The Covid crisis has taught us how much we can do without. Those things that once seemed necessary now seem to be luxuries.
In this environment, it’s easy to view the arts as one such luxury. But, for gateway cities like Los Angeles, New York, Chicago, Miami and elsewhere, arts and culture are absolutely essential. And clearly they are threatened as cities, towns and all sorts of localities remain in a state of partial hunker-down against the contagion, with cultural institutions still largely shuttered as their patrons stay physically distanced.
What comes next? How can these institutions grow, flourish, even survive in this new completely foreign environment? What might their future hold?
As the former head of New York’s Economic Development Corporation under Mayor Michael Bloomberg and the CEO of one of the city’s leading cultural institutions, the 92nd Street Y, I’ve seen the importance of culture to cities like New York from multiple perspectives.
Obviously, there’s an intrinsic value to cultural institutions — our lives are richer when we have access to works that challenge and transport us. They also literally support our cities: The creative sector accounts for 13% of the city’s total economic output. Pre-pandemic, one out of every eight dollars of economic activity in the city – $110 billion in 2017 – could be traced directly or indirectly to the sector.
But perhaps most importantly, cultural institutions serve as magnetic infrastructure – enabling cities to attract and retain their most important resource, their workforce.
Magnetic infrastructure like the arts ensures that the difficult parts of living in cities are outweighed by the benefits. They provide the sublime moments that make the daily grind worthwhile. Put simply, magnetic infrastructure attracts our workforce, our workforce attracts businesses, and around again. The flywheel keeps turning.
But what happens when cities lose their magnetic infrastructure? The cycle can reverse. Today, that’s a real risk. Take the 92Y as an example.
Before Covid-19, 70% of our revenue came from in-person programming. Along with every other cultural institution forced to close its doors, over the past few months that programming has disappeared, risking almost all our revenue.
This problem will likely linger. In New York, Gov. Andrew Cuomo declared that cultural institutions will be among the last to reopen.
The result could be cataclysmic: We could soon see the cultural fabric of our gateway cities shredded as scores of institutions, unable to stay afloat without revenue, shut permanently. This would be devastating, not just for these institutions, but for cities, too.
What’s to be done?
To start, we must resist two natural but self-destructive instincts in response to the crisis — imposing austerity budgets that make it impossible to create new content, and giving what content we do create away for free. The former is understandable and the latter is noble — but neither is a recipe for long-term survival.
We’ve seen this movie before. Not long ago, we watched newspapers fold as they resisted paywalls, responding to falling revenues instead by reducing staff and cutting content. The result was lethal for the industry and the communities they served.
If we in the arts — in cities and towns across the country — do not internalize this lesson, we and our communities face a similar fate.
At 92Y, we seek a different path. We think it can be instructive for other institutions in other cities.
Like the rest of our sector, we’ve had to make painful decisions to keep ourselves solvent. But that has not impeded innovation. Quite the opposite.
The good news is that we’ve found our patron base to be willing to come along for the ride as we try new things. Since the Covid-19 crisis hit, we’ve recreated ourselves as an entirely virtual institution. Every morning, our online offerings are blasted to our patrons in an email that’s been opened almost 2 million times. We’ve provided patrons with a variety of original online content, including classical concerts, studio and performing art classes, and talks and master classes with luminaries such as Sofia Coppola, Hugh Jackman and David Petraeus.
In under two months, we’ve sold thousands of tickets to online programming, with over 55% purchased by new patrons and those outside New York. We’ve live-streamed 64 original free programs and received over 3 million views. Our archives have been viewed over 11.5 million times.
To put this into perspective, before the crisis, all of our programming combined attracted 300,000 patrons to our building per year.
Through small donations, advertising and admissions, we’re generating hundreds of thousands of dollars per month. It’s a tiny fraction of what we brought in previously and need to survive, but it’s giving us confidence that, even now, people value what we create, and understand that without revenue we will disappear.
This experiment also has convinced us that the work we’re doing online should be permanently incorporated into our business, helping us address challenges that the industry faced long before Covid-19, including shrinking audiences that do not reflect the diversity of our community.
By going online and charging for content, we can flip the standard live performance model on its head: Rather than depending on covering rising costs by raising prices on a fixed number of seats, we can subsidize the in-person experience by selling nearly limitless, inexpensive online tickets.
The result is twofold: For just a few dollars, practically anyone, sitting anywhere, can tune in to cultural events online — while our in-person programming is cross-subsidized, allowing a more diverse audience to enjoy the transcendence of that experience.
This strategy can be even more impactful for rural and suburban institutions.
After all, while endlessly raising ticket prices have shrunk the audience able to afford art and culture everywhere, at least in New York there are still enough local, prosperous patrons to support our institutions. In many smaller communities, there simply are not.
By taking content online, institutions in smaller communities can break free of the limits placed on them by geography, tapping into national or even international audiences. In this way, going virtual can level the competitive playing field in a way that we all should applaud.
All of these strategies, as well as other revenue-producing business models, will require cultural organizations to accept change. In the current environment, that acceptance needs to come quickly.
The reason is clear. While all institutions face their own challenges during this crisis, we all share a single economic reality: No revenue means no future.
It is time to acknowledge this reality and chart a new course into the future. If we do, we will not only put our institutions on a new and better trajectory, but we will benefit our communities in ways that will be critical to their recovery.