In the financial crash of ten years ago, the S&P 500 lost almost 60 percent of its value. Millions of people lost their houses and jobs. Entire industries – banking, cars, airlines, housing — were on the verge of collapse. And yet, if you had wealth, you probably did fine. More than fine actually. For some the crash was a huge opportunity.
The auto and banking industries got bailouts, and within a few years were thriving. Numerous industries figured out how to restructure and emerge stronger. If you had invested in the S&P at the bottom of the market in March 2009, you would have six times your investment as of last Friday. If you’d bought stock in Amazon.com at $73.44 that March, you’d have seen your investment increase 40-fold to more than $3000 a share.
Crises have a way of making those who have the means to invest fabulously richer, even while they crush those who are marginal or who live on the edge. The gap between rich and poor has never been as wide as it is now. Bernie Sanders said this week that 467 American billionaires have so far made $731 billion more between March 8 and August 5, “a period in which 5.4 million Americans recently lost their health insurance and 50 million applied for unemployment insurance.”
But it isn’t just about more money. Healthy industries and companies recognize crises as opportunities. They rethink how they operate and use it to fix longstanding problems, reinvent, shed things which haven’t been working, identify new opportunities and pursue them. They can do this not just because they have wealth, but because the larger infrastructures in which they work are set up to support and reward their investment.
Many corners of the arts have still not recovered from the financial crisis ten years ago. While banking and other industries used that downturn to advantage, the arts were forced to downsize and struggle along with millions of displaced homeowners and unemployed workers. Survival came at a cost; infrastructure was damaged for the long term and even after a decade many arts organizations and artists are in even worse position to survive a crisis than they were then.
The COVID shutdown is a massively bigger crisis than the last one, one that will continue for at least the next year and threaten the survival of much of the sector. Assistance so far has focused on survival, on propping up, but the needs so outstrip resources that an already impoverished arts infrastructure is being further damaged for the long run. Even when operations become viable again, it is likely to be under further reduced circumstances. And the amount of artistic talent that has been laid off and likely won’t return is enormous.
Many in the arts continue to be Restorationists, hoping to ride out the crisis until “things get back to normal.” Even the Opportunists who recognize the need to reinvent or who sense the possibilities of new opportunity seem to be stuck for specifics or plans for achieving them.
The crisis has exposed gaping weaknesses in our infrastructure. But in contemplating recovery, does it make sense to just hang on and try to rebuild inevitably lesser versions of systems that already were failing?
I think not.
And yet, while artists and arts organizations scramble to survive, there are heroic efforts by funders to help, and attempts to plead with lawmakers for bailouts or for some sort of a new WPA-style public artworks program. I wonder though if we’re missing an opportunity to address longstanding problems which have hobbled the arts in good times and proven debilitating in bad. The shutdown has suspended usual rules, positions and behaviors, suggesting there may be opportunities to not just rethink but take action.
So I want to suggest five places to start, and I’ll follow up with more specific ideas on each in subsequent posts.
- Business models
- Business Models
There is no one business model for the arts, but most of the models have been broken for years. The non-profit model was designed to generate working capital but has increasingly fallen behind in doing so. The for-profit model has been under stress as the internet helped separate the ability to access art from the need to pay for it. Artists themselves have been squeezed worst of all – our funding mechanisms are primarily designed for institutions and corporate industries at a time when traditional institutions and industries are falling behind in the digital economy.
Though many artists move easily back and forth between models, the non-profit and for-profit institutional worlds largely eye one another with suspicion as if they were of different species. The movie, TV and commercial music and design business models have reinvented numerous times, but the digital revolution has hollowed out the meat of many commercial industries.
The non-profit model has lurched from crisis to crisis. There is little risk capital or R&D. The dwindling lists of funders and donors have way too much control over what gets made and how. Non-profit arts are too commodity-based, and many arts institutions have become lumbering, self-absorbed, self-interested and uncreative. Not because they’re run by bad people, but out of the necessity of survival. Efforts required to keep the lights on, funders happy, and box office humming (and with no room for failure), make it little surprise that core missions take a back seat to survival and sustainability, which are the measures of success.
What to do? We need a significant new politically-insulated stable source of cultural funding. We need to disaggregate and networkize the arts sector (rather than consolidate, as some are calling for). We need to break down barriers between non- and for-profit models. And we need to invest in and develop virtual platforms and technology that both enhance arts experiences and make them accessible to broader audiences.
The arts have always been driven by technology. Technology drove musical instrument design, how theatres were conceived and how books were published. Our audiences are the product of technology – our relationships to screens, the intimacy (or lack of it) in theatres, the ability to make, discover, access, consume and share art.
And yet, because there is so little R&D for technology in the arts, our technology infrastructure is weak. Sure – we can kinda sorta make virtual platforms and services work okay. It’s functional (if we’re lucky). But the current state of technology is way beyond that. Big tech companies understand that making tech platforms alluring makes people want to use them and come back. Big tech companies have invested billions in trying to understand user behavior and create interfaces that aren’t just functional, but addictive. Little of that is reflected in arts tech platforms.
Meanwhile, we still don’t have a decent listings service that can easily sort through what’s on tonight. It wasn’t until last year that music recording databases made classical music searchable in an almost usable way. Our commerce platforms for the arts are clunky and awkward to use, and at a time when technology has captured the popular imagination, innovation in arts lags.
Moreover, increasing use of algorithms to push/influence audience choice is narrowing aesthetic taste and making it more difficult to reach new audiences. And dependence on social media has put arts organizations at the mercy of companies who are not transparent about how posts are spread. There’s no single solution or magic bullet, but in a world increasingly shaped by technology, the arts are falling increasingly behind.
The structures of our cultural institutions were created to serve a different time and different ideals. They are built as temples to hierarchies – artistic, social, financial and political — and merely letting more or different groups of people have seats at the table to participate in the same systems of hierarchies doesn’t make them more equitable. We’ll have to change the structures if we want to increase equity.
One way of framing the digital revolution is as a challenge to institutions. Disruptive digital technologies have upended institutions by being more nimble and building on the power of dynamic networks that can scale quickly up or down. Traditional institutions locked into staffing, buildings and overhead are at a disadvantage in trying to compete. Though some parts of the creative sector such as the movie and commercial music industries have gone through business cycles of consolidation and divestment, the non-profit institutional models are essentially unchanged over the past 60 years.
Artistic and mission objectives are often in conflict with structural survival and top-down institutional models seem out of tune with the times. As the economy has shut down and along with it, performances and exhibitions, there is an opportunity to rethink the structures of our institutions. Hotel chains don’t own their buildings anymore. Should theatres own theirs? Big brands don’t run their own marketing; they outsource. Should orchestras? Some are suggesting that our institutions consolidate to survive. But maybe now is a time of smart, networkized disaggregation instead?
Nothing has exposed leadership issues like responses to the pandemic shutdown. What is the old saying – when the going gets tough the tough get going? Artsjournal has been full of stories these past several months about artists and organizations rising to the challenge and figuring out how to do their work. Many say they have learned things that will change and improve the ways they work forever.
But there are also institutions — including some of the biggest — which simply shut down, laid off their workers and then appealed for donations to help them survive.
If you think of yourself as a product, a venue, a transaction, and everything shuts down, then you do too. If you’re an idea, you understand that now is an even more important time to find ways to lead. There’s nothing wrong with being a product, a venue, a transaction, but the arts have tried to make the case that they are more than that, that artists build community and are deserving of public investment. Now is the time to prove it.
Moreover — to think of the period we’re in now as merely a time to get through until things resume is an abrogation of leadership. Remember what happens during crises to those who can only survive? Right now experimentation is not a frill, it’s an opportunity to learn. Audiences have great tolerance for experimenting right now because nothing is normal. To not use this time to make yourself stronger and better and learn as much as you can is a failure of leadership. As choreographer Mark Morris put it this spring: “the idea that you’re waiting to come back to your life — I’m sorry everybody: This is your life.”
I’ll follow up this week and next with ideas in each of these categories.