Arts Research Letters – March 2020
The Cost of Practice
Outside of box office revenue, performing arts organisations rely on government and private subsidies to maintain their production costs, artist salaries and administrative operations. These expenses vary substantially across different practices, depending on the complexity of productions and the operations involved in artistic presentations.
In this sense, the study of “real” audience cost, the full expense a company incurs for each audience member, provides significant insights into artform variations and helps in informing where additional funding can leverage larger proportions of audiences.
Looking at the 2018 data for Australia’s Major Performing Arts, audience and company expenditure present a natural positive relationship with a marginal cost of $149 to raise an additional audience member. Out of twenty-seven companies, the seven largest account for 60% of all audience and expenditure across the group, a potential indication of driving market forces in both costs and artistic activity within the cohort.
Expenditure contains total audited costs for all presented programs. Audience figures include all activity from performances, workshop and education events, both national and international.
Audience costs relate to the large diversity of spending structures across performing arts, ranging from less than $50 (Musica Viva, Chamber) to more than $275 (State Opera of South Australia).
Across artforms, costs per audience are higher for opera, with all four companies situated at the higher end of the cost scale (upwards of $175). Sizable costs are also recorded by three sympony orchestras (upwards of $200) and the two ballet companies (upwards of $150).
For opera and ballet, the higher audience costs can be inherently drawn from the scale of productions which involve large set installations and large groups of artists including singers, dancers and orchestral ensembles.
Symphony orchestras present a large variance of costs per audience: the largest three orchestras record costs between $200 and $275 per audience while the other three record costs between $100 and $150. As symphony orchestras do not engage in touring activity, these variances are indicative of geographical determinants in audience preferences for the symphony practice.
Theatre and contemporary dance record relatively lower costs, with a majority of companies spending below $150 per audience. While production costs are generally lower for these practices, higher audience can also originate from more a pronounced national interest towards theatre and contemporary dance than other artforms.
Companies with large education programs (Musica Viva, Bell Shakespeare, Sydney Dance) present relatively lower costs as they are able to leverage additional attendances from classes and workshops.
To get a more robust understanding of cost differences between artforms, we compare every organisation with all the other companies outside its area of practice, calculating the difference in audience cost for each pair with a total of 562 observations.
We attribute statistical significance to our assumption that opera and symphony companies spend relatively more than other artforms to attract audiences ($98 more on median for opera and $38 for symphonies). On the other end, theatre and dance organisations record lower median costs ($68 less on median for theatre and $37 for dance companies). Differences are not significant for the chamber orchestra companies who present a distribution centered on a zero mean.
The existence of large, significant deviations in the cost of audience between artforms poses important questions on their nature. Performing arts practices are restricted by the number of events presented within a certain venue, with costs of productions from large sets having a natural impact on ticket price and attendance.
Determinants of audience costs are also driven by factors outside practice, such as the importance of touring programs and associated travel costs, geographical residence dictating funding allocations and the general appeal of specific programs to the larger public.
Our future study will complement the analysis with detailed breakdowns of specific expenditures to dissociate individual cost impacts on audience. Geographical determinants will also provide wider perspectives on how expenses vary across different states and where opportunities for spending efficiencies exist.
Note: We test statistical significance based on a null hypothesis of zero mean which is rejected at a 5% signficance value in a two tailed t-test for the opera, symphony, dance and theatre artforms. The zero mean hypothesis is accepted for the chamber practice.
Conclusions
The cost of audience provides significant insights on the leverage mechanism between the expenditure of a performing arts company and the audience it reaches. In the context of government subsidies focused on increasing national audience reach, incorporating audience leverage mechanisms in funding decisions presents a significant opportunity to promote access to a wide diversity of practices across the national artistic landscape. Particularly for the small to medium sector, additional funding for theatre and dance companies presents a significant potential to raise larger groups of audience than equivalent investments in opera and symphony orchestras. Promoting large education programs also encourages a extensive reach in national attendances, attainable at lower relative costs and reaching a wider diversity of audiences.
The data in this article was collected from individual Major Performing Art company 2018 annual financial statements and reports of activities.
For more information on Australian Major Performing Arts audiences, refer to:
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