jwilzewske: critical mass

Showing posts with label critical mass. Show all posts

Tuesday, April 22, 2008

New Music ‘Expectations’ vs. ‘Expectancy’: George Perle

H is [Perle’s] pieces also raise what has become a confusing question: What do classical composers writing music like this expect from listeners?”
— Bernard Holland, NYT, 20-MAY-2008.

W hat do composers writing music like this expect from listeners? They expect nothing, except honesty and an open mind. They don’t expect charity or an unearned free ride. They expect no more ‘smarts’ than the curiosity one finds in cats watching ambient television in their owner’s house, for free. We self-select, those of us who are transfixed like cats, enthralled by Perle’s music. There is a contrary self-selection, too, by those who aren’t even mildly curious about what it is or how it works or what it might mean or what comes next. Honestly confessing to ‘not liking’ something is fine. And calling it a different language, as Holland does, is also fine. But choosing not to attend to a language, and impugning the comprehensibility of the language and those who speak and write it, and justifying one’s position by asserting the inevitable, righteous marginality/disenfranchisement of the shunned language—as Holland does—are indefensible, xenophobic choices. If we follow Holland’s lead, I guess we need not bother to learn Tlingit, or Monguor, or Southern Tiwa—because there are only a few hundred speakers of those, the languages are dying anyway, and the songs and the ideas they are about seem nasty or irrelevant to classical Euro-centric white metro consumption-crazed culture.”
— DSM.

I t is true that in the natural course of things, languages, like everything else, sometimes die. People choose, for a variety of valid social reasons, not to teach their children their own mother tongue. In the case of American Indian languages, however, the language drop-off has been artificially induced and precipitous, and just as with the human-caused endangered species crisis, it is worth doing something about it. Amerindian languages were deliberately destroyed, particularly in North America. In the earlier days of European contact, Indians were separated from their linguistic kin and resettled hundreds of miles away with individuals from other tribes who couldn’t understand each other. Historically, this is the single most effective way to eliminate minority languages (for obvious imperialistic reasons).”
— Laura Redish, NativeLanguages.org.

Bernard Holland, one of the New York Times’s music critics, repeatedly bashes new music and composers of new music every few months or so. His piece on George Perle in Sunday’s NYT is another installment. Holland’s rants generally exhort composers to create audience-friendly works, works of ready-made ‘relevance’ for unprepared general audiences—as if doing so will somehow solve classical music’s sales and marketing problems in this era of mass-media consumerism. Holland, the staunch advocate for a Tyranny of Mass-Market Relevance.

I will continue to read Bernard, even though these anti-new music attitudes of his annoy me—and annoy Greg Sandow, Frank Oteri, David McMullin, and almost anyone who is composing or performing or attending or buying and experiencing new music.

But I think of these experiences differently from Holland. I think of them as explorations. An opportunity to hear, or perform, or write new music is a form of exploration, or art tourism, or musical anthropological adventure, into virtual cultures that are infrequently visited by ‘civilized’ consumeristic/capitalistic people. The ‘aboriginal’ musicians are spontaneously doing and creating what they do—not as though they have never encountered white men [of Bernard Holland’s imperial ilk] before, but as though they need to do it for their own real, honest, indigenous reasons.

In fact, they (we) are quite interested in trade with people from other ‘lands’. We welcome the visitors. But commercial trade with them is not what makes us most of us tick. And we are not about to allow ourselves to be subjugated by them. We don’t intend to end up making derivative ‘musical trinkets’ or commodities catering to the needs and mass-market aspirations of imperialists.

I write music that I intend to be beautiful, and I hope that it will please listeners. My strange idea of beauty may not resonate as widely as Bach’s or Britney Spears’, but it’s what I have to offer, and it doesn’t mean I hate my audience. All I ask of listeners is an open mind.”
— David McMullin, American Composers’ Forum.

And, in general, we who do new music are not ‘defying’ anything, any more or less than any genuine indigenous culture is ‘defying’ a dominant-culture with which it comes into contact. We refuse to be tyrannized by the dominant out-culture’s traditions or expectations. Nor are we self-tyrannized by an obsession to always be ‘new’, in a way that deliberately, perversely races ahead of any audience’s ability to comprehend or enjoy, in the manner that Holland implies. We know that radical novelty in and of itself is no guarantee of meaningfulness or value.

Bernard Holland is right about one thing: we do create new languages—ones that he simply prefers not to learn and sees no possibility of enjoying and damns by faint praise.

I can speak only the languages I was born to. Sometimes I feel guilty. Maybe I should work harder at [Perle’s] grammar and vocabulary. With age I feel guilty less and less [about my indolent attitude toward new music].”
— Bernard Holland, New York Times, 20-APR-2008.

We invent things. It’s what we do; it’s what we have to offer. And, to be worthy of the Patent Office’s term ‘invention’, by definition the things must be novel, non-obvious, and valuable—valuable to future societies, if not to the ones that exist right now. To be worthy of the term ‘invention’, by definition not everyone will have thought of it or immediately think it’s ‘fun’.

A ‘language’ is a dialect with an army and a navy. [And anything lacking military force is merely a ‘dialect’ to be dismissed, not reckoned with.]”
— Max Weinreich, 1945.

Language extinctions:

497 languages are projected to become extinct within 15 years;
~3,000 will be lost within a generation [David W. Lightfoot, NSF data].

North America:

700 languages in 1492 C.E.;
Now only 162 have living speakers;
75 are now spoken only by a handful of elderly;
Only 12 languages are spoken by more than 10,000 people;
100 languages spoken in the Arctic but dramatic changes over the last 40 years [e.g., Tlingit, Tsimshian, Haida].

George Perle himself gave the best answer, to Bernard Holland’s question as to what composers expect:

Y ou should approach a new piece the same way in which you would any other new experience—with a sense of curiosity, and with the hope that it will be a challenging, interesting, and exciting experience ... When I first came to San Francisco to take up my post as composer-in-residence, I was introduced to the symphony’s board of governors. One of them asked me, ‘Is your music fun to listen to?’ When you see a new piece on the program, you have a right to hope that it will be fun to listen to. There is a very good chance that you will be disappointed. There must be ten times as many young composers around today as there were when I was a young composer. The only aim that I can discern in the music of some of them is not to offend anyone by offering him music that he might not find entirely obvious at a first hearing, so they give you second-hand versions of Debussy, or Mahler, or early Stravinsky, or even Vivaldi. Second-hand versions of anything are a bore, which is itself an offense, to my way of thinking, but the new piece is rarely allowed to last more than ten minutes, and so you put up with it, and both you and the management of the orchestra feel that they have done their part in furthering the cause of contemporary music. I ask you to expect much more from new music, and to be prepared to recognize the difference when the real thing comes along. And I think you will recognize the difference ... The older music that is an important part of your lives represents only a selected and very limited portion of the music of any particular period. It is music that has stood the test of time, which only means that it is music your predecessors have culled out of the music of the past. You should be intrigued and challenged by the notion that you, too, will be playing a similar role in the unfolding of music history. It seems to me that nothing can be more important for the future of that history than the relation that you establish to the music of your contemporaries.”
— George Perle, Commencement address, San Francisco Conservatory of Music, May, 1991.

Composers hope for open minds, for expectancy. We hope to be accorded the dignity and respect that anthropologists should give to any culture. Each of us is, after all, our own far-away ‘land’, lacking an army or navy.

Sunday, March 30, 2008

Few Chamber Orchestras Are Too Big to Fail: Market Size, Scale and Sustainability

The culture of electronic media and the internet and the culture of social interaction continue to erode classical music and chamber music concert attendance. In the U.S., possibly some of this erosion is augmented by the economic downturn, but the trend has been relentlessly underway for many years now. Lifestyle and arts consumption choices of shifting generations continue to thwart traditional concert attendance, despite the fact that there are today more high-quality concert events and more diverse programming than ever before.

How long can this go on? Which organizations are likely to survive? How much does size (assets; revenue; financial strength) insure sustainability? Are there norms that are embodied by the strongest and best of the current contenders in this nonprofit chamber music marketplace, that other organizations in the field ought to aim for? Do the treasury management decisions of such leading organizations constitute norms that others should emulate? As weaker organizations begin to fail, will we see some of them get aggregated by joint-ventures or M&A into other larger ‘survivor’ organizations in the same geographic vicinity? And, if so, what are the financial ratios that potential acquirers should look for in due-diligence?

These are questions that are not readily answerable. But it does seem that tough, Darwinian survival-of-the-fittest times are ahead.

Just as you would do if you were evaluating companies and stocks, it’s helpful to consider the competitive landscape for chamber music ensembles by applying some financial-ratio analysis, to characterize the field quantitatively and monitor the players and the outcomes.

Form 990 data for 501(c)(3) U.S. chamber orchestras

The log-log plot of the revenue vs. assets-to-revenue ratio shown above is for 35 nonprofit standing chamber orchestra organizations in the U.S. for the most recent year for which data are available, 2006. It provides at-a-glance comparison of top-line revenue and capital-output efficiency. I extracted the data from the federal IRS Form 990 tax documents that are publicly available via Guidestar and other sources. It’s easy to do—took me less than one hour. You may like to do this for your own organization, or for organizations that you make contributions to, to see how they are doing amongst their peers.

The upper-right quadrant contains ensembles that are both highly productive (in terms of revenue generation and free cashflow) and well-endowed. The upper-left quadrant contains ensembles that are very active but are relatively under-capitalized. The lower-right quadrant contains ensembles that are relatively well-endowed but are perhaps under-utilizing their available assets. And the lower-left quadrant contains organizations that are financially at-risk. Although this plot is strictly for standing chamber orchestras, the same sort of statistical distribution and scatter-plot could be done for 501(c)(3) chamber music presenter organizations and other groups. Robert Higgins’s and Richard Bull’s and Murray Dropkin’s books (links below) are particularly good, with regard to understanding and acting upon financial-ratio analysis for nonprofit organizations.

eMarketer projected social networking annual ad spend

Possibly the most promising strategy for selling to the evolving chamber music market—of all ages—is social networking and Web 2.0 apps. Besides those environments, there are email affinity-marketing services, such as Emma.com, which are significantly more effective and flexible than services that were available several years ago.

When being chased by a bear, your survival first requires that you are not the slowest runner in the woods and that you are running in the best direction for getting away. I seriously doubt that the Federal Reserve will come to the rescue of any chamber music organizations ...

In this regard, the concept of sustainable growth was originally developed by Robert Higgins, Professor of Finance at the School of Business Administration, University of Washington. The sustainable growth rate (SGR) of any enterprise is the maximum rate of growth in sales that can be achieved, given the enterprise’s profitability, asset utilization, and debt (financial leverage) ratios. The variables in the SGR equation are the following:

the net profit margin on new and existing revenues (P);
the asset turnover ratio, which is the ratio of sales revenues to total assets (A);
the retention rate, which is defined as the fraction of earnings retained in the business (R);
the assets to beginning-of-period equity ratio (T).

To compute an orchestra’s SGR, multiply the four variables together, or, in other words, the SGR = P x A x R x T. Alternatively, the SGR equals the retention ratio, times the return on beginning-of-period equity.

The SGR increases when the operating margin increases, the assets to beginning-of-period equity increases, the asset turnover increases, or the retention rate increases. The sustainable growth model assumes that the firm wants to: (a) maintain a target capital structure without issuing new equity; and (b) increase sales as rapidly as market conditions allow.

Since the orchestras we are discussing are not-for-profits, the profit-margin term is a bit tricky. But the net income in the operating fund is a suitable proxy for what profit-margin would be in a for-profit enterprise, so the SGR equation can in fact be used for nonprofits.

The concept of sustainable growth can be helpful for planning healthy nonprofit growth. This concept forces managers to consider the financial consequences of sales increases and to set sales growth goals that are consistent with the operating and financial policies of the enterprise. Often, a conflict can arise if growth objectives are not consistent with the value of the organization's sustainable growth. If an orchestra’s sales expand at a rate that exceeds the sustainable rate, one or some combination of the four ratios must change. If an orchestra’s actual revenue growth rate temporarily exceeds the SGR, the required cash can usually be borrowed, against the orchestra’s line-of-credit. When actual growth exceeds the SGR for longer periods, management must formulate a financial strategy from among the following options: (1) permanently increase financial leverage (the issuance of debt); or (2) decrease the total assets to sales ratio. In practice, orchestras may be reluctant to undertake these steps. Orchestras are reluctant to issue debt because of high issue costs, and the unreliable nature of debt funding on terms favorable to the issuer. An orchestra can increase financial leverage only if it has unused debt capacity with assets that can be pledged and its debt-to-fund equity ratio is reasonable in relation to other nonprofits. Orchestras can attempt to liquidate marginal programs or intellectual property (such as trademarked broadcast programs or record labels, or branded educational/outreach content), increase ticket prices, or enhance production efficiencies to improve the financial ratios.

In summary, it is possible for an orchestra to grow too aggressively and rapidly, resulting in reduced liquidity and the need to deplete assets. Shrinking attendance and ticket sales is a worse problem, but it is not the only problem that can happen.