EMCC European Monitoring Centre on Change

The performing arts sector - visions of the future

This second article in the series focuses on the main factors influencing the present and future of the performing arts sector. It builds on the first article, which described the salient features of the sector, in particular, the size and structure of its market, the nature of employment, and issues and uncertainties facing the sector. It examines the main trends and drivers shaping the sector’s future, including the forces that are leading to a reduction in the public funding available to the performing arts.

Political, economic and technological forces are underpinning some longstanding characteristics of employment in the performing arts sector, namely, the high proportion of part-time and short-term jobs, and of self-employment. At the same time, technological developments provide greater resources to performing artists, or others, to promote and market their work, thus facilitating the persistence of micro-enterprises in this sector. However, digitalisation and the Internet are also bringing the transmission of performing arts products increasingly under the control of wealthy media companies or broadcasters. Their position, too, may soon be threatened by the transmission of television and films through the Internet, using enhanced broadband. The overall tendency is towards greater uncertainty for those working in the sector. One partial solution would be to further develop the role of the performing arts in activities outside their traditional domain.

Trends and drivers of change

STEEP analysis

The following table summarises the STEEP (sociological, technological, economic, environmental and political) factors affecting, or expected to affect, the performing arts sector.

Table 1: STEEP analysis and possible future of the performing arts sector
Trends and drivers Possible future of the performing arts sector
Sociological
Patterns of employment Part-time work, short-term contracts and self-employment have long been a characteristic of the performing arts, and they are becoming more pronounced.
. The already high proportion of micro-enterprises will increase further.
Technological
Digitalisation of content in combination with transmission through the Internet This enhances the possibilities for promotion and marketing among micro-enterprises; however, it also places transmission in the hands of wealthy media groups.
Economic
Dependence of live performing arts on public funding, private sponsorship and public service broadcasters There is a tendency for public funding and private sponsorship to be directed towards more established and prestigious activities, i.e. towards ‘high culture’. In many countries, public service broadcasters become more commercial and, when they are not, they have fewer resources for the performing arts.
Audiovisual sector as a source of employment and a means of urban regeneration This is the favoured direction for public support of performing arts. It leads to new buildings for live performing arts and helps small companies in their start-up phase.
Globalisation A few groups are becoming increasingly powerful across the whole range of media.
Environmental There are no distinctive or important environmental issues in the performing arts at present.
Political
Political environment In many countries, there are strong political and social forces in favour of protecting traditional culture, as well as an ethos of public support for the arts. However, these are curbed, to some extent, by financial pressures and are also being crowded out by the interest in audiovisual technology as a source of employment.

Sociological drivers

In contrast to other sectors, flexible employment is the norm in the performing arts sector. The Eurostat study, Cultural employment in Europe (see European Commission press release, 2004), drew attention to the high (relative to total employment) incidence of part-time, temporary and self-employment in the cultural industries. There is reason to believe that the incidence of ‘non-traditional’ employment is even higher among performing artists than is shown in the Eurostat statistics. These statistics apply to the whole range of cultural occupations (librarians, writers, performing artists, architects, etc) and to employment in the cultural sectors (ranging from cultural producers, e.g. writers, composers, to technicians and administrators). Several of these occupations provide a source of traditional, full-time and permanent employment. Looking at the situation of performing artists in isolation, however, their employment pattern appears to be quite different.

The nature of performing arts activities requires a high proportion of part-time or limited contracts according to the 2001 study on Innovative developments and good practice that is promoting and safeguarding employment in the live performing arts sector in seven EU countries (pdf 823kb) by International Intelligence on Culture. Apart from the major, established orchestras, most musical groups (whether classical or popular) have seasons, particular performances and tours, with intervals in between when they are not performing. Actors with either major or minor parts are required when films are being shot, but not at other times. Many theatres also have seasons with breaks in between. The intermittent nature of production and work is also evident in the production of dramas and films for radio or television. Even those who are retained on long-term contracts - in orchestras, acting groups, film production companies, as actors in television or radio soap operas - work intermittently. While the famous can command high salaries, the majority have rather lower incomes.

In this context, it may well be the case that references to ‘self-employment’ or ‘part-time employment’ in the performing arts are euphemisms for periods of unemployment.

This pattern of activity in the performing arts sector goes a long way towards explaining why there is such a high proportion of small or micro-enterprises in the sector. Under these circumstances, it is hardly surprising that relatively high numbers of performing artists are engaged in activities across the spectrum of their particular art, or also have jobs in other fields. Members of successful choirs and orchestras, for example, are often employed in quite different occupations and come together for rehearsals and performances. The nature of performing arts activities is not likely to change, particularly as funding is tight. Consequently, the patterns of employment are likely to remain fragmented and intermittent. Training can help to prepare performing artists, and those who are considering a career in the performing arts, for the conditions of their employment, in particular, by developing business and organisational skills. At the same time, there are opportunities for those who can use their business skills to promote and organise the work of performing artists.

Technological drivers

The audiovisual subsector of the performing arts is most directly affected by digital technology. Sound, pictures and films can be transmitted in digital form by cable or satellite. In the near future, an increasing number of households will have the broadband capacity to receive television programmes or films in real time from the Internet, without having to download and store them before playing them. The same technologies also affect the live performing arts, due to their impact on companies in the audiovisual industry. The live performing arts depend, to a large extent, for work on companies in this industry. Television and radio companies commission new dramas and films, make new productions of existing dramas, show films and videos, broadcast concerts, commission music, and play recordings of music. As broadcasting companies focus more and more on the digitalisation of their products, it reduces the amount of money available to broadcasters for the live performing arts.

The performing arts also feel the more direct effects of digital technologies and the Internet. Arts companies or individuals can now promote and advertise themselves on the Internet and use digital resources to aid their own productions. This puts them on a more equal footing with other sectors using the resources of the web. It also increases the significance of the skills of web and graphic designers, marketing and PR experts, or encourages performing artists to develop their own skills in these areas. This partly explains the range of activities in information and communication technologies (ICT) that are now ancillary to the performing arts.

ICT also brings a vast range of what used to be called ‘special effects’ within easier reach of small production companies, and allows the development of new ideas in graphics and animation, for example.

In relation to transmission to audiences, digital technology in collaboration with wireless communications and the Internet widens the range of channels, e.g. digital television via cable or satellite, home computers, mobile phones and iPods. However, transmission, particularly of moving pictures, is expensive and beyond the resources of most small or medium-sized production companies. In the UK, the fees of GBP 17 million per year, paid by ITV for having its three channels transmitted on Freeview, are an indication of the level of expense involved. Much may change, however, when enhanced broadband becomes widely available which enables films to be retrieved directly from the Internet. At present, pay-TV companies buy transmission rights to films and this benefits film producers; the pay-TV companies need these transmission rights in order to attract customers. However, this arrangement is set to be threatened by the future availability of films and television programmes via the Internet. Thus, similar problems could arise to those encountered by music recording companies in combating piracy and illegal transmission of copyrighted music over the Internet. An answer may be found similar to that of low-cost legal downloading of music recordings, which within the last few years, has sharply reduced the incidence of Internet piracy. For the immediate future, however, dissemination of artistic performances, outside the traditional media of live performance in front of an audience, depends on the finances of broadcasting companies and large media groups.

Economic and political drivers

As outlined in the first article of this series, economic and political drivers are closely linked and often amount to different aspects of the same driver. Therefore, it makes more sense to treat them together, since their possible effects on the future of the performing arts can be understood best when they are examined together.

In Europe, the performing arts sector as a whole depends on public funding and private sponsorship, and also on both public service and private/commercial broadcasting companies. The live performing arts also receive revenue from their audiences. The dependence on public funds and private sponsorship are very old European traditions, based on a complex web of beliefs about the value of the arts in terms of national prestige and their social benefits. These beliefs partly explain the willingness of banks, for instance, to sponsor concerts or of commercial companies to finance television dramas, a practice that is probably more common in the US than in Europe. The same beliefs explain why the state provides support to theatres, opera and other kinds of music. In some countries, notably in the UK and France, this support is largely given to national theatres and opera houses in capital cities. In others, e.g. the Netherlands and Scandinavian countries, state support is also given to local theatrical and musical groups. In Germany, the decentralisation of administration means that the Länder (regional governments) rather than the federal government provides support for ‘high culture’ and funds public service broadcasting. A series of decisions by the German Constitutional Court has confirmed that the Länder rather than the federal government have the final decision in all matters relating to broadcasting.

While state support for live performing arts is likely to continue, the extent of this support is already being restricted in most European countries. This is partly due to budgetary constraints, however, other forces are also significant. One important factor is that the audiovisual sector as a whole has provided a significant source of employment in recent years. A second important factor is the belief that, even without the contribution of the audiovisual sector, the performing arts have an important role in employment creation and urban regeneration, but only as one part of the multifaceted ‘recreation, culture and sport’ composite. These two beliefs have resulted in a situation whereby funds are made available for performing arts activities within wider projects of urban renewal, and for media or science parks in industrial areas around cities. As more funds are directed towards such activities, the amount of public funding available for the live performing arts is likely to diminish.

The previous article highlighted some recent examples of the two complementary strategies aimed at economic revival, employment growth and urban renewal. In the cities mentioned, the media parks or new theatres, concert halls or opera houses all had their place within this wider context. The media park in Barcelona, for example, is part of a comprehensive plan for redeveloping the waterfront and the Llobregat Delta. In Germany, the development of media cities, such as Leipzig and Berlin, mark the latest phase in the rebuilding and renovation of these cities, following the end of the communist regime. Nonetheless, placing the audiovisual segment of the performing arts sector within the wider context of support for high-technology industries, given their potential for urban regeneration and employment, heightens the risk that live performing arts will receive a smaller share of public funds, unless there are other strong political and social reasons for supporting them. Where such reasons do exist, it is still more likely that public funds for performing arts will be concentrated on the most prestigious companies and buildings in national capitals. These risks are lower in Germany, because of the role of the Länder in public funding of the arts and the long-established tradition of supporting high culture; they are also probably quite low in the Scandinavian countries.

The other main source of finance for the sector is television and radio broadcasting. The Euromedia Handbook 2004 provides summary accounts of film production and television and radio broadcasting, country by country, throughout Europe. This information clearly indicates that, with very few exceptions, television and, to a lesser extent, radio play a key role in supporting the performing arts through commissioning films, employing actors and broadcasting music. In many countries, public service broadcasters are required by law to devote a certain amount of their programme content to cultural production, either to promote national culture (as in Denmark and Hungary) or culture in the broader sense.

In contrast, the cultural content of commercial television tends to be more entertainment-focused. Nevertheless, the long-established difference between the artistic and cultural orientation of public service and commercial broadcasting is beginning to diminish due to financial and political pressures. Increasingly, the resources available to public service broadcasters for the performing arts are decreasing as a proportion of their total budgets. The broadcasters face the additional costs of having to adopt digital television when their revenues are already under significant strain. The effects of this are already evident in some of the new Members States in the EU. In Hungary, for example, public subsidies are necessary for funding, since the two main sources of broadcasting finance - the licence fee and advertising revenues - are insufficient by themselves. When these subsidies are reduced, public service television has to cut back its activities and so, although Hungarian public service television used to be a major film-maker, it has virtually abandoned this activity. In Poland, financial cutbacks in the late 1990s led to severe reductions in the support given to film-making by Polish TV and Canal Plus Polska. Conversely, in the Czech Republic, Czech TV is the major source of subsidies for cultural activities in Prague and an essential support to feature film-makers. However, in western Europe, most public service broadcasters are being forced to cut costs. In these conditions, it is normally less expensive to buy in ready-made programmes than to commission new work involving performing artists.

In western Europe, most public service broadcasters now depend on advertising for a substantial part of their income; only in the UK, Sweden, and the Flanders region of Belgium is the licence fee the sole source of revenue. As a result, public service providers are becoming more oriented towards the type of radio and television run by commercial broadcasters. In Italy, where the RAI receives 50% of its income from the licence fee, this process of commercialisation was set to go even further. In 2005, the government had intended to sell a stake of between 25% and 30% in RAI, until the process was halted due to a parliamentary defeat in June 2005; the possible privatisation of RAI will now wait until after the election due around May 2006. In the UK, although the BBC is to have its charter renewed from 2007 and will continue to receive the licence fee, it is not clear if this position is sustainable for many more years.

Trend and driver linkage

Figure 1: Trend and driver linkage

Scenarios for the performing arts

Scenario studies on the performing arts, especially in a European context, have proved difficult to find. In a sense, this is surprising considering the interest of the European Commission and other policymakers in the role that the audiovisual sector and cultural employment could play in employment generation, and in their potential for acting as a unifying force within Europe, by developing a sense of ‘European citizenship’.

The scenarios presented here therefore pertain to the US. Because of the dominance of the US in many areas of audiovisual arts, as well as live performing arts, projections of possible futures for the US industry hold many lessons for Europe: the financial, social and technological challenges facing performing arts in the US are thus similar to those faced in Europe. Even though the US has some of the largest arts and audiovisual companies in the world, its performing arts sector is fragmented, as it is in Europe. Both continents show a sharp distinction in the audiovisual field between non-profit organisations producing high art and traditional theatrical and musical repertoire and the ‘for-profit organisations’ producing mass entertainment. One significant difference, however, is that a very important non-profit audiovisual segment, i.e. public broadcasting, is state-funded in most European countries whereas in the US, it has to rely on private subscriptions and commercial sponsorship. Outside the audiovisual sector, there are of course organisations engaged in high culture and traditional productions, such as orchestras and theatres, which aim for commercial success but also need financial sponsorship.

For the purposes of this article, the scenario outlined is taken from a study conducted by the American non-profit research organisation RAND (derived from research and development). The study, The performing arts in a new era (pdf 419kb, 1999), was commissioned by the Pew Charitable Trusts in 1999 and aimed to provide policymakers, people funding arts and the performing arts community with concrete knowledge about the status of the performing arts in the light of the twenty-first century. The scenarios presented in the RAND study differ from the scenarios outlined in some of the other sectors examined in the Sector Futures series (e.g. in biomedical healthcare and chemicals). Instead of describing alternative futures under different assumptions, the RAND study sketches what the authors argue to be the most likely future for the sector as a whole. At the same time, the study also outlines future prospects for each of the main types of organisation that it argues will become fundamental to the performing arts in the future. The study claims that the distinction, made for much of the second half of the twentieth century, between a non-profit segment producing high art and a for-profit segment producing mass entertainment will be superseded by two overlapping distinctions: between big versus small arts organisations, and between companies that target broad markets versus those that target niche markets. If current trends in the US continue, the study envisages that performing arts will be divided into six distinct segments:

  • a large commercial segment - characterised by fewer, but larger firms catering for popular mass markets, often on a global scale;
  • a small commercial segment - characterised by small firms that target niche markets within the established branches of the performing arts;
  • a small number of large non-profit performing arts organisations - providing high-quality live performing arts in major metropolitan centres;
  • a large number of small non-profit performing arts organisations - catering for local and specialised markets, particularly ethno-cultural markets;
  • an even larger and growing number of amateur performing arts organisations;
  • a sizeable number of non-profit presenting organisations - hosting live performing arts to residents outside major metropolitan areas.

The large commercial segment is expected to be motivated by the high rewards of potential success, yet faces substantial costs in the event of failure. Organisations in this segment will seek to minimise risk by choosing conservative programming, which relies on established performing artists and formats and designs that appeal to the broadest possible audience. The sector will continue to be the principal purveyor of popular entertainment for the mass market, which will keep on growing in response to population and income growth. The US is likely to continue dominating this market and only the largest of European companies, such as Vivendi Universal of France and Bertelsmann of Germany, are in a position to be big players and original producers in this market.

The small commercial segment will cater for areas that the large commercial firms have abandoned because they simply do not provide the margins and volume that larger for-profit companies require. An important example of activity in this segment is the recording of classical music, which has for some time been displaced by the recording of popular music. The low costs of entry into this segment are expected to combine with the capabilities of the Internet and e-commerce to ease the traditional constraints of geographically-based markets, thus enabling companies to serve a wider variety of smaller and more specialised markets. The ever-growing resources of communication technology will provide companies capable of identifying new markets a means of serving spatially-dispersed, specialised markets. In Europe, the Internet and e-commerce will open opportunities for local radio stations or music distributors, to cater for people studying or working abroad and to attract a following from a larger audience.

Large non-profit performing arts organisations, like their large for-profit counterparts, are expected to aim at maximising their revenue from ticket sales and related business income. They will rely on advertising and marketing campaigns to promote celebrity performers and traditional materials. The aim is to attract the broadest share of what appears to be a relatively stable market, i.e. those individuals who are prepared to pay premium prices to attend the highest quality live performances.

Small non-profit performing arts organisations are expected to develop into a major source of live professional performing arts, even if they do not feature well-known performers and grand productions, typical of the non-profit sector. Low costs and access to contributed income and volunteer staff enable these organisations to survive. Actual earnings are likely to represent only a small fraction of these organisations’ revenue.

The number of amateur performing arts organisations is expected to grow. These organisations not only give performances, but also respond to demand in a growing segment of the performing arts market, i.e. the demand for hands-on participation from amateurs. Such organisations are primarily grass-roots organisations, which have close ties with their local communities and are heavily reliant on local volunteers, not only for income but for performing and administrative labour. They may also receive support from the local government. As is true of small non-profit organisations, they have little in common with the larger non-profit organisations, in terms of programming, audience demographics, or the professional status of their artists. Earnings are not an important source of revenue for these organisations.

Non-profit presenting organisations are likely to play an increasingly important role in the high-quality performing arts if, as it has been predicted, the top-ranking live arts become concentrated in major metropolitan areas. University-based presenting organisations are likely to be especially important for the future of the performing arts because they serve multiple functions within the performing arts world. Not only are they major presenters, they also play a significant role in training new artists and fostering innovation in the creation of new work.

Evaluation of the scenarios

The middle tier of non-profit arts organisations faces the biggest challenges, in particular opera companies, symphony orchestras, ballet companies and theatre groups serving small and medium-sized cities across Europe. The realities of ageing audiences, escalating costs, and static or even declining funding will force these organisations to rethink their primary mission, the audiences they want to reach, and their organisational structure. Some will choose to pursue increased local funding to keep up professional standards and aspire to become regional or national brand-name institutions. Others may opt to fill specialised niches based on particular programmes. More will decide to focus on their immediate community, using local talent to keep costs down while targeting programming aimed at encouraging participation by local audiences. Finally, some will simply close down, unable to reconcile conflicts among their various stakeholders. These organisations do, however, have the advantage that they are often viewed by their communities as important civic assets. Thus, they may be able to generate sufficient public and private funding to sustain their operations.

A number of issues will shape the future of the commercial sectors; more than anything, their future will depend on how the critical intellectual property rights issues surrounding the Internet and e-commerce are resolved.

Predictions about future demand, which are based on the abovementioned rationale regarding the segmentation of performing arts organisations, assume that current prominent trends will continue. Given the history of the performing arts, this assumption appears to be reasonable. However, policy intervention could increase future demand for the arts and thus affect the balance between the different segments. In this context, much will depend on how policymakers try to exploit the role that the audiovisual sector and cultural employment could play in employment generation and in developing a community of European values.

Implications

Of the two broad groups into which the performing arts industry is subdivided, the live performing arts face the least promising prospects. In most countries, state funding for arts and culture is not only subject to tightening budgets but is also being directed more towards the audiovisual sector. Prestigious theatres and orchestras will continue to be subsidised, but funds will diminish. At the same time, the audiovisual sector, in the form of public service broadcasters, will only be able to devote a small share of its budget to commissioning works from the live performing arts.

These trends are reinforcing certain longstanding features of employment in the performing arts: part-time, temporary, and short contracts. It thus increases the need for performing artists to have more than one job. Recording these trends in 2001, the International Intelligence on Culture study drew attention to the potential of what it referred to as ‘the third sector’. This term refers to opportunities open to the performing arts in contexts outside their traditional settings, e.g. in business training, schools, therapy. The need to look at such areas more closely is greater now than it was in 2001.

Technological advances, particularly digitalisation, affect the audiovisual segment directly. This has led to new resources for promoting, advertising and marketing artistic productions; making good use of these resources, however, requires the kinds of skill and acumen that performing artists do not necessarily possess. Digitalisation also vastly increases the channels through which artistic productions can reach audiences. At present, the dissemination of productions through these channels remains expensive. An impending change, however - and one analogous to the downloading of music from the Internet - is the availability of television and films through the Internet from any source, as a result of enhanced broadband.

As public service broadcasters become more commercially oriented and, except in a few countries, receive an increasing proportion of their revenue from advertising, the power of the major media and entertainment groups will grow. The commissioning of original works will become a rare occurrence and it will be more common for ready-made programmes to be bought in. In this context, the most reliable source of employment for performing artists will lie in the production of such ready-made programmes.

References

European Commission, ‘Cultural employment in Europe’, Press release on Eurostat survey, Brussels, 26 May 2004, 2004a, available at: http://europa.eu.int/rapid/pressReleasesAction.do?reference=STAT/04/68&format=HTML&aged=0&language=EN&guiLanguage=en.

Eurostat, Cultural employment in Europe, Luxembourg, 26 May 2004.

International Intelligence on Culture, Innovative developments and good practice that is promoting and safeguarding employment in the live performing arts sector in seven EU countries, London, 2001, available at: http://www.fim-musicians.com/eng/pdf/6_2.pdf (pdf 823kb).

Kelly, M., Mazzoleni, G., McQuail, D. (eds.), The media in Europe, The Euromedia Handbook, Sage, London, 2004.

McCarthy, K.F., Brooks, A., Lowell, J., Zakaras, L., The performing arts in a new era, RAND, 1999, available at: http://www.pewtrusts.com/pdf/cul_rand.pdf (pdf 419kb).

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