Author: Schwarz, Samuel

Publication Year: 1982

Media Type: Book

Summary:

Abstract:

The performing arts: how do they survive? In this chapter, I will analyze the economic behavior of nonprofit performing arts organizations. In the first part a mode of analysis for such organization is introduced; next the focal point of the analysis, the well-known earnings gap, is discussed. Third, the analysis is applied to the behavior of a set of seventeen major orchestras over a period of three decades. In the final part, some conclusions are offered.

Performing arts organizations are generally in the not-for-profit sector. As such, their goal is not profit maximization but the dissemination of their services to the widest audiences, subject to 1) their individual budget constraints and 2) maintaining, or increasing, the present quality of their productions. For example, a symphony orchestra is not likely to switch to popular music, even though it could increase its audience immensely. Performing arts organizations derive earned income from ticket sales and other direct receipts from performances. The amount of earned income is limited by the number of performances live performers can give during a given time period and the seating capacity of the halls in which their performances are given. Hence, the organization can increase its earned income only by increasing ticket prices or fees for its performances. (269-279)

CONTENTS
Introduction.
The behavior of performing arts organizations.
The earnings gap as the center of analysis.
Empirical application: a case study of the major orchestras.
Conclusion.

Arts & Intersections:

Categories: Financial Management