from fixed subscriptions, symphony orchestra management should consider ticket prices, which have risen significantly in recent years, more strategically. | INTRODUCTIONSymphony orchestras (SOs) in Philadelphia, Pittsburgh, Minnesota, and Atlanta, among many other cities, have experienced serious financial challenges in recent years. The bankruptcies, labor disputes, and deficits that are afflicting U.S. SOs are indicators of the numerous problems that plague the industry. In his examination of SO finances, Flanagan (2012, p. 171) notes that "Symphonic music has probably never been performed better then today, yet orchestras at all levels of achievement confront ongoing levels of economic distress."A major concern contributing to this gloomy outlook is declining fixed subscription ticket sales; with a fixed subscription, attendees purchase a season's subscription to the symphony. The SO business model has been based on such subscription ticket sales for over a century, but especially after Daniel Newman's (1977) arts marketing book Subscribe Now! (e.g., p. 15). Not only have subscription tickets been the major portion of performance revenues, but they are also vital for the success of the organization for other reasons. First, fixed subscription tickets encourage patrons to attend concerts regardless of the weather, program, or soloists, whereas single ticket buyers, who can be capricious, may choose to not attend a performance for any of those or other reasons. Johnson and Garbarino (2001), in a survey of a repertory theater company, found that subscribers were more satisfied with familiar rather than famous performers and were more accepting of diverse repertoire.Second, subscribers are much more likely to be consistent donors and provide legacy gifts. Johnson and Garbarino (2001) reported that, "Subscribers have higher levels of satisfaction, trust and commitment, and have more positive intentions of supporting and donating to the organization." In 2014, for example, previous or current subscribers contributed 88% of SO's private donations (Desai, 2015, p. 14).Third, subscribers who are regular attendees become better educated about performances, guest artists, and repertoire. In addition, such attendees are likely to purchase additional individual single tickets for friends and family. Finally, it is much more expensive to sell single tickets. Drawing audience members for a ...

No abstract