Pressure to cut costs, find new revenue sources, rethink what doesn't make money, and increase repeat business are confronting all businesses during this tentative economic recovery. For Kathy Brown, executive director of the New York City Ballet, the issues are particularly acute. "Ballet tickets become an unjustifiable luxury to people without jobs, and donations dry up as traditional philanthropic sources also fall victim to a challenging economy," observes Brown, who assumed the newly minted position in December 2009.
Among the initiatives that the ballet has undertaken: forgoing costly, full-company tours unless they are underwritten; experimenting with a dramatically smaller ensemble touring group; and creating and opening a spring festival, "Architecture of Dance," which featured seven world-premiere ballets and four commissioned orchestral scores, interspersed with existing repertoire. "The festival allowed us to appeal both to NYCB's core audience—which appreciates new works, along with the familiar—and to new and younger audiences, who welcome the diversity of cultural attractions that the festival offers," Brown says, "from new music and dance to architecture and fashion."
Brown recently spoke with Businessweek.com Management Editor Patricia O'Connell about her role at New York City Ballet and her goal of " demystifying ballet to make it more accessible to more people." Edited excerpts of their conversation follow:
What did you see as the opportunity and the challenge in taking over an arts organization at this time?
Everyone—in the nonprofit world as well as the for-profit world—is grappling with the most difficult economic environment that they've ever seen. The other challenge for those of us in the performing arts is there has been a dramatic change in how people consume culture and the choices available to them.
The opportunity is in revisiting budget practices and pricing models, and being entrepreneurial and creative about audience outreach and donor cultivation. This kind of situation forces you to be more creative in your solutions.
Q: How does a traditional arts organization—particularly one that is about live performance—use social media and technology?
A: We have a Facebook page and we have found that Twitter has become a useful tool in helping break down some of the barriers and the mystery. Having our dancers tweet makes them very human and approachable.
And our home at Lincoln Center, the David H. Koch Theater, has just undergone a major renovation that included installation of equipment for recording and distributing in high-definition video and digital sound. Now we can capture content to use in audience development, education programs, and fundraising.
Q: How much do you depend on contributed income vs. operating income?
A: We have an annual operating budget of $6o million. About one-third of that is contributed income. The foundations have been hard hit [in the economic downturn] and most of them calculate their giving based on a three-to-five-year average, so it is going to take a few years, even after the economy turns around, for their contributions to go back up.
Q: When corporations cut staff, the effects are often not obvious externally, though they may be felt acutely internally. "Do more with less" is a common corporate mantra. In an artistic organization, you can't do that. But you have pressures to cut, too. How do you cope?
A: There is that issue of cutting to the point where it goes beyond the ability to recoup, once things get better.
You want to do everything you possibly can to maintain your artistic integrity and your artistic talent. To protect that, we would make much harder decisions on the administrative side.
That's where this idea emerged to take a small group of dancers and musicians on tour, instead of the entire troupe—a chamber ensemble of the NYCB. It's not meant to be a second company or a second-rate experience, or any kind of a different artistic experience. We are using live musicians, not taped music, and the same dancers that you would see in NY, performing shows from our standard repertoire.
Q: What is the cost difference?
A: We have 92 dancers and 62 members of the orchestra, and there are the people who take care of costumes, etc. Tours can be as many as 200 people. For these ensemble shows, we are taking 12 dancers, 5 musicians, and 5 other people. About 10 percent of our normal touring group.
Q: As an arts operation such as yours tries to operate in a more businesslike way, does the role of the board change? Does the kind of people you need on the board change?
A: The ideal board represents an enormous gamut—business people, people who are very active socially, people with particular expertise. If you have a broad range, you are covered.
Q: Do you have sense of how much donations are down, or have they remained steady?
A: Bottom line, they've remained steady. Down in the foundation area, down in the corporate area, but other gifts have made up for that. I am finding that people who really care about nonprofit organizations [and are able] have been stepping up to the plate.
We are very fortunate to have an extremely active, committed board of directors that has been very supportive this year.
Q: Do you think arts organizations should strive for balanced budgets?
A: I think it's a good discipline. I also don't think deficits are the end of the world. Spending money in a very strategic way and investing in things that you think will pay off in the long run is very smart.
Unlike opera companies and symphony orchestras, which plan years in advance, dance ensembles have traditionally operated on a shorter time line, and until recently NYCB did the same. Now we use longer horizons, which gives us better control over our budgets, helping tremendously in planning for our marketing, public relations, and development efforts.
Q: Has the ballet had a tradition of not being on budget?
A: In the last few years, yes, but before that, not so much. The way that people get culture today is affecting subscription ticket sales, which were the bread and butter of performing arts groups for a very long time.
Fortunately, single-ticket purchases are making up for that. But that makes it such a nail biter because you don't know until the performance if everything will be O.K.
We've learned that there are many people who come once and don't come back. The conventional wisdom was that they didn't enjoy it but we've found out through research that that wasn't the case. They had a great time, but they have 50 other things to do. So there is the opportunity to cultivate that audience.
Q: How do you bring them back?
A: Things like offering them a free ticket, making recommendations on what they might like, based on past purchases.
Q: Who do you see as the new audience?
A: There are so many different views about where the potential is. Our typical audience member is a 55-year-old woman. A lot of audience development is catching people at the right moment with the right attraction. If you can get to them in a way that involves their families, that's a great way to do it. The Nutcracker is a great opportunity for that. For example, we did the "if you liked this, you may also like that" with people who attended The Nutcracker. That's an audience that often doesn't come back. Doing that boosted ticket sales 5 percent, which we were very pleased with.
Q: What else do you do to cultivate a new audience?
A: We've done this extensive renovation to the theater. We are now looking at trying to make the front of the house more accessible and attractive. We would love the theater to be open and accessible to people all the time.
The "Architecture of Dance" festival, for instance, gave us unprecedented opportunities to connect with people in interest areas beyond ballet and inspire new donor support. Potential donors have been attracted by the ability to support the architectural collaboration, for example, or a particular fashion designer, composer, choreographer or other artist connected with a specific ballet.
We think that all the strategies we've employed will not only help NYCB manage the recession, but have the potential to bring us out of it with an even stronger brand and a broader, more enthusiastic following.