Thursday, August 25, 2011

Why Theatres Fail

The Roses of Success

As I reach the end of my master’s program in entertainment business, I thought I’d take a look at reasons why many theatres fail. It happens all the time. Most of us tend to only hear about the major failures. Does this mean live theatre, as we know it, is dying in America? Not hardly.

According to the 2008 National Endowment for the Arts survey, nonprofit theatres with an annual budget of $75,000 or more have doubled in the past 15 years. That’s the good news. The bad news is that audiences for non-musical plays have steadily decreased from 13.5 to 9.4 percent of the general population.

The NEA survey goes on to state that theatres are doing a good job of balancing earned income against contributed income. A good job? The report states that earned income fell 13 percent since 1990. I’m unsure how they see this as a good thing. In fact, I believe the dependence of theatres on contributions is one primary reason some theatres fail.

I am all for public support of the arts... but at what cost? I understand funding new companies, new work, experimental programs and arts education outreach programs. Where or when does it stop? I think it’s time for theatres in America to start being held accountable for their financial responsibility and stop using ART as an excuse for not running their operations as a business.

I know I could take a lot of flack for that statement but it’s true. I’m really sick of hear how the arts are not profitable and can’t sustain themselves. Does this really make any sense? What about the over one billion dollars in Broadway grosses earned by commercial theatres?

Art is everywhere around us. If you breathe, hear, touch or see...then you experience art every minute of the day. Yes, popular art forms change and some disciplines have their ups and downs but all art forms are crucial to our society.

I believe if those in the theatre community would stop lamenting the pending death of live theatre and focus their energies on promoting and celebrating it; the public negative connotations might just disappear.

Here are some of the reasons I think I think theatres fail:

Poor Financial Management
According to the NEA, the majority of theatres in the United States rely on government and private funding for half of the operating costs. I feel this is irresponsible and does not promote the sustainability of the company. Outside funding cannot be depended on, especially in a weak economy. I would term this as “living beyond their means”. Unless it is corrected, the mounting debit will far outweigh the income and lead to the company’s demise.

Bad Programming
Plain and simple: you have to know your audience. Many theatre companies successfully challenge their patrons with one or two productions a season that it outside their normal offerings. I think this is terrific. I think it should be the mission of every theatre to educate and expand their audience’s exposure to unfamiliar work. Unless your entire mission is based on producing new and/or experimental work, to suddenly present a season that moves far away from your established genre can assure your subscribers won’t be coming back.

Ineffective Marketing
Marketing is rapidly changing with new technology and its affects on our daily lives. Theatre companies have to constantly re-evaluate the effectiveness of their marketing and stay with the current trends. Ultimately, I think the area where most theatre fail is creating a personal relationship with their community. Word-of-mouth continues to be the number one reasonpatrons chose to attend specific shows. More theatres need to focus on this.

The Wrong Staff and Board
Staff and board structures are frequently known to be love-hate relationships. There has to be a respect and balance between the two. Theatres can fail when a board suddenly (or finally) decides to clear house and replace the artistic leadership. Obviously, there are times this needs to happen. It is a huge mistake for any theatre company to base its entire future on one individual and their reputation. Board and staff members should be constantly communicating how to better the company. Allowing the focus to shift from the company to an individual is one clear way to destroy a theatre’s future life.

The Elite Effect
Arts organizations, as a whole, have a reputation of being elitist. This persona hinders growth and creates a wall between them and the patrons they purport to serve. Granted, much of this is not intentional, but changing a company’s image once it has been established can be nearly impossible. Companies and the art they produce needs to be completely accessible to the entire community. Branding, image and reputation play a huge role in the success or failure of theatre companies around the world.

CultureBot’s  Jeremy M. Barker has written a great response to an article about failed theatres in Seattle. He provides an interesting commentary, as does the original article on which it is based.  I do have to disagree with his assessment that theatres should not be more “business-like”.  How many business do you know of  (yes, theatre is a business) that rely on 50% private and government support? 

I believe if the art is good, it can be created and exhibited in a business-like fashion without compromising the art. It may not always be profitable, but that isn’t the point. The point is that sustainability and financial responsibility need to be taken into consideration when deciding how or when art is produced and displayed.

Theatre companies can take risks with works that are outside their normal genre or that may be considered too risqué or experimental; they just need to be balanced with the creation and presentation of work they are familiar with, and their audiences expect of them.

On a somewhat related topic, I found this interesting article on the privatization of community organizations and services you should read. Could this be our future?


  1. Jeff--Jeremy Barker from Culturebot here. I just came across your post, and thought I'd respond. First, thanks for the shout-out, it's always appreciated. Second, though, with regards to my comment about it being bad for arts orgs to behave in a "business-like" fashion...

    Within the context of the piece, I was referring to how that usually gets brought up when things go wrong, and the reason it bothers me and I think it's bad is, I guess, the usage or what people seem to mean by it. Let me offer a counter-factual: imagine the Intiman hadn't collapsed because of its business practices. Imagine it had run several years of seasons that ended in the red, delivering the critically praised and popular work Bart Sher was responsible for, and then managed to keep Kate Whoriskey going in the drivers seat for a year or two, until it was back in the black through a hefty fund drive in a better economy. (In fact, I suspect that the economy played the decisive role in what happened, but anyway...) Would you suppose that a single story would have been written about what a great business move that was?

    First of all, most arts writers (myself included) don't do too much digging into the bottom line of the orgs we cover, and that is a problem. But beyond that, that sort of story is contrary to what we assume organizations should be doing. Ending seasons in the red is BAD, right?

    But it is business-like, actually. It's taking a risk, borrowing money in the short term for some longer term goal. If the Intiman had survived, it would be undeniable that the support it received to sustain it was due to the very artistic successes that drove it into the red. Even absent a profit incentive, you can still expect a benefit from the investment. But no one would write a story about entrepreneurial risk taking in the non-profit arts world. At best, it would be a story about disaster-averted. More likely, it wouldn't be noted at all.

    Mind you, I don't really think that what happened at Intiman was so well thought out or planned as my counter-narrative suggests, but we're being philosophical here...

    My point is that there's a difference between being more "business-like" and being "sustainable," but when people use the former, they tend to mean the latter. I DO want the arts to be more business-like insofar as they should take real risks with the business model used to produce work. But that is not remotely making "sustainable" decision. Sustainability is an impulse against innovation, which ultimately hurts the artistic component of the work. It's a philosophy primarily driven by administrators at organizations who--like pretty much everyone anywhere--are fundamentally concerned with preserving their jobs.

    Which leads me to the main point of my post: the institution is not actually the most important thing, it's the work. What's good for the art may not be good for the institution. The Intiman going belly-up was clearly the least desirable outcome for them, but it purged an unproductive suck on arts funding from Seattle and in the process, if the early reports of its re-opening are to be believed, created new opportunities for local artists who were increasingly being marginalized by the large theaters in their own community. I'd say that's a happy ending for almost everyone except for the staff of the Intiman, and while I feel for them (and have been chastised by one of my own former editors for seeming indifferent to people losing their jobs), I have to point out that precious few people ever screamed bloody murder as local artist founded organizations slowly transformed themselves into subsidies for Broadway, workshopping shows and employing NYC and LA actors.

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  3. Jeremy,

    First, I'd like to apologize for taking so long to respond. I totally agree with the points you make both in your article and your comments here. I did understand what you were trying to express.

    In my experience working with small nonprofit non-equity companies and community theatre groups, I've found very little efforts to meld the business and artistic efforts towards the best interest of the organization AND the work itself.

    Though I don't like the idea of Art being controlled by the almighty dollar, I do believe organizations need to be more responsible in their efforts and do their very best to provide the best outcome for the work itself and the organization as a whole. It may be an issue of timing, financial feasibility, or many more contributing factors. The question is: Is a particular work worth jeopardizing the health of the organization if the means are not there to successfully produce it?

    I believe, where there is the will, there is the way. Any decision needs to be carefully thought out and completely supported by the organization as a whole. The development of new, true Art requires risk. At what cost?