What the Articles Aren’t Saying
10 Solutions to Challenges in the Arts & Culture Business Model the Journalists Haven’t Mentioned
It’s been…a minute since I’ve posted an article here. But it’s not because I haven’t been busy writing though; if you haven’t seen, I have a book coming out this February. Now that it’s off to production (exciting yet scary!), there’s so much I’ve been wanting to share, to write, to express that I’ll be posting about over the next few months leading up to publication.
Top of mind right now is the larger industry narrative and the slough of recent concerning articles. You’ve probably seen the headlines too: theaters pausing production, laying people off, or closing altogether; opera companies reducing seasons, cutting staff and productions, and support organizations shuttering; museums raising ticket prices to counter the decline in attendance; dance companies emergency fundraising; and classical music organizations facing similar versions of these challenges in the U.S. and abroad, along with continued criticism for lack of representation and even outright discrimination.
But none of these issues are pandemic specific problems.
New York Times theater reporter Michael Paulson, who spoke with 72 theater leaders about the challenges their organizations are facing, agrees: “The pandemic was an accelerant,” he writes. “But the issues at the heart of this crisis — the aging of the audience, the growing role of streaming media in people’s entertainment diets, the decline in subscriptions as the way consumers plan their theatergoing — were underway before it.”
Today the situation is dire, at least for some organizations. The arts and culture sector is navigating a fundamental disruption not due solely to some particularly challenging recent years, but rather due primarily to a tectonic shift in consumer behavior mounting over the last quarter century. And that’s the piece of the equation none of these articles are sufficiently covering.
At one point in time, art was viewed as a substitute for religion. Authors of a 2000 study on the evolution of arts management write that “in this context, museums are seen as the cathedrals of our time.” Later though, as society shifted away from the inviolability of religion, consumers began viewing art as part of a one’s education, a component of any well-rounded citizen. Consuming art wasn’t sacred, but it was essential.
And then, as public arts education declined at the same time the proliferation of media and information accelerated (cable TV exploded in the 1980’s, the Internet became publicly available in 1993, and public childhood arts education started dropping those same decades), things started to shift again. By the dawn of the new millennium, consuming art became squarely viewed as a leisure activity.
This swing made art consumption up to one’s individual taste, free choice, and therefore “more or less like any other economic sector” the authors of the above mentioned study conclude.
What do economic sectors need? Consumers. Consumer behavior is now a critical factor in the future of arts and culture, and its importance is not waning. So whereas many of the news stories have proposed solutions such as cost cutting (share set-building functions, for example) and institutional funding (more government support), I respectfully disagree that’s enough to combat the fundamental shift that’s taken place.
“The sector is navigating a fundamental disruption…due primarily to a tectonic shift in consumer behavior. And that’s the piece of the equation none of these articles are sufficiently covering.”
The following ten solutions are strategies that can help. Any one of these alone won’t solve the deep seeded issues (although I’ve seen some of them make quite the dent; more on that in the next post), but together are the building blocks of sustainability.
1. Center the Customer
If consumer behavior is what has shifted, we need to adapt. I don’t know that any of the recent coverage of the sector’s challenges has given marketing — in particular customer-centered marketing — it’s fair due as part of the solution.
“There’s a shared sense that box-office revenue, which has never been enough to sustain these organizations, is not going to be a primary part of the solution,” Paulson said in his reporting. That is true on the surface: it’s a fact that ticket revenue covers a shrinking percentage of most organizations’ budgets. But while box office revenue itself is not what’s going to solve the challenges we face, what’s also true is that people — in the form of audiences and ultimately donors — must be. If we don’t have patrons, we don’t exist. Long before it comes to that though, if we don’t grow the ticket buying customer base, we’re left with a shrinking pool of potential donors.
It starts with centering customer needs in our marketing and in-person experience (as opposed to centering the artist or organization, which works quite well when the art is a substitute for religion, but not when it’s a leisure choice).
2. Focus on Retention over Acquisition
I have written about this topic many times before (the two most popular are here and here). We say we need new audiences, but we first need to be better at keeping the ones we have when churn rates are up to 90% for first time attendees, around 50% for first year subscribers, and an average of 80% for first time donors (Sources: League of American Orchestras, Association of Fundraising Professionals). We are bleeding people at these critical inflection points: coming once and deciding never to return, buying a season ticket package and then quitting, and the holy grail of donating only to never renew.
Admittedly, it’s hard to think about patron loyalty and retention (how does this benefit me and my organization next year) when the short-term goals are so daunting (I need to balance this year’s budget right now). I understand; I’ve been there. And yet so have other businesses who know that an existing customer is cheaper to keep than getting a new one. Cheaper does not mean easier, and it takes discipline and operational processes to do this. It’s probably the bulk of what I work on with clients at this point.
3. Use Digital Content to Drive Analog Attendance
This is rightfully a confusing topic. During the pandemic, arts orgs had to rely on streaming as product substitute since we couldn’t do what we normally do in person. Now streaming content from the major platforms is a big competitor for consumers’ leisure time. And not to mention, streaming in particular is prohibitively expensive for most arts organizations.
All of this makes for an understandable bad taste in our mouths. What’s often missing from the articles reporting on our sector’s challenges, though, is how brands that also have a physical (analog) product are using their digital content to feed their in-person customer pipeline. Offering strong digital content is the playbook to attract new customers, lower barriers to entry, and bolster customer retention. We can learn from how companies like Amazon, Apple, and Disney use streaming as a vehicle to keep the customer buying what the firm really cares about: their in-person or physical products.
“It starts with centering customer needs in our marketing and in-person experience (as opposed to centering the artist or organization, which works quite well when the art is a substitute for religion, but not when it’s a leisure choice).”
4. Monetize Education Programs
For decades, arts organizations have targeted our education offerings in response to the declines in public arts education by offering childhood educational opportunities at low or no cost to the recipient. And while in some ways, this makes sense, many organizations are missing the opportunity before us to monetize these efforts, especially when we expand the education target from children to adults.
We have amazing examples of artists leading the way on this, plus a few enterprising organizations optimizing these revenue streams, too. And we have administrative educational opportunities on which some are also capitalizing. More on all of this here. In short, in an industry desperately seeking new and alternate revenue streams, expanding product offerings beyond the stage or galleries by developing high-profit margin education activities is at least one way forward.
5. Expand the Audience to Look More Like Our Communities
Maybe of all the solutions in this list, this one has been covered in traditional media the most. As we know, when our patron base is between 76–83% White depending on the artistic discipline, and our nation as a whole is only 60% White, arts organizations are clearly over-indexing on White audiences (Sources: NEA and U.S. Census Bureau).
It’s not that we don’t want less of our current audiences to attend, it’s that we want more of everyone else who has been historically underrepresented. What’s perhaps not covered as much by the writers is how we do this. Programming alone is not a singular solution, nor is hiring and contracting more diverse artists. It takes both those things in addition to looking at who is making these decisions on staff and on the board. When we start making changes in every part of our workforce — artists, administrators, repertoire/curation, and board — to become more authentically reflective of the communities in which we reside, then our organizations have a fighting chance at authentically winning over greater, more representative audiences as well.
6. Hire Fairly and Equitably
The arts and culture industry is rife with bias and inequity — even if often unintentional — and it’s keeping great talent at bay. Therefore, we will never see lasting progress on expanding our audience and donor base if we don’t simultaneously instill intentionally inclusive practices to attract and recruit the best staff and artists across the full spectrum of talent available.
There’s tons of research out there on how to hire fairly and equitably, all in service of building up strong, high performing teams. (I’ve detailed some research-backed best practices here and here.) If we get the people part right, the revenue will follow, assuming we can keep this great talent once we hire them…which brings us to the next proposed solution.
“When we start making changes in every part of our workforce — artists, administrators, repertoire/curation, and board — to become more authentically reflective of the communities in which we reside, then our organizations have a fighting chance at authentically winning over greater, more representative audiences as well.”
7. Fix Company Culture
I hear all the time from employees at arts organizations everywhere who are, at best, demoralized, overworked, stressed, and burned out. At worst, they face regular microaggressions, excessive office policies, and stifling management practices. It’s heartbreaking. But on top of that, it’s directly hurting our bottom line.
Working to create healthier workplace cultures achieves two things — and it’s not as touchy feely as you may think. First, a stronger company culture is worth $6,000 per employee, per year to the organization according to research in our field (if you want the data first hand, I did a podcast episode interviewing the lead researcher). We can talk about expense reductions and revenue strategies all day (and believe me, I can and do), but a massive opportunity for impact to both our employees and our ledger lies in improving internal culture.
Second, a healthier company culture directly correlates to higher productivity, greater outputs, and retaining the talent we’ve worked so hard to recruit per the step above. In a world where our organizations are so strapped for additional payroll and the human power we need to function, company culture isn’t just something that eats strategy for breakfast. Building a strong culture is a strategy in and of itself.
8. Break Down Silos
Us versus them. Artists versus administrators. Marketing versus development. Revenue priorities versus artistic priorities. We know there is a pervasive siloed mentality in our field.
So what do we do about it? Research has a lot to say here, too, from no name calling (sounds elementary, but most of us would be lying if we said we’d never spoken disparagingly about a colleague, myself included), to reconstructing the org chart in a way that more effectively serves the work ahead of us instead of perpetuating old siloed tropes.
“For everyone who says the challenges in the arts would be solved with robust government support, who do you think will go out and make that case if not ourselves?”
9. Engage in Advocacy
I know, I know…you’re probably thinking this is one more thing to add to the to-do list. And why should we take on one more thing when we have excellent partners in organizations like Americans for the Arts, our member service organizations (OperaAmerica, American Alliance of Museums, League of American Orchestras, League of Resident Theatres, etc.), and local and state agencies that are critical in their function? The reason is simple: research shows that nonprofits that advocate outperform their peers (read: generate more revenue; source: Leslie Crutchfield, Georgetown), and that consumers want brands to take a stand on issues they care about (Source: Accenture, Edelman). And it doesn’t take that much to help consumers feel values-aligned with us. This doesn’t mean we have to rock the boat a lot, but it does mean we need a north star — and by north star I’m talking about guiding values we adhere to and act on publicly, demonstrating for our local, state, and national legislators as well as consumers how we use our platform for good.
Plus, for everyone who says the challenges in the arts would be solved with robust government support, who do you think will go out and make that case if not ourselves?
10. Double Down on Pursuing Relevance
The thing about relevance is that we don’t get to decide if we’re relevant. Consumers are deciding that with their wallets in the form of patronage, word of mouth, and ultimately donations. The good news is there are commonalities among the most relevant brands which have been measured and tracked over many years now: being customer obsessed, ruthlessly pragmatic, distinctively inspired, and pervasively innovative.
There’s a lot to say to unpack those pillars of relevance, but for now, top brands we can’t live without maintain their hold on our hearts not by accident. Arts organizations can absolutely also systematically pursue the goal of having an indispensable place in the lives of patrons, donors, and broader society. Maybe then we can offer something religion and education can’t: belonging, awe, a sense of being part of something bigger than yourself where people feel welcome and unintimidated, and altogether, exceptional live experiences people just can’t live without.
This future is possible. It won’t happen on its own, but we can build it.
The Story Doesn’t End Here
So often for big, complex problems, people want big, sweeping solutions. A silver bullet. “Cut costs.” “Program blockbusters.” It’s human nature to want a single, slam dunk solution. But the opposite approach is what more effectively drives transformation, say business professors Chip and Dan Heath. It’s best to “shrink the change,” they write, executing multiple steps and strategies. Big results are made of many smaller steps. This is the story I wish more of the articles were telling.
These strategies offer a start. I’ve seen them work, inside and outside the arts. And for as many concerning headlines getting attention, I’ve seen equally as many organizations employing each of the strategies I mention above — and sure enough, they’re bucking the trends, growing audiences, raising money, seeing changes in their staff composition, and building organizations that will be around for years to come. I plan to share about a few of them right here in my next post.
Interested in more data-backed strategies to grow revenue at your arts organization? Order my book, Run It like a Business: Strategies to Increase Audiences, Remain Relevant, and Multiply Money — without Losing the Art.
You’ll learn how to:
- Grow audiences and keep them coming back again
- Make our organizations more inclusive
- Get younger attendees in the seats and on the donor rolls
- Generate millions more dollars in revenue
- Continue to create the art we love — without the stress of figuring out how to afford it
Just because your arts organization is a non-profit, doesn’t mean it shouldn’t make money; it means the money the organization makes goes back to fund the mission — whether that’s music, visual arts, theatre, dance, or one of many other mediums that enrich our lives.
About the Author
Hailed as “the Steve Jobs of classical music” (Observer) and “Sheryl Sandberg of the symphony” (LA Review of Books), Aubrey Bergauer is known for her results-driven, customer-centric, data-obsessed pursuit of changing the narrative for the performing arts. A “dynamic administrator” with an “unquenchable drive for canny innovation” (San Francisco Chronicle), she’s held offstage roles managing millions in revenue at major institutions including the Seattle Symphony, Seattle Opera, Bumbershoot Music & Arts Festival, and San Francisco Conservatory of Music. As chief executive of the California Symphony, Bergauer propelled the organization to double the size of its audience and nearly quadruple the donor base.
Bergauer helps organizations and individuals transform from scarcity to opportunity, make money, and grow their base of fans and supporters. Her ability to cast and communicate vision moves large teams forward and brings stakeholders together, earning “a reputation for coming up with great ideas and then realizing them” (San Francisco Classical Voice). With a track record for strategically increasing revenue and relevance, leveraging digital content and technology, and prioritizing diversity and inclusion on stage and off, Bergauer sees a better way forward for classical music and knows how to achieve it.
Aubrey’s first book, Run It Like A Business, published in February 2024.
A graduate of Rice University, her work and leadership have been covered in the Wall Street Journal, Entrepreneur, Thrive Global, and Southwest Airlines magazines, and she is a frequent speaker spanning TEDx, Adobe’s Magento, universities, and industry conferences in the U.S. and abroad.
