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British Far East Holdings Ltd. by: Arthur Lipper III, Chairman, British Far East Holdings Ltd.
Wednesday July 20 2005 at 10:59:25 AM EST

The Economics and Future of Culture vs. Show Biz

San Diego, California USA - Who is the customer and what is the unique benefit being offered?

This is a basic marketing question which must be asked and answered by those directing the operation of businesses such as cultural institutions. For there to be economic viability, absent continued solicitation and receipt of donations, the survival of any enterprise requires the knowledge of what present and prospective customers want and are willing to pay for.

When one attends traditional cultural events and visits museums the preponderance of older customers observed must be worrying to those responsible for planning the future of these institutions. In this country, almost by definition, the market for traditional culture, that which prior generations have found meritorious, is but a fraction of the total population or market.

Show business has survived and prospered by appealing to increasing segments of the population. Show business is and must be "popular" as it depends on the immediate sensual gratification by its customers.

In too many cases, erudite and arrogant museum curators and theatrical artistic directors and their all too often captive and well meaning governing boards believe they know what their customer audiences and visitors should want or even need to have presented. The thought that prospective customers for cultural events have their own definable wants is either of little concern or perhaps worrying to many having the power of artistic offering selection. Any yielding to such popular wants is all too frequently seen as a threat to the institutional mission and integrity of the artistic director. In show business, which depends solely on customer satisfaction, revenue generated is the measure of success. Those associated with large and increasing revenues are rewarded and those unable to generate revenues are not allowed to be in decision making roles as to artistic offerings. Of course, it may not be that much different in many of the successful not-for profit institutions.

What will happen to the arts when there are no National Endowment of the Arts funds and the mission of grant making foundations shift in focus? The answer is clear. The offerings will rapidly gravitate to what a broader population segment, than present supporters, want and are willing to pay for. The question is "Why wait for the inevitable reduction or elimination of grants before changing the menu to attract more customers?".

Who is the customer and what is the product or service they want and are willing and able to pay for? Film and theatrical producers have to be able to predict and be both responsive and subservient to customer demand. Artists, to be commercially successful, must produce works which are sufficiently appealing to customers for purchase to be predictable.

The cost of theatrical and musical production is high and going higher with the resultant increase in ticket prices pushing what many believe to be limits. Of course, wage and work rule agreements with artists and the unions representing those thought to be necessary are responsible for much of the increase in costs. Therefore, it has been easier to yield to the demands of labor and charge more for tickets and strive to get more grants than to aggressively address the cost of production issues. Attracting and using volunteer ushers and running advertisements in programs and on the backs of tickets is not a sufficient solution. Longer runs and fuller houses would be a more logical objective and a fuller use of available technology could well be a means of achieving such results.

There might also be a bundling of offerings in that ticket subscriptions might include recordings and DVDs of the productions. There might also be customer interest related lecture, movie, book or catalogue offerings made to museum and exhibition attendees and members.

It is also possible there could be a combined cultural offering in a city where competing event sponsors such as; concerts, opera, dance groups, theatres, museums and other producers of cultural product joined together for a "united fund" sort of subscription offering. There is a lot of waste in the promotion and marketing of the arts and perhaps a combining or pooling of resources could be of mutual benefit.

Most importantly, there should be a polling of the customers to learn their wants as to artistic product offerings and a shaping of programs reflecting the wishes of the customers.

The July 17, 2005 New York Times article describing the creative and aggressive activities of the Los Angeles County Museum of Art "What Price Love? Museums Sell Out" by Michael Kimmelman - Museums are putting everything up for sale, from their artwork to their authority. And it's going cheap" is interesting reading and highlights an inevitable trend of museums edging closer to show biz. Museums are buildings housing and displaying objects judged to have value. However, to be valuable to the public, justifying public support, the museum has to attract sufficient public attendance to warrant the support and thus finds itself in show biz.

I am not sure what rock concert promoters or movie producers have to learn from museum curators or symphony and theatrical artistic directors but am sure that these dedicated and learned individuals, and their governing boards, have a lot to learn from those who live or die by box office revenues.

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Author/Correspondent's Profile: Arthur Lipper III, Chairman, British Far East Holdings Ltd.