Box office democracy

Pleading with the old donors or courting the new, opera's got its work cut out for it in the new art economy. Scene from Carmen at the Royal Opera House, Covent Garden.

The Canadian literary magazine Descant is a gem. Not only are the writing and art generally good, but the distinguished crew that produces it are given space each issue to sound off on a special topic. The winter 2012 issue (Descant 159, Vol. 43, No. 4), themed “A writer’s guide to melancholia,” carries excellent essays by contributing editors Kay Armatage and Mark Kingwell. Both follow the melancholy theme, Kingwell on grammar, Armatage on arts funding. Kingwell mourns the passing of the serial comma, while Armatage laments the passing of the serial donor.

Armatage has been studying the Metropolitan Opera’s investment in high definition broadcasting to movie theatres and in so doing, uncovers some important aspects of the new art economy.

The Met broadcasts further the innovation of their famous Texaco-sponsored radio broadcasts, which, though highly successful in reaching audiences (11 million listeners in 42 countries), actually cost the Met money, buying air time on many stations.

By contrast, the cineplex broadcasts (cinecasts) are ticketed events, revenue generating for the theatres and for the Met. But, Armatage points out, the Met’s motivation can’t  only be to make money because after five years and 45 broadcasts costing about $1.1 million each, the Met has just begun to make a profit and a very modest one at that ($11 million in 2011), a “drop in the bucket” according to Armatage.

If it’s not about the money then, Armitage asks, are they perhaps striving after some ideal of democratization; bringing art to the masses, eliminating the distinctions between high and low? Closer to the mark, she says, but still not a bull’s eye. Radio is truly free, whereas the cinecasts, while not ultra expensive like attending the opera, are still far from free.

Armatage concludes the grail the Met is after is not exactly to be more inclusive so much as to find altogether new audiences. The need to do so is urgent: The average age of Met subscribers is 65, she notes.  Moreover, the regulars are not like you and me; they are rich, really rich, ponying up big bucks for box seats and making substantial donations to boot.

So the question the Met’s cinecasts are posed to answer seems to be how to replace this aging audience and their old-fashioned type of patronage. Armatage has to admit that the cinecast initiative shows promise: already reaching 2.4 million people through 1,500 theatres in 46 countries, and poised to expand into Russia and China.

And the money isn’t just in the ticketing. Donations have correspondingly increased, by 50% in 2012. Although half of that still comes from the Met’s board of directors, according to the Met’s CEO Peter Gelb, the new millionaire donors are going to be found in those new audiences.

A similar change in audience-economies can be seen in the film business. According to an article in The Economist (February 23rd-March 1st, 2013), Hollywood movie revenues are stagnating while TV is more popular and profitable than ever. This summer, for the first time in as long as I can remember, networks are introducing new programs and not just playing reruns.

To make up for  lost theatre revenues, Hollywood has come to rely on downstream revenue from DVD rentals, sales and now downloads through digital subscription services. But like with the Met’s cinecasts, this diversification doesn’t pay as much or as consistently as the old revenue models. According to analysts,”people are still watching the same amount of movies that they did a few years ago, They’re just spending $6 billion less a year to do it.”

Lower rates of return are endemic to the new media environment. In the same way that digital advertising rates for online magazines do not produce returns the way print advertising did, or ebook sales don’t yet make up for losses in hard copy book sales, movie distribution deals in new markets like Russia and China pay producers lower rates than the domestic standard percentage.

So here is the rub for the new art economy: new audiences promise to replace the disappearing, smaller but richer ones who paid more for tickets and donated more, but those new audiences typically pay less for digital delivered media. How much bigger the new audiences need to be, how much they’ll pay to be served and whether they will donate significantly all remain to be seen.

For the time being, producers, whether in the movie business or the opera business (or publishing for that matter) have little choice but to gamble on the new digital media: risking more, taking less profit while pushing their products further into unmapped territory.

While the revenue models are uncertain, there’s little doubt the wider audience is there.  It’s just a question of how to wring the right amount of money out of them. In 2012, Lionsgate, an independent movie studio and distribution company, made one of its movies available in theatres and on video-on-demand at the same time, with the happy result that it produced three times as much revenue as it would have done otherwise, because, in the words of Lionsgate chairman Michael Burns, it “found two different audiences”.

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To follow this topic on Twitter, search the hashtag #artecon.

 

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