Thanks to the kindness of the archivists at the New York Philharmonic, I’ve gotten a copy of a report on the state of American orchestras in 1972, written by the big management consulting firm, McKinsey. And actually what I’ve gotten is two documents, one a 1969 McKinsey memo to the presidents of the Big Five orchestras, the other the longer, more formal 1972 report. Both are fascinating, even revelatory.
What’s in them? Try this: the Big Five routinely sold out all their concerts in 1969. This was so much taken for granted that, to calculate the income from ticket sales, McKinsey simply multiplied the capacities of each hall by the number of concerts and the average ticket price. (Which was $4. Adjusted for inflation, that would be around $20 in current money, a good deal lower than the average price of a Big Five ticket today. Orchestral ticket prices, as I’m sure everyone knows, have risen far more than the inflation rate.)
That, to me, is a revelation. Maybe it suggests a declining interest in classical music, in the culture at large, since those bygone days. Though rising ticket prices might play a part, as well. This is something we ought to learn more about. And then there’s the percentage of orchestral revenue that came from earned income, which in turn mostly came from ticket sales. Now it’s somewhere around 25 to 30 percent, for large orchestras. But in 1972 — based on information McKinsey gathered from 28 orchestras –it was 47 percent. Orchestras, in other words, funded their operations very differently back then. They earned more of their money. The immense development apparatus we know today — the constant, intense, organized fundraising from individuals, foundations, government, and corporations – must have been in its infancy.
And this, the report helps show, was a snapshot from a longer history. McKinsey notes that in 1962, the earned income had been 58 percent of revenue. In 1937 (according to a study of American orchestras reported in a 1940 book, America’s Symphony Orchestras and How They Are Supported), earned income was 70 percent of revenue for most orchestras, and fully 90 percent for a few of the largest ones.
So from 1937 to the present, we can see some long-term trends, though they started at different times. Orchestras sell fewer tickets; orchestras raise prices far higher than the inflation rate. (Perhaps because they’re selling fewer tickets?) And ticket sales make up a steadily smaller part of orchestral revenue. This is one aspect of what seems to be a long-term financial crunch — orchestras constantly need to find more money.
Which brings me to the central part of these McKinsey reports, and also to my next post.