The Boston Symphony Orchestra is making headlines these days. The Boston Globe recently reported that, since arriving in October 2004, music director James Levine has been “creating a new model for orchestral programming.” But having Levine at the artistic helm comes at a price.
As a result of Levine’s programming choices, the symphony has lost some of its traditional subscribers, and operating costs have increased by more than a million dollars a year. How is the business side of the country’s most financially solid orchestra charting this new course? CFO.com assistant editor Lisa Yoon spoke recently with chief financial officer Thomas May.
How much more expensive is running the orchestra now than it was pre-James Levine?
We knew from the outset that Levine’s artistic vision for the Boston Symphony [and] to consistently achieve a peak level of orchestral performance would involve an increased commitment to things like additional rehearsal time, expanded use of the world’s greatest vocal artists for several large-scale works, and increased production expenses associated with presenting these major works at [Boston's] Symphony Hall, Tanglewood, and [at] Carnegie Hall. The additional incremental operating costs related to this new “artistic initiative,” as we call it, are estimated to be $1.5 million per year.
Since you knew things would be more expensive under Levine, how did the BSO prepare for it financially?
The BSO’s board of trustees recognized early on that the artistic vision articulated by Levine would require a new infusion of capital. As a result, the board is in the process of raising the additional endowment and directed grants for operations needed to fund the incremental costs of the new artistic initiatives.
[And] while inevitably there are patrons who would prefer that the BSO limit itself to the more traditional repertoire, James Levine’s programming choices have clearly been exciting to many of our subscribers, as well as a new audience of listeners who’ve begun buying single tickets, and who we hope will be future subscribers.
The BSO makes up for lost subscriptions by marketing to single-ticket buyers. Is it harder for a non-profit to respond in a nimble way to changing business environments?
It probably goes without saying that it is much less costly to renew an existing subscriber than it is to find a new subscriber or single-ticket buyer. So the BSO makes up for lost subscriptions by marketing not just to single-ticket buyers but also to potential new subscribers. Each year, we sell about three to four thousand new subscriptions to help offset the natural loss of subscribers due to age, health, and other changes in circumstances.
We are now operating in an economic and cultural environment that demands that we challenge our existing assumptions and find new ways to remain relevant. While our product offerings may not be as adaptable to rapid change as, say, cell-phone designs, we regularly conduct market research and employ new marketing approaches in an effort to be responsive to audience concerns and to continually improve our customer service.